Lopes v. Jetsetdc, LLC

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
ANTHONY LOPES )
)
Plaintiff, )
)
v. ) Case Number
) 1:13-cv-01550 RCL
JETSETDC, LLC, et al. )
)
Defendants. )
)
MEMORANDUM OPINION
Defendants JetSetDC, LLC (“JetSetDC”), Corey Lawrence Moxey (“Moxey”), and Mark
Spain (“Spain”) have brought before the Court this motion to dismiss [26] from a tort action filed
by Plaintiff Anthony Lopes (“Plaintiff”). Defendants advance several arguments in support of
their motion: (1) the Court does not have subject matter jurisdiction over the case; (2) the Court
has not acquired personal jurisdiction over defendant Spain; (3) insufficient service of process;
and (4) plaintiff’s failure to state a claim upon which relief can be granted.
Upon consideration of defendants’ motion [26], plaintiff’s opposition thereto [31], the
record herein, and applicable case law, the Court will DENY defendants’ motion to dismiss.
I. BACKGROUND
Plaintiff Anthony Lopes (“Plaintiff”) filed this suit against defendant JetSetDC, LLC, et al.,
after an alleged assault and battery occurred on the premises of defendant Lotus Lounge DC
(“Lotus Lounge”). Sec. Am. Compl. ¶ 15. Plaintiff is the owner and operator of an automated
teller machine (“ATM”) business and has had an ATM placed at Lotus Lounge since 2009. Id.
at ¶ 13. On or about December 27, 2012, plaintiff visited Lotus Lounge to conduct a service visit
for the ATM placed there. After being admitted through the exit gate by security, defendant
Jameka Ivy (“Ivy”) confronted the plaintiff, asserting that plaintiff needed her permission to walk
past, and demanding he pay an entrance fee. Sec. Am. Compl. ¶ 14. After the plaintiff involved
the manager on duty, defendant Ivy yelled at the manager regarding dissatisfaction with the
situation, and plaintiff was permitted to proceed to service the ATM. Id. at ¶ 14. After servicing
the ATM, plaintiff once again needed to pass by defendant Ivy in order to leave the premises.
When plaintiff attempted to pass defendant Ivy a second time she allegedly cursed at the
plaintiff, hurled racially-charged insults, and demanded that she be paid the entrance fee. Sec.
Am. Comp. ¶ 15. At this time, plaintiff removed his phone in order to take defendant Ivy’s
picture. In response, defendant Ivy slapped the phone from the plaintiff’s hands, and began to
punch the plaintiff with a closed fist numerous times in the face, head, and left eye, before
security personnel pulled the two individuals apart. Id. ¶ 15. Immediately following the physical
altercation, plaintiff felt significant pain and swelling about his head, face, and left eye. Plaintiff
went to retrieve his phone as defendant Ivy was deleting her picture from the phone, and he left
defendant Lotus Lounge’s premises. Sec. Am. Compl. at ¶ 14.
Plaintiff alleges a number of negative physical and emotional effects from the incident and
has sought treatment from ophthalmologists, a dentist, neurologist, and a mental health
professional. Sec. Am. Compl. ¶ 17. Plaintiff now brings a number of claims against defendant
Ivy in her personal capacity and against her various employers: assault; battery; negligence;
negligent hiring and retention; negligent supervision; respondeat superior/agency; and
defamation. Sec. Am. Compl. ¶ 19 – 57.
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On December 18, 2013, defendants JetSetDC, Moxey, and Spain moved to dismiss. On
January 6, 2014, plaintiff filed timely opposition to the motion to dismiss. Defendants did not
file a reply to plaintiff’s opposition.
II. LEGAL STANDARD
A. Motion to Dismiss for Lack of Subject Matter Jurisdiction
A defendant may move to dismiss a complaint or a claim therein, for lack of subject-
matter jurisdiction. Fed. R. Civ. P. 12(b)(1). “Federal courts are courts of limited jurisdiction.
They possess only that power authorized by Constitution and statute, which is not to be expanded
by judicial decree. It is to be presumed that a cause lies outside this limited jurisdiction, and the
burden of establishing the contrary rests upon the party asserting jurisdiction.” Kokkonen v.
Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994); McNutt v. Gen. Motors Acceptance
Corp. of Ind., 298 U.S. 178, 182, (1936); Bernard v. U.S. Dept. of Def., 362 F. Supp. 2d 272, 277
(D.D.C. 2005).
A Rule 12(b)(1) motion “imposes on the Court an affirmative obligation to ensure that it
is acting within the scope of its jurisdictional authority” and “[f]or this reason, the plaintiff’s
factual allegations in the complaint will bear closer scrutiny [than] in resolving a Fed. R. Civ. P.
12(b)(6) motion.” Grand Lodge of the FOP v. Ashcroft, 185 F. Supp. 2d 9, 13 (D.D.C. 2001).
The Court “should accept as true all of the factual allegations contained in the complaint,” but
the Court “is not limited to the allegations contained in the complaint … to determine whether it
has jurisdiction over the case, the Court may consider materials outside the pleadings.” Lipsman
v. Sec’y of the Army, 257 F. Supp. 2d 3, 6 (D.D.C. 2003). The Court should “draw all reasonable
inferences in the nonmovant’s favor,” but “need not accept as true legal conclusions cast as
factual allegations.” Id. at 7.
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The “District Courts shall have original jurisdiction of all civil actions where the matter
in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is
between citizens of the different States.” 28 U.S.C. § 1332(a)(1). “Citizenship is an essential
element of federal diversity jurisdiction; failing to establish citizenship is not a mere technicality.
The party seeking the exercise of diversity jurisdiction bears the burden of pleading the
citizenship of each and every party to the action.” Novak v. Capital Management and
Development Corp., 452 F.3d 902, 906 (D.C. Cir. 2006); see also Naartex Consulting Corp. v.
Watt, 722 F.2d 779, 792 (D.C. Cir. 1983). Further, “diversity jurisdiction does not exist unless
each defendant is a citizen of a different state from each plaintiff. Thus the presence of just one
nondiverse plaintiff … destroys diversity jurisdiction under § 1332.” In re Lorazepam &
Clorazepate Antitrust Litig. v. Mylan Labs., 631 F.3d 537, 541 (D.C. Cir. 2011).
B. Motion to Dismiss for Lack of Personal Jurisdiction
Fed. R. Civ. P. 12(b)(2) provides that a party may assert the defense that the court lacks
personal jurisdiction over the party in question. When a defendant makes a timely objection to
the Court’s exercise of jurisdiction over his person, “the general rule is that a plaintiff must make
a prima facie showing of the pertinent jurisdictional facts.” First Chicago Int'l v. United Exch.
Co., 836 F.2d 1375, 1378 (D.C. Cir. 1988); Diamond Chem. Co. v. Atofina Chems., Inc., 268 F.
Supp. 2d 1, 5 (D.D.C. 2003).
When the Court’s jurisdiction over the matter arises from diversity among the parties,
“personal jurisdiction over the defendant is coextensive with that of the District of Columbia.”
Helmer v. Doletskaya, 393 F.3d 201, 205 (D.C. Cir. 2004). The District of Columbia long-arm
statute provides that:
A District of Columbia court may exercise personal jurisdiction over a
person, who acts directly or by an agent, as to a claim for relief arising
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from the person's -- (1) transacting any business in the District of
Columbia; (2) contracting to supply services in the District of
Columbia; (3) causing tortious injury in the District of Columbia by
an act or omission in the District of Columbia; (4) causing tortious
injury in the District of Columbia by an act or omission outside the
District of Columbia if he regularly does or solicits business [in the
District]…
D.C. Code. Ann. § 13-423(a) (1981). Once the “literal terms of the long-arm statute have been
satisfied,” a plaintiff must still show that the exercise of personal jurisdiction is within the
permissible bounds of the Due Process Clause through a showing that the defendant
purposefully established minimum contacts with the District of Columbia, and that the exercise
of personal jurisdiction over the defendant will not offend traditional notions of fair play and
substantial justice. Helmer, 393 F.3d at 205; Int'l Shoe Co. v. Washington, 326 U.S. 310, 316
(1945); GTE New Media Servs. v. BellSouth Corp., 199 F.3d 1343, 1351 (D.C. Cir. 2000).
When a “plaintiff is faced with a motion to dismiss for lack of personal jurisdiction,” he
is “entitled to reasonable discovery, lest the defendant defeat the jurisdiction of a federal court by
withholding information on its contacts with the forum.” Diamond Chem. Co., 268 F. Supp. at
15. The D.C. Circuit’s “standard for permitting jurisdictional discovery is quite liberal;”
jurisdictional discovery is proper so long as a party demonstrates that it can supplement its
jurisdictional allegation.” Diamond Chem. Co., 268 F. Supp. at 15; GTE New Media Servs., 199
F.3d at 1351. But “a plaintiff must have at least a good faith belief that such discovery” will
allow it to establish personal jurisdiction. Diamond Chem. Co., 268 F. Supp. 2d at 15;
Caribbean Broad. Sys., v. Cable & Wireless PLC, 148 F.3d 1080, 1090 (D.C. Cir. 1998).
C. Motion to Dismiss for Insufficient Service of Process
Fed. R. Civ. P. 4 provides the requirements for service of process. Plaintiff is responsible
for having the summons and complaint served within the allotted time, by a person who is at
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least 18 years old and not a party to the case. Fed. R. Civ. P. 4(c). A summons must be attached
to the complaint, and contain the name of the court and the parties; it must be directed to the
defendant; it must state the name and address of the plaintiff’s attorney, and the time within
which the defendant must appear; it must notify the defendant of the consequences for failure to
appear; it must be signed by the clerk and bear the court’s seal. Fed. R. Civ. P. 4(a). Plaintiff
must serve the defendant within 120 days after the complaint is filed, or seek an extension from
the court for good cause. Fed. R. Civ. P. 4(m). An individual may be served by following state
law, or by delivering a copy of the summons and complaint to the individual personally, leaving
a copy of each at the individual's dwelling or usual place of abode with someone of suitable age
and discretion who resides there, or by delivering a copy of each to an agent authorized by
appointment or by law to receive service of process. Fed. R. Civ. P. 4(e)(2).
When serving a corporation, partnership, association, or unincorporated association, the
party must be served in a judicial district of the United States, in the manner prescribed by Rule
4(e)(1) for serving an individual, or by delivering a copy of the summons and complaint to an
officer, a managing or general agent, or any other agent authorized by appointment or by law to
receive service of process. Fed. R. Civ. P. 4(h)(1).
D. Motion to Dismiss for Failure to State A Claim
Fed. R. Civ. P. 12(b)(6) provides that a party may assert the defense that the plaintiff has
failed to state a claim upon which relief can be granted. A complaint “should not be dismissed
for failure to state a claim unless, taking as true the facts alleged in the complaint, it appears
beyond doubt that the plaintiff can prove no set of facts in support of his claim which would
entitle him to relief.” Rochon v. Gonzalez, 438 F.3d 1211, 1216 (D.C. Cir. 2006); Caribbean
Broad. Sys., 148 F.3d at 1086. This is the appropriate standard, as “the issue presented by
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a motion to dismiss is not whether a plaintiff will ultimately prevail but whether the claimant is
entitled to offer evidence to support the claims.” Caribbean Broad Sys., 148 F.3d at 1086. To
survive a motion to dismiss “the pleadings must suggest a plausible scenario that shows that the
pleader is entitled to relief.” Jones v. Horne, 634 F.3d 588, 595 (D.C. Cir. 2009); Atherton v.
D.C. Office of the Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009). “A claim has facial plausibility
when the plaintiff pleads factual content that allows the court to draw the reasonable inference
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). Although "detailed factual allegations are not necessary to withstand a Rule 12(b)(6)
motion … a plaintiff must furnish more than labels and conclusions or a formulaic recitation of
the elements of a cause of action." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007).
III. ANALYSIS
Defendants advance a number of arguments in favor of their motion to dismiss. Each will be
addressed in turn. As an initial matter, the Court hereby DENIES defendants’ motion to dismiss.
The Court finds that subject matter jurisdiction exists under 28 U.S.C. § 1332, as complete
diversity exists between the parties. The Court finds that service of process was sufficient for all
named defendants in the motion. Further, the Court finds that it may exert personal jurisdiction
over defendant Spain, as there was no deficiency in service of process, and the defendant was
physically serviced in the District of Columbia. Finally, the Court finds that plaintiff has pleaded
sufficient facts to withstand a motion to dismiss for failure state a claim upon which relief can be
granted.
A. Defendants’ motion to dismiss for lack of subject matter jurisdiction is
denied, as complete diversity between the parties exists under 28 U.S.C. §
1332.
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Defendants first assert that the Court lacks subject matter jurisdiction over the case under
28 U.S.C. § 1332(a). Defendants argue that plaintiff failed to plead the citizenship status for
members of defendants JetSetDC and Inner Circle 1420, two limited liability companies
(“LLCs”), and because of this deficiency, complete diversity does not exist between the parties.
Def.s’ Mot. Dismiss 3. 28 U.S.C. § 1332 does not specify the citizenship status for non-
corporate legal persons. The Supreme Court “has long maintained a bright-line rule limiting
corporate citizenship to corporations.” C.T. Carden v. Arkoma Assocs., 494 U.S. 185, 190
(1990). Non-corporate entities “are analogized to partnerships, which carry the citizenship of
their members. Id. at 195-96. The District of Columbia and “every court that has addressed the
citizenship status of LLCs has held unequivocally that LLCs do not enjoy corporate
citizenship.” Johnson-Brown v. 2200 M St. LLC, 257 F. Supp. 2d 175, 180 (D.D.C. 2003). As
an LLC, “diversity jurisdiction in a suit by or against the entity depends on the citizenship of all
the members.” Carden v. Arkoma Assocs., 494 U.S. 185, 195-96 (1990).
The Court believes that plaintiff’s second amended complaint [17] pleads facts sufficient
to establish complete diversity between plaintiff and defendant Inner Circle. Plaintiff pleads that
defendant David McLeod is a resident and citizen of the state of Maryland, and that he is the
owner and operator of defendant Inner Circle 1420, LLC. Sec. Am. Compl. at ¶8. These factual
claims were not contested by defendants in their opposition to plaintiff’s motion for leave to
amend [25], and the Court has not been presented with any evidence to the contrary. Further,
defendants do not argue that defendant Inner Circle is comprised of members other than
defendant McLeod. Defendant McLeod’s status as owner and operator of defendant Inner Circle
is sufficient to constitute membership in the LLC, and the LLC carries the citizenship of the state
of Maryland. C.T. Carden, 494 U.S. at 190
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Plaintiff’s second amended complaint also pleads facts sufficient to establish complete
diversity between plaintiff and defendant JetSetDC, LLC. Defendants do not argue that plaintiff
has failed to plead the requisite citizenship status for all members of defendant JetSetDC.
Defendants argue that plaintiff’s second amended complaint is “devoid of any allegation of the
citizenship” of the LLC members. Def.s’ Mot. Dismiss 5. Plaintiff pleads that defendants
Moxey and Spain are owners, operators, and alter egos of defendant JetSetDC. Sec. Am. Compl.
¶ 4. Plaintiff further pleads that defendant Moxey is a citizen and resident of Washington, D.C.,
and that defendant Spain is a citizen and resident of the state of Maryland, providing a specific
address of residence for each defendant. Id at ¶ 5-6. These factual allegations are not contested.
As an LLC carries the citizenship of its members, defendant JetSetDC carries the citizenship of
Maryland and Washington, D.C.
Complete diversity exists between the plaintiff and defendants Inner Circle 1420, LLC
and JetSetDC, LLC. Defendants’ motion to dismiss for lack of subject matter jurisdiction is
denied.
B. Defendants’ motion to dismiss due to insufficient service of process for
defendants JetSetDC, Spain, and Moxey is denied.
Defendants have moved to dismiss under Fed. R. Civ. P. 12(b)(5), asserting insufficiency
of service of process for all three named defendants in the motion. The Court will address the
issue of sufficient service of process prior to the issue of personal jurisdiction over defendant
Spain, as service of process may impact the Court’s ability to exercise personal jurisdiction over
the defendant.
Defendants contend that service of defendant JetSetDC, LLC was deficient due to the fact
that service of process was not made to the company’s registered agent, Paul W. Gardner, but
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rather to defendant Spain, who is not designated or authorized to receive service of process.
Def.s’ Mot. Dismiss 8. Fed. R. Civ. P. 4(h)(1)(B) provides that service of a corporation,
partnership, or association can be accomplished “by delivering a copy of the summons and of the
complaint to an officer, a managing or general agent, or any other agent authorized by appoint or
by law to receive service of process.” This manner of service also applies to LLCs. Estate of
Klieman v. Palestinian Auth., 547 F. Supp. 2d 8, 13 (D.D.C. 2008).
Generally, “service is sufficient when made upon an individual who stands in such a
position as to render it fair, reasonable, and just to imply the authority on his part to receive
service.” Estate of Klieman, 547 F. Supp. 2d at 13. Plaintiff pleads that defendant Spain is one
of two individuals comprising the membership of JetSetDC, LLC, that he is an owner, operator,
and alter-ego of JetSetDC, and holds a substantial amount of stock in the company. Sec. Am.
Compl. ¶ 14. Plaintiff has pleaded sufficient facts to establish that defendant Spain is an officer
or managing agent of defendant JetSetDC. By personally delivering a copy of the summons and
complaint to an owner, operator, and alter ego of the defendant LLC, “there is no doubt that [the
defendant company] was adequately informed of the commencement of this action,” and that
service of process upon him comports with Fed. R. Civ. P. 4(h)(1) for the purposes of serving
defendant JetSetDC, LLC. Flynn v. Pulaski Constr. Co., 2006 U.S. Dist. LEXIS 1680, at *12
(D.D.C. 2006).
Defendants further contend that defendant Spain was not properly served with a
complaint and summons in accordance with Rule 4, arguing that he simply did not receive the
complaint and summons from the process server. Def.s’ Mot. Dismiss 9. The defendants fail to
substantiate or elaborate, at any length, on the claim that defendant Spain was not personally
served on November 2, 2013 at 1:30AM outside of 1720 I. Street, NW, Washington, D.C. The
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record shows no evidentiary support for this claim. The record contains signed and sworn
affidavits [19, 20, 21] stating, under penalty of perjury, that defendants Spain, Moxey, and
JetSetDC were personally served copies of the complaint and summons in the District of
Columbia. These affidavits state that service of process was timely, and delivered by a person
who is at least 18 years old and not a party to the case, in compliance with Rule 4(c) and Rule
4(m). Further, the affidavits satisfy Rule 4(l)(1)’s requirement that proof of service be made to
the Court. Mann v. Castiel, 681 F.3d 368, 373 (D.C. Cir. 2012). No evidence has been
presented to the Court to suggest otherwise. Based on the record before it, service of process for
defendant Spain was sufficient under Rule 4.
Finally, defendants contend that service of process for defendants Spain and Moxey was
insufficient due to the fact that “the affidavit of service fails to state how the summons and
complaint was served.” Def.s’ Mot. Dismiss 9. Again, defendants fail to substantiate at any
length why an affidavit’s failure to describe the service of process itself is grounds for quashing
the service of process. A substantive description of how the summons and complaint were
served is not found in the requirements of a summons under Rule 4(a), nor is it found under the
requirements for proof of service under Rule 4(l). As noted supra, the record shows signed and
sworn affidavits in compliance with Rule 4. Absent evidence to the contrary, service of process
for defendants Spain and Moxey was sufficient.
Defendants’ motion to dismiss on the grounds that service of process for defendants
JetSetDC, Spain, and Moxey was insufficient is denied
C. The Court may exercise personal jurisdiction over defendant Mark Spain,
and defendants’ motion to dismiss for lack of personal jurisdiction is denied.
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The Court finds it unnecessary to conduct an analysis of whether the corporate veil
should be pierced for purposes of determining whether the Court may exercise personal
jurisdiction over defendant Spain. Service of process for defendant Spain was valid, and
occurred on November 2, 2013, outside of 1720 I St. NW, Washington, D.C. 20006. Thus,
“physical service of process on the individual” occurred within the District of Columbia and “is
clearly sufficient to support the Court’s exercise of personal jurisdiction over him.” Overseas
Partners v. Progen Musavirlik Ve Yonetim Hizmetleri, 15 F. Supp. 2d 47, 51 (D.D.C. 1998) (that
a member of foreign LLC was physically served within the District was clearly sufficient to
establish personal jurisdiction). A Court’s exercise of “jurisdiction based on physical presence
alone constitutes due process because it is one of the continuing traditions of our legal system
that define the due process standard of traditional notions of fair play and substantial justice."
Burnham v. Superior Court of California, 495 U.S. 604, 619 (1990); see also Begun v.
Auvongazeb, 695 A.2d 112, 113-14 (D.C. 1997). Indeed, there is a “formidable body of
precedent” that “reflects the near-unanimous view that service of process confers state-court
jurisdiction over a physically present nonresident, regardless of whether he was only briefly in
the State or whether the cause of action is related to his activities there.” Burnham, 495 U.S. at
606. The Court may exercise personal jurisdiction over defendant Spain, and the motion to
dismiss is denied.
D. Defendants’ motion to dismiss for failure to state a claim upon which relief
can be granted is denied, as plaintiff has pleaded sufficient facts under the
alter ego doctrine.
Defendants’ final grounds for dismissal is the argument that plaintiff has failed to plead a
claim upon which relief can be granted under Fed. R. Civ. P. 12(b)(6). Specifically, defendants
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assert that plaintiff’s claims of negligence, negligent hiring and retention, negligent supervision,
and respondeat superior/agency, as brought against defendants Spain and Moxey, must be
dismissed because they are based solely on defendants’ status as members of an LLC, and that
no facts have been pleaded to justify piercing the corporate veil. Def.s’ Mot. Dismiss 9.
Generally, courts do not have “jurisdiction over individual officers and employees of a
corporation just because the court has jurisdiction over the corporation.” Overseas Partners v.
Progen Musavirlik Ve Yonetim Hizmetleri, 15 F. Supp. 2d 47, 51 (D.D.C. 1998). This rule
applies to LLCs. Ruffin v. New Destination, LLC, 773 F. Supp. 2d 34 (D.D.C. 2010). But an
exception exists: under certain circumstances, a Court may pierce the corporate veil. Courts
typically reserve this action “for the rare circumstances in which an individual or corporation
abuses the corporate form or exerts undue influence over a corporate entity to accomplish an
improper or unlawful purpose.” Amore v. Accor N. Am. Inc., 529 F. Supp. 2d 85, 93 (D.D.C.
2008).
As there is no federal interest implicated in this case, and the plaintiff seeks to pierce the
corporate veil for purposes of allocating state tort liabilities, the state law “where a corporation is
incorporated, or where the alleged corporate wrongdoing occurred” guides the Court’s veil-
piercing analysis. United States ex rel. Small Business Admin. V. Pena, 731 F.2d 8, 12 (D.C. Cir.
1984); Amore, 529 F. Supp. 2d at 93. In the instant case, there is a question as to which state law
should be applied: either the veil-piercing doctrine in the District of Columbia – where the events
occurred – or in Maryland, where defendant JetSetDC, LLC was organized, and where its
principal office is located. Under District of Columbia choice-of-law rules, “where a conflict
exists between the laws of two jurisdictions, a court must conduct an ‘interest analysis’ in which
it determines which jurisdiction’s underlying policy would be most advanced by having its law
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applied to the matter.” Amore, 529 F. Supp. 2d at 93; see also Kuhn & Kogan, Chtd. v. Jeffrey
C. Mensh & Assocs., Inc., 77 F. Supp. 2d 52, 54 (D.D.C. 1999).
In the District of Columbia, generally, “the corporate entity will be respected, but a party
may be permitted to pierce the corporate veil upon proof, that there is (1) unity of ownership and
interest, and (2) use of the corporate form to perpetrate fraud or wrong, or other considerations of
justice and equity justify it.” McWilliams Ballard, Inc. v. Broadway Management Co., Inc., 636
F.Supp.2d 1, 11 (D.D.C. 2009); Amore, 529 F. Supp. 2d at 93. Under Maryland law, “a court
may pierce the corporate veil only to prevent fraud or enforce a paramount equity.” Balt. Line
Handling Co. v. Brophy, 771 F. Supp. 2d 531, 552 (D. Md. 2010). In Maryland, the alter ego
doctrine is not a separate basis for piercing the veil, but is rather subsumed "in the notion of
paramount equity.” Brophy, 771 F. Supp. 2d at 552; Hildreth v. Tidewater Equipment Co., Inc.,
838 A.2d 1204, 1212-13 (Md. 2003). To pierce the corporate veil, plaintiff's well-pleaded
allegations and evidence must be tantamount to fraud or invoke a paramount equity. Brophy,
771 F. Supp. 2d at 553.
The Court believes that no real conflict exists between veil-piercing doctrines in the District
of Columbia and Maryland. The Court acknowledges that “Maryland is more restrictive than
other jurisdictions in allowing a plaintiff to pierce a corporation's veil.” Horlick v. Capital
Women's Care, LLC, 896 F. Supp. 2d 378, 395 (D. Md. 2011). However, both doctrines are
firmly grounded in notions of equity, and both Maryland and the District of Columbia recognize
the alter ego theory as a means to pierce the corporate veil. The Court believes that no real
conflict exists between the two jurisdictions, and it will proceed by applying the District of
Columbia’s law.
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Plaintiff relies on the alter ego theory as justification for piercing the corporate veil to hold
defendants Spain and Moxey personally liable. The D.C. Circuit has found it appropriate to
pierce the veil when “the corporation, rather than being a distinct, responsible entity, is in fact
the alter ego or business conduit of the person in control.” Labadie Coal Co. v. Black, 672 F.2d
92, 97 (D.C. Cir. 1982); Shapiro, Lifschitz & Schram, P.C. v. R.E. Hazard, Jr. Ltd. P’ship, 90 F.
Supp. 2d 15, 22 (D.D.C. 2006). Under the District’s veil-piercing test, courts generally inquire
as to “whether corporate formalities have been observed; whether there has been commingling of
corporate and shareholder funds, staff and property; whether a single shareholder dominates the
corporation; whether the corporation is adequately capitalized; and, especially, whether the
corporate form has been used to effectuate a fraud.” Ruffin v. New Destination, LLC, 773 F.
Supp. 2d 34, 41 (D.D.C. 2011). But the inquiry ultimately rests on whether “the corporation is,
in reality, an alter ego or business conduit of the person in control.” Id. at 41.
Plaintiff pleads that defendants Spain and Moxey are the “owners and operators of JetSet,
and are alter egos of this corporation.” Sec. Am. Compl. ¶ 4. Plaintiff further pleads that
“substantial ownership of corporate stock is concentrated in one person or a few persons,
corporate formalities have been disregarded, and other factors support disregarding the corporate
entity.” Id. at ¶4. The Court believes, taking them as true, that plaintiff has pleaded sufficient
facts to withstand defendants Rule 12(b)(6) motion to dismiss. The Court recognizes that
plaintiff’s pleaded facts in support of piercing the corporate veil are minimal, but the Court
believes it is difficult for the plaintiff, at this stage, to obtain substantive information in support
of his contention. A claim should be dismissed only when “it appears beyond doubt that the
plaintiff can prove no set of facts in support of his claim which would entitle him to relief.”
Rochon, 438 F.3d at 1216. To survive, the pleading must “suggest a plausible scenario” entitling
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relief, Jones, 634 F.3d at 595, and must allow the court “to draw the reasonable inference that the
defendant is liable.” Ashcroft, 556 U.S. at 678. The Court believes that plaintiff has met this
requirement, albeit barely, and “is entitled to offer evidence to support [his] claims.” Caribbean
Broad Sys., 148 F.3d at 1086. Thus, defendants’ motion to dismiss for failure to state a claim
upon which relief can be granted is denied.
IV. CONCLUSION
For the aforementioned reasons, the Court will DENY defendants’ Motion to Dismiss. A
separate Order consistent with this Memorandum Opinion shall issue this date.
Signed by Royce C. Lamberth, U.S. District Judge, on February 19, 2014.
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