United States District Court, D. South Carolina, Greenville Division
REPORT AND RECOMMENDATION OF MAGISTRATE
Jacquelyn D. Austin United States Magistrate Judge.
matter is before the Court on a motion to dismiss filed by
Defendants Anthony Grant (“Grant”) and Rotundra
Hughey (“Hughey”) (collectively, “the
Moving Defendants”). [Doc. 39.] Pursuant to the
provisions of 28 U.S.C. § 636(b)(1)(B) and Local Civil
Rule 73.02(B)(2), D.S.C., this Magistrate Judge is authorized
to review all pretrial matters in this case and to submit
findings and recommendations to the District Court.
August 21, 2017, Plaintiff, proceeding pro se, filed the
instant action in the United States District Court in the
Northern District of Georgia, alleging, among other things,
racketeering activity in violation of the Racketeer
Influenced and Corrupt Organization Act (“RICO
Act”). [Doc. 1.] On December 1, 2017, the case was
transferred to the United Sates District Court in the
District of South Carolina by the Honorable Mark H. Cohen.
[Doc. 9.] On March 14, 2018, the Moving Defendants filed a
motion to dismiss Plaintiff's Complaint. [Doc. 39.] That
same day, the Court issued an Order in accordance with
Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975),
advising Plaintiff of the summary judgment/dismissal
procedure and of the possible consequences if he failed to
adequately respond to the motion. [Doc. 40.] Plaintiff filed
a response in opposition on April 9, 2018 [Doc. 51], to which
the Moving Defendants replied on April 16, 2018 [Doc. 56].
Accordingly, the motion is now ripe for review.
alleges that the Moving Defendants violated his statutory and
constitutional rights when they conspired to steal Azul Med
Spa, LLC (“Azul Med Spa”), its assets, and its
intellectual property from Plaintiff. [See Doc. 1.]
Plaintiff alleges that he and Defendants agreed to form Azul
Med Spa and registered the limited liability company
(“LLC”) with the state of South Carolina in May
2017. [Id. at 7-9.] Plaintiff alleges that he-along
with Defendants-own 100% of the membership interest in Azul
Med Spa and that they each owned a one-third interest.
[Id. at 7.] In forming the business, Plaintiff
contends he invested money, intellectual property, knowledge,
labor and organization skills, and branding and service marks
while Grant and Hughey invested money. [Id.]
Plaintiff asserts that he allowed Grant to purchase a 50%
interest in his intellectual property prior to forming Azul
Med Spa, but also that he assigned the service marks,
trademarks, and copyrights to Azul Med Spa. [Id. at
7, 9.] Plaintiff also asserts that Grant verbally
acknowledged that Plaintiff owned 100% of, presumably, Azul
Med Spa's intellectual property in exchange for an
additional contribution by Grant and Hughey into Azul Med
Spa. [Id. at 9-10.] Plaintiff contends that
Defendants forced him out of the business and are using his
intellectual property. [Id. at 10.]
construed-to the extent the Court understands Plaintiff's
allegations-it appears Plaintiff contends that Defendants
engaged in a series of fraudulent transactions and
conveyances of Plaintiff's intellectual property, assets,
and receivables. [See Doc. 1.] Plaintiff's
Complaint, appears to allege the following claims:
racketeering activity in violation of the RICO Act;
conspiracy to violate the RICO Act; violation of the Lanham
act-trademark infringement; conspiracy to commit fraud;
breach of fiduciary duty; misappropriation of business
opportunity; fraudulent conveyance; breach of the implied
covenant of good faith and fair dealing; conversion; unjust
enrichment; equitable accounting; and a derivative action
asserting Azul Med Spa's claims against Grant. [See
generally Doc. 1.] Plaintiff seeks to recover damages
from Defendants for the improper use and infringement of his
intellectual property. [Id. at 34-39.] Additionally,
Plaintiff requests that the Court issue an order directing
Defendants to destroy any products bearing his intellectual
property and to transfer infringing domain names to
Plaintiff's ownership. [Id.] Plaintiff also
seeks to recover his costs and attorney's fees and for a
trial by jury. [Id.]
Construction of Pro Se Complaint
brought this action pro se, which requires the Court to
liberally construe his pleadings. Estelle v. Gamble,
429 U.S. 97, 106 (1976); Haines v. Kerner, 404 U.S.
519, 520 (1972); Loe v. Armistead, 582 F.2d 1291,
1295 (4th Cir. 1978); Gordon v. Leeke, 574 F.2d
1147, 1151 (4th Cir. 1978). Pro se pleadings are held to a
less stringent standard than those drafted by attorneys.
Haines, 404 U.S. at 520. The mandated liberal
construction means only that, if the Court can reasonably
read the pleadings to state a valid claim on which the
plaintiff could prevail, it should do so. Barnett v.
Hargett, 174 F.3d 1128, 1133 (10th Cir. 1999). A court
may not construct the plaintiff's legal arguments for
him. Small v. Endicott, 998 F.2d 411, 417-18 (7th
Cir. 1993). Nor should a court “conjure up questions
never squarely presented.” Beaudett v. City of
Hampton, 775 F.2d 1274, 1278 (4th Cir. 1985).
to Dismiss Standard
Rule 12(b)(2) of the Federal Rules of Civil Procedure, a
party may move the court to dismiss an action based on a lack
of personal jurisdiction. “[W]hen . . . [a] court
decides a pretrial personal jurisdiction dismissal motion
without an evidentiary hearing, the plaintiff need prove only
a prima facie case of personal jurisdiction.” Mylan
Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 60 (4th Cir. 1993)
(citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir.
1989)). To satisfy this burden, the plaintiff must base its
claim for personal jurisdiction “on specific facts set
forth in the record.” Magic Toyota, Inc. v. Se.
Toyota Distribs., Inc., 784 F.Supp. 306, 310 (D.S.C.
1992). Accordingly, “[t]he pleadings, affidavits, and
other supporting documents presented to the court are
construed in the light most favorable to [the] plaintiff,
drawing all inferences and resolving all factual disputes in
its favor.” Masselli & Lane, PC v. Miller &
Schuh, PA, 215 F.3d 1320, 2000 WL 691100, at *1 (4th
Cir. 2000) (unpublished table opinion) (citing Mylan
Labs., 2 F.3d at 60); see also Mylan Labs., 2
F.3d at 62 (“In deciding whether the plaintiff has
proved a prima facie case of personal jurisdiction, the
district court must draw all reasonable inferences arising
from the proof, and resolve all factual disputes, in the
plaintiff's favor.” (citing Combs, 886
F.2d at 676; Wolf v. Richmond Cty. Hosp. Auth., 745
F.2d 904, 908 (4th Cir. 1984))). The court, however, need not
“‘credit conclusory allegations or draw
farfetched inferences.'” Masselli, 2000 WL
691100, at *1 (quoting Ticketmaster-New York, Inc. v.
Alioto, 26 F.3d 201, 203 (1st Cir. 1994)).
12(b)(4) and 12(b)(5)
Rules 12(b)(4) and (5), a defendant can move to dismiss a
complaint where service of process failed to comply with the
requirements of Rule 4 of the Federal Rules of Civil
Procedure. See Fed. R. Civ. P. 12(b)(4), (5). Rule
4(e) governs the service of process upon individuals in the
United States and provides that service may be accomplished
by either (1) delivering a copy of the summons and complaint
to the defendant personally or to a person of suitable age
and discretion then residing at the defendant's home or
usual place of abode or (2) delivering a copy of the summons
and complaint to an agent authorized by appointment or by law
to receive service of process. Fed.R.Civ.P. 4(e). Rule 4(e)
also provides that service of process may be accomplished
pursuant to the law of the state in which the district court
sits. Id. Noncompliance with Rule 4 does not mandate
dismissal where the necessary parties have received actual
notice of a suit and where they have not been prejudiced by
the technical defect in service. See Karlsson v.
Rabinowitz, 318 F.2d 666, 668-69 (4th Cir.1963)
(upholding service upon the defendant's wife at a home to
which the defendant never intended to return).
Rule 12(b)(6) of the Federal Rules of Civil Procedure, a
claim should be dismissed if it fails to state a claim upon
which relief can be granted. When considering a motion to
dismiss, the court should “accept as true all
well-pleaded allegations and should view the complaint in a
light most favorable to the plaintiff.” Mylan
Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir.
1993). However, the court “need not accept the legal
conclusions drawn from the facts” nor “accept as
true unwarranted inferences, unreasonable conclusions, or
arguments.” Eastern Shore Mkts., Inc. v. J.D.
Assocs. Ltd. P'ship, 213 F.3d 175, 180 (4th Cir.
2000). Further, for purposes of a Rule 12(b)(6) motion, a
court may rely on only the complaint's allegations and
those documents attached as exhibits or incorporated by
reference. See Simons v. Montgomery Cty. Police
Officers, 762 F.2d 30, 31 (4th Cir. 1985). If matters
outside the pleadings are presented to and not excluded by
the court, the motion is treated as one for summary judgment
under Rule 56 of the Federal Rules of Civil Procedure.
respect to well-pleaded allegations, the United States
Supreme Court explained the interplay between Rule 8(a) and
Rule 12(b)(6) in Bell Atlantic Corp. v. Twombly:
Federal Rule of Civil Procedure 8(a)(2) requires only
“a short and plain statement of the claim showing that
the pleader is entitled to relief, ” in order to
“give the Defendants fair notice of what the . . .
claim is and the grounds upon which it rests.” While a
complaint attacked by a Rule 12(b)(6) motion to dismiss does
not need detailed factual allegations, a plaintiff's
obligation to provide the “grounds” of his
“entitle[ment] to relief” requires more than
labels and conclusions, and a formulaic recitation of the
elements of a cause of action will not do. Factual
allegations must be enough to raise a right to relief above
the speculative level on the assumption that all the
allegations in the complaint are true (even if doubtful in
550 U.S. 544, 555 (2007) (footnote and citations omitted);
see also 5 Charles Alan Wright & Arthur R.
Miller, Federal Practice and Procedure § 1216,
at 235-36 (3d ed. 2004) (“[T]he pleading must contain
something more . . . than a bare averment that the pleader
wants compensation and is entitled to it or a statement of
facts that merely creates a ...