United States District Court, D. Maryland
Xinis United States District Judge
before the Court is Defendants NanoClear, NABAS H20, LLC,
Frederick Alderson, and Steve Gareleck's motion to
dismiss for lack of personal jurisdiction. ECF No. 10. The
motion is fully briefed, and no hearing is necessary.
See Loc. R. 105.6. For the following reasons,
Defendants' motion is denied.
breach of contract and misappropriation action concerns
Plaintiff NABAS Group, Inc.'s (“NGI's”)
development of the Nano Air Bubble Aeration System
(“NABAS”). ECF No. 1-1 ¶¶ 14, 18, 25.
NABAS uses “ultrafine nano bubbles and Hydroxyl
Radicals” to clean water without using chemicals or
leaving a significant ecological footprint. Id.
¶ 14. In 2018, NGI President and CEO, Benjamin Lee,
began looking for business partners to invest in and market
NABAS. ECF No. 1-1 ¶¶ 17, 20-23. In August 2018,
Defendants Alderson and Gareleck, members of NanoPure, LLC,
attended a demonstration of NABAS in Fort Myers, Florida. ECF
No. 1-1 ¶ 23; ECF No. 27-1 ¶¶ 2-3. Afterward,
Alderson and Gareleck discussed with Lee the possibility of
forming a joint venture with NGI. ECF No. 27-1 ¶ 4.
weeks later, Alderson was driving to Florida from New York
when bad weather derailed his travel plans. ECF No. 10-2
¶ 7. Alderson contacted Lee who booked a hotel for
Alderson in Gaithersburg, Maryland. Lee met Alderson the next
morning to ride with him to South Carolina. ECF No. 27-1
¶ 5-8; ECF No. 10-2 ¶ 7. As to what transpired
during the trip from Maryland to South Carolina, the two
attests that during the car ride, he and Alderson discussed
the terms under which each respective business would form the
joint venture involving NABAS. ECF No. 27 ¶¶ 8-10.
Specifically, Lee and Alderson spoke with Gareleck by phone
about the joint venture's budget, research and
development, and such logistics as leasing physical space in
Maryland for a manufacturing facility. ECF No. ¶¶
9-11. Alderson, in contrast, attests that no business was
conducted with Lee during his stay in Maryland and that
“the only reason [he] interacted with Lee at all within
this State was solely to drive him to South
Carolina.” ECF No. 10-2 ¶ 7.
case, both sides agree that NGI, NanoClear, and Mustard Seed,
LLC (a Maryland company owned by Lee's wife, Elizabeth
Lee, a Maryland citizen) eventually memorialized a formal
joint venture agreement involving the development and
marketing of NABAS (“the Agreement”). ECF No. 1-1
¶ 26; ECF No. 10-2 ¶¶ 9-10; ECF No. 27-1
¶ 13; see ECF No. 10-3. Pursuant to the
Agreement, the signatories formed NABAS H20, LLC,
(“H20”), which would become the “sole and
exclusive sales, marketing, distribution, and product
assembly agent for NGI” both in and outside of the
United States. ECF No. 10-3 at 1. Under the Agreement, the
parties stipulated that H20's “primary role”
was to “provide assembly or light manufacturing support
for the NABAS” technology, and that the “physical
location of the Company's assembly location” was to
be “in close proximity to NGI's current location in
Maryland.” ECF No. 10-3 ¶¶ 4, 8. Further,
NGI, also located in Maryland, would provide significant
support to H20 by selling NABAS technology as well as
managing “all aspects of NABAS intellectual
property” to include “ongoing research and
development, ” “patent filing, ” and
“technical support.” ECF No. 10-3 ¶ 4. In
return, H20 would hire “NGI technician personnel”
including Lee, and would also sublease its Maryland property
to NGI. ECF No. 10-3 at 1, ¶ 8.
to be controlled equally by NGI and Mustard Seed on the one
hand and NanoClear on the other. Per the Agreement, NanoClear
and Mustard Seed would select an equal number of H20's
managers, ECF No. 10-3 ¶ 6, and would each possess equal
ownership in H20, ECF No. 10-3 ¶ 5. As to funding,
NanoClear would provide $250, 000 in “initial
capitalization” to H20, which in turn would pay NGI
$250, 000 as consideration for the use of NABAS technology.
short order, this relationship as memorialized in the
Agreement deteriorated. The Complaint avers that Alderson and
Gareleck, through NanoClear, entered the Agreement only to
steal NABAS technology for their own personal benefit and
use. ECF No. 1-1 ¶ 25. In furtherance of this plan,
Alderson became H20's sole manager instead of the parties
hiring “an equal number of managers selected by both
NanoClear and Mustard Seed” as provided in the
Agreement. ECF No. 1-1 ¶¶ 31, 35; ECF No. 10-1 at
12. Nor did H20 open its physical facility in Maryland, near
NGI. ECF No. 10-4 ¶¶ 6, 8.
the Complaint maintains that Alderson and Gareleck began
marketing NABAS technology to the Saudi Royal family in
contravention of the Agreement. ECF No. 1-1 ¶¶ 51-
52; ECF No. 27-1 ¶¶ 27-28. Accordingly, Plaintiffs
brought this suit in the Circuit Court for Montgomery County,
Maryland, alleging breach of contract, fraud, unfair
competition, and deceptive advertising in violation of the
Lanham Act. ECF No. 1-1 ¶¶ 57-166. Defendants noted
removal and now move to dismiss the Complaint, arguing that
the Court lacks personal jurisdiction over all Defendants.
ECF Nos. 1, 10.
Standard of Review
motion to dismiss for lack of personal jurisdiction under
Federal Rule of Civil Procedure 12(b)(2), the plaintiff bears
the burden of establishing jurisdiction by a preponderance of
the evidence. Carefirst of Md., Inc. v. Carefirst
Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir.
2003). In deciding whether personal jurisdiction exists, the
Court accepts all facts averred in the Complaint as true and
most favorably to the plaintiffs. Universal Leather, LLC
v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014)
(quoting Combs v. Bakker, 886 F.2d 673, 676 (4th
Cir. 1989)). The Court may also consider evidence outside the
pleadings, construing such evidence in the light most
favorably to Plaintiffs and in favor of jurisdiction when
possible. All Risks, Ltd. v. Butler, No.
GLR-15-3146, 2016 WL 4435477, at *2 (D. Md. Aug. 22, 2016)
(internal citations omitted); see, e.g., Wolf v.
Richmond Cty. Hosp. Auth., 745 F.2d 904, 908 (4th Cir.
seek dismissal solely on the grounds that personal
jurisdiction is lacking. Defendants specifically contend that
Maryland's long-arm statute does not confer jurisdiction,
and even if it had, ...