Court Opinion

ID: 2659453
Source: CourtListenerOpinion
Date Created: 2014-04-03 02:38:11.67141+00
Date Added: 2024-06-11T09:14:53.275206
License: Public Domain

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.

                                                  2
    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.

                                                 3
       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

                                                  4
           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

                                                  5
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

                                                 6
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

                                                 8
          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

                                                 9
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

                                                10
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.

                                                11
       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

                                               12
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

                                                  13
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.

                                                14
   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

                                                  15
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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