Levy et al v. Charlotte School of Law, Llc et al

MOTION to Dismiss for Lack of Jurisdiction

W.D.N.C.April 21, 2017

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION CASE NO. 3:17-cv-00026-GCM MS. RAISSA LEVY, MR. JAMES VILLANUEVA, MS. SHANNA RIVERA, MR. ANDRÉ MCCOY individually and on behalf of all similarly situated persons, Plaintiffs, v. CHARLOTTE SCHOOL OF LAW, LLC, INFILAW HOLDING, LLC, INFILAW CORPORATION, STERLING PARTNERS, L.P., and STERLING CAPITAL PARTNERS, GMBH & CO. KG, Defendants. INFILAW HOLDING, LLC’s MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Defendant InfiLaw Holding, LLC (“Holding”), specially appearing for the purpose of challenging personal jurisdiction, moves under Rule 12(b)(2) of the Federal Rules of Civil Procedure for an order dismissing all of Plaintiffs’ claims against Holding. Pursuant to the Local Rule 7.1, Holding has contemporaneously submitted a memorandum in support of this motion. This the 21st day of April, 2017. WOMBLE CARLYLE SANDRIDGE & RICE A Limited Liability Partnership /s/ Sarah Motley Stone Debbie W. Harden, NCSB No. 10576 Sarah Motley Stone, NCSB No. 34117 One Wells Fargo Center, Suite 3500 301 South College Street Charlotte, North Carolina 28202-6037 Case 3:17-cv-00026-GCM Document 44 Filed 04/21/17 Page 1 of 3 2 Telephone: (704) 331-4943 Facsimile: (704) 338-7813 E-mail dharden@wcsr.com; sstone@wcsr.com Johnny W. Loper, NCSB No. 15533 555 Fayetteville Street, Suite 1100 PO Box 831 Raleigh, North Carolina 27601 Telephone: (919) 755-2116 Facsimile: (919) 755-6056 E-mail jloper@wcsr.com Attorneys for Defendants Charlotte School of Law, InfiLaw Corporation, and InfiLaw Holding, LLC COOLEY LLP /s/ David E. Mills David Edward Mills (admitted Pro Hac Vice) Michael DeWayne Hays (admitted Pro Hac Vice) COOLEY LLP 1299 Pennsylvania Ave., N.W., Suite 700 Washington, DC 20004-2400 Telephone: (202) 842-7800 Facsimile: (202) 842-7899 Email: dmills@cooley.com Email: mhays@cooley.com Attorneys for Defendants Charlotte School of Law, InfiLaw Corporation, and InfiLaw Holding, LLC Case 3:17-cv-00026-GCM Document 44 Filed 04/21/17 Page 2 of 3 3 CERTIFICATE OF SERVICE I hereby certify that on April 21, 2017, I have electronically filed the foregoing INFILAW HOLDING, LLC’s MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION with the Clerk of Court using CM/ECF, which will send notification of such filing to the following: Amanda A. Mingo Rawls, Scheer, Foster, Mingo & Culp 1011 E. Morehead Street, Suite 300 Charlotte, NC 28204 amingo@rsfmlaw.com Brian Leighton Kinsley Daniel Ray Francis Crumley Roberts 2400 Freeman Mill Rd., Suite 200 Greensboro, NC 27406 blkinsley@crumleyroberts.com, drfrancis@CrumleyRoberts.com Philip Bohrer Bohrer Brady, LLC 8712 Jefferson Highway, Suite B Baton Rouge, Louisiana 70809 phil@bohrerbrady.com Robert E. Harrington, N.C. Bar No. 26967 Adam K. Doerr, N.C. Bar No. 37087 101 North Tryon Street, Suite 1900 Charlotte, NC 28246 Telephone: (704) 377-2536 Facsimile: (704) 378-4000 rharrington@robinsonbradshaw.com adoerr@robinsonbradshaw.com Peter L. Welsh William L. Roberts Prudential Tower, 800 Boylston Street Boston, MA 02199-3600 (617) 951-7865 (617) 951-7313 peter.welsh@ropesgray.com william.roberts@ropesgray.com Nicholas M. Berg 191 North Wacker Drive, 32nd Floor Chicago, IL 60606 (312) 845-1322 nicholas.berg@ropesgray.com /s/ Sarah Motley Stone Sarah Motley Stone Case 3:17-cv-00026-GCM Document 44 Filed 04/21/17 Page 3 of 3 UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA CHARLOTTE DIVISION CASE NO. 3:17-cv-00026-GCM MS. RAISSA LEVY, MR. JAMES VILLANUEVA, MS. SHANNA RIVERA, MR. ANDRÉ MCCOY individually and on behalf of all similarly situated persons, Plaintiffs, v. CHARLOTTE SCHOOL OF LAW, LLC, INFILAW HOLDING, LLC, and INFILAW CORPORATION, STERLING PARTNERS, L.P., and STERLING CAPITAL PARTNERS, GMBH & CO. KG, Defendants. MEMORANDUM OF INFILAW HOLDING, LLC IN SUPPORT OF MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION Defendant InfiLaw Holding, LLC (“Holding”), pursuant to Rule 7.1 of the Local Rules of Civil Procedure, respectfully submits this memorandum in support of its motion to dismiss for lack of personal jurisdiction pursuant to Federal Rule of Procedure 12(b)(2). 1 As established below, Holding (the corporate grandparent of Charlotte School of Law, LLC (“CSL”)), has no contacts with North Carolina and therefore must be dismissed from this case. 1 Holding appears specially to move for dismissal under Rule 12(b)(2) of the Federal Rules of Civil Procedure for lack of personal jurisdiction. Alternatively, if the Court determines that it has personal jurisdiction, Holding also incorporates by reference all arguments for dismissal presented in the Defendants’ Memorandum of Points and Authorities in Support of Motion to Dismiss for Failure To State a Claim. Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 1 of 14 2 SUMMARY Plaintiffs Raissa Levy, James Villanueva, Shanna Rivera, and Andre McCoy, students and former students at CSL, allege on behalf of themselves and a putative class of persons similarly situated, that CSL should have made certain disclosures in connection with its accreditation by the American Bar Association and failed to provide a “rigorous curriculum,” among other things. . (Second Amended Complaint (“SAC”) ¶¶ 2, 25-31, 34-37.) Plaintiffs claim that they were injured by this conduct in various ways. (SAC ¶¶ 42, 45, 49, 53, 61.) Plaintiffs correctly allege that Holding is foreign entity with its principal place of business in Florida. (SAC ¶ 10); See Declaration of Rick Inatome, attached to the Motion submitted herewith as Exhibit A (hereinafter “Ex. A”) ¶ 3. 2 Holding is a corporate holding company that owns InfiLaw Corporation, a Delaware Corporation with its principal place of business in Florida, which in turn owns CSL. Ex. A ¶ 3, 5–6. In short, Holding is CSL’s corporate grandparent. Holding itself, however, has no connection with North Carolina and no involvement in the allegations asserted in the Second Amended Complaint: > It has no employees, owns no property, has no bank accounts, engages in no advertising, does no business, and pays no taxes in this state. Ex. A ¶¶ 10–16. 3 > The only remote relationship Holding has with this state is its indirect ownership interest in CSL, which operates in Charlotte. Ex. A ¶¶ 6. > Holding properly observes corporate formalities and does not participate in the day-to-day operations of CSL. Ex. A ¶¶ 17–20. 2 Plaintiffs allege that “INFILAW HOLDING, LLC is a foreign corporation.” (SAC ¶ 10.) In fact, Holding is a Delaware limited liability company. Ex. A. ¶ 3. The difference is not material to this motion, although it could be material to attempts to pursue claims against the members or managers of a limited liability company like Holding. 3 Plaintiffs correctly allege—twice—that Defendant InfiLaw Corporation (“Corporation”) is licensed to conduct business in North Carolina. (FAC ¶¶ 9-10). Holding, however, is not. Ex. A. ¶ 8. Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 2 of 14 3 > Holding was not involved in the alleged misrepresentations or other conduct or facts alleged in the Complaint. Ex. A ¶ 21. In an attempt to subject the corporate grandparent to this Court’s jurisdiction and potential liability in this case, Plaintiffs conclusorily allege – based entirely on generic and formulaic allegations – that Holding “conduct[ed] substantial business in Mecklenburg County and at all relevant times ha[s] been involved in the daily management, control, finances, and direction of [CSL] … and routinely exercise[d] control, management, functions and promotion of [CSL] such to be subject to personal jurisdiction of the court.” (SAC ¶ 15.) Plaintiffs also allege, without any factual support, that Holding “jointly own[s], operate[s], and control[s]” CSL together with Corporation. (SAC ¶ 18.) These generic allegations, devoid of any factual content, are the only specific allegations against Holding. They are insufficient to establish personal jurisdiction over Holdings. Because North Carolina lacks personal jurisdiction over Holding, and because Plaintiffs have not alleged facts sufficient to establish that CSL or InfiLaw Corporation should be treated as the alter ego of Holding, this Court should dismiss Plaintiffs’ claims against Holding. ARGUMENT I. Standard for Personal Jurisdiction. A federal court may exercise personal jurisdiction over a foreign defendant only if the state in which the court sits could exercise personal jurisdiction. Carefirst of Maryland, Inc. v. Carefirst Pregnancy Centers, Inc., 334 F.3d 390, 396 (4th Cir. 2003). A state may not exercise personal jurisdiction over a defendant unless (1) it is authorized to do so by the state’s long-arm statute and (2) the exercise is consistent with the due process clause of the Fourteenth Amendment. Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009). In North Carolina, the scope of the long-arm statute is generally understood to extend to the Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 3 of 14 4 limits of due process, and thus the personal jurisdiction analysis typically collapses into a single inquiry. CEM Corp. v. Pers. Chemistry AB, 192 F. Supp. 2d 438, 440 (W.D.N.C. 2002), aff'd, 55 Fed. Appx. 621 (4th Cir. 2003); Dillon v. Numismatic Funding Corp., 291 N.C. 674, 676, 231 S.E.2d 629, 631 (1977). The benchmark for personal jurisdiction was set forth by the U.S. Supreme Court in International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945), in which the Court held that a court may exercise jurisdiction over a person or entity if it has sufficient “minimum contacts” with the forum “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’” Id. (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). This principle “presaged the development of two categories of personal jurisdiction”: general and specific. Daimler AG v. Bauman, 134 S. Ct. 746, 754 (2014). Each defendant’s jurisdictional contacts must be evaluated separately. Id. II. This Court Does Not Have General Personal Jurisdiction Over Holding. General jurisdiction permits a court to hear any and all claims against a person or entity, regardless of whether the alleged wrongdoing occurred in the forum state. The Supreme Court has recently held that, aside from the “exceptional case,” general personal jurisdiction over a corporation is appropriate only in its state of incorporation or principal place of business: Here, neither Daimler nor MBUSA is incorporated in California, nor does either entity have its principal place of business there. If Daimler's California activities sufficed to allow adjudication of this Argentina-rooted case in California, the same global reach would presumably be available in every other State in which MBUSA's sales are sizable. Such exorbitant exercises of all-purpose jurisdiction would scarcely permit out-of-state defendants “to structure their primary conduct with some minimum assurance as to where that conduct will and will not render them liable to suit.” It was therefore error for the Ninth Circuit to conclude that Daimler, even with MBUSA's contacts attributed to it, was at home in California, and hence subject Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 4 of 14 5 to suit there on claims by foreign plaintiffs having nothing to do with anything that occurred or had its principal impact in California. Bauman, 134 S. Ct. at 761 & n. 19 (2014) (citation omitted). Where personal jurisdiction is challenged, the plaintiff bears the burden of proving a prima facie case of personal jurisdiction. Mylan Labs., Inc. v. Akszo, N.V., 2 F.3d 56, 69-60 (4th Cir. 1993). There is no basis for general jurisdiction over nonresident Holding. Plaintiffs admit that Holding is a foreign business entity with its principal place of business in Florida. (SAC ¶ 10.) Further, Plaintiffs do not come close to alleging facts necessary to bring this case within the Supreme Court’s narrow category of “exceptional cases” where general personal jurisdiction may exist over a nonresident company. Bauman, 134 S. Ct. at 761 n.19. In addition to the state of incorporation and where it has its principal place of business, a corporation is subject to general jurisdiction only where it is “fairly regarded as at home.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 131 S. Ct. 2846, 2853-54 (2011). To establish general jurisdiction under this exception, a defendant’s contacts with the forum state must be “substantial, continuous and systematic,” and “only a limited set of affiliations with a forum will render a defendant amendable to all-purpose jurisdiction there.” Bauman, 134 S. Ct. at 760. “The ‘continuous and systematic contacts test is a difficult one to meet, requiring extensive contacts between a defendant and a forum.’” Johnston v. Multidata Systems Intern. Corp., 523 F.3d 602, 609 (5th Cir. 2008); see also Wright and Miller, § 1067.5 General Jurisdiction, 4 Fed. Prac. & Proc. Civ. § 1067.5 (4th ed.) (“[T]he threshold contacts required for a constitutional assertion of general jurisdiction over a nonresident defendant are very substantial, indeed.”). Importantly, an entity is not subject to general personal jurisdiction simply because it has a subsidiary operating in the state. Bauman, 134 S. Ct. at 760; see also Ash v. Burnham Corp., 80 N.C. App. 459, 462, 343 S.E.2d 2, 4 (1986), aff’d, 318 N.C. 504, 349 S.E.2d 579 (1986). Apart Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 5 of 14 6 from the threadbare allegation that Holding has an ownership interest in CSL and “conducts business in Mecklenburg County”—presumably through its alleged involvement in the “management, control, finances, and direction” of CSL—there are no specific allegations against Holding in the Complaint. (SAC ¶¶ 15, 18.) This is clearly not enough to establish general personal jurisdiction over Holding. III. This Court Does Not Have Specific Personal Jurisdiction Over Holding. To establish specific personal jurisdiction, Plaintiffs must show that “defendant’s suit- related conduct [created] a substantial connection with the forum state.” Walden v. Fiore, 134 S. Ct. 1115, 1121 (2014). In other words, specific jurisdiction over a defendant exists only when “the defendant ‘purposefully directed his activities at the residents of the forum’ and . . . the plaintiff’s cause of action ‘arises out of those activities.’” Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 277 (4th Cir. 2009) (quoting Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)) (internal alterations omitted); see also Dailey v. Popma, 191 N.C. App. 64, 70, 662 S.E.2d 12, 16 (2008) (“Specific jurisdiction exists when the cause of action arises from or is related to defendant’s contacts with the forum.”). Specific personal jurisdiction must be established independently for each claim alleged by the plaintiff. See, e.g., Seiferth v. Helicopteros Atuneros, Inc., 474 F.3d 266, 274-75 (5th Cir. 2006); see also Legacy Data Access, LLC v. MediQuant, Inc., 315CV00584FDWDSC, 2016 WL 797603, at *2 (W.D.N.C. Feb. 26, 2016) (collecting cases supporting this proposition within the Fourth Circuit). When a plaintiff brings claims against several affiliated entities, “[e]ach defendant’s contacts with the forum state must be assessed individually.” Keeton v. Hustler Magazine, Inc., 465 U.S. 770, 781 n.13 (1984). Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 6 of 14 7 Plaintiffs do not specifically contend that Holding has any contacts with North Carolina independent of its ownership interest and management of its indirect subsidiary, CSL. (See SAC ¶¶ 15, 18.) Notably, although the Second Amended Complaint broadly speaks of the “Defendants’ joint and several conduct,” and concludes that “all defendants were active participants in the illegal behavior,” (e.g., SAC ¶¶ 50, 98), the only specific factual allegations concerning conduct in North Carolina name CSL—not Holding or any of the other Defendants—as the actor. (SAC ¶¶ 24-31, 34-38, 40-42, 45, 48, 49, 52, 54, 55, 59, 62.) In reality, Holding has no contacts with North Carolina, much less substantial contacts related to Plaintiff’s causes of action. Holding has no employees in North Carolina; has no offices in North Carolina; owns no real property or other assets in North Carolina; does not advertise in North Carolina; does not have any financial accounts in North Carolina; has never had any business dealings in North Carolina; does not pay taxes to North Carolina; is not registered to do business in North Carolina; and does not participate in the day-to-day operations of its indirect subsidiary, CSL. Ex. A ¶¶ 10–20. Holding was not involved with CSL’s alleged misrepresentations or other conduct or facts alleged in the Complaint. Ex. A ¶ 21. Plaintiffs do not specifically allege otherwise. (See SAC ¶ 100 (merely concluding that the Defendants’ “joint culpable conduct, as pled herein in this matters [sic] establishes as a matter of law that each defendant is responsible and culpable for the joint acts and omissions of the other defendants.” (emphasis added).) Thus, Plaintiffs have failed to carry their burden of showing that Holding is subject to specific personal jurisdiction in this Court. Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 7 of 14 8 IV. To the Extent Plaintiffs Seek to Pierce the Corporate Veil to Establish Personal Jurisdiction, They Have Not Alleged Sufficient Facts. The Plaintiffs have not alleged that Holding and CSL are alter egos. (See SAC ¶ 15, 18.) 4 Nor are their passing and factually unsupported allegations that Holding and Corporation jointly “controlled” CSL enough to impute CSL’s jurisdictional contacts to its corporate grandparent. Generally, “[t]he contacts of a corporate subsidiary cannot impute jurisdiction to its parent entity” unless the parent is improperly dominating the subsidiary. Saudi v. Northrop Grumman Corp., 427 F.3d 271, 276 (4th Cir. 2005); see also Mountain Funding, LLC v. Blackwater Crossing, LLC, 3:05 CV 513 MU, 2006 WL 1582403, at *3 (W.D.N.C. June 5, 2006) (holding that a business relationship alone is not enough to establish personal jurisdiction and that the plaintiff must show that each defendant has independent contacts); Ash, 80 N.C. App. at 462, 343 S.E.2d at 4 (“[I]f the subsidiary’s presence in the state is primarily for the purpose of carrying on its own business and the subsidiary has preserved some semblance of independence from the parent, jurisdiction over the parent may not be acquired on the basis of the local activities of the subsidiary.”) A “plaintiff carries a heaving burden when attempting to pierce the corporate veil to establish personal jurisdiction.” Avanti Hearth Products, LLC v. Janifast, Inc., No. 3:10-CV- 00019-FDW, 2010 WL 3081371, at *5 (W.D.N.C. Aug. 6, 2010); see also Am. Products & 4 Because Plaintiffs have not alleged veil-piercing, Holding does not address choice of law issues pertaining to corporate veil-piercing. See Richmond v. Indalex Inc., 308 F. Supp. 2d 648, 658 (M.D.N.C. 2004) (court “need not decide” whether North Carolina law or Delaware law applies to corporate veil- piercing, “because even assuming Delaware law would apply, Plaintiff’s veil-piercing claim would also fail under Delaware law”). Nevertheless, Holding does not waive the right to address choice of law issues at a later stage if necessary, see Dassault Falcon Jet Corp. v. Oberflex, Inc., 909 F. Supp. 345, 348 (M.D.N.C. 1995) (finding “that if the North Carolina Supreme Court were faced with a choice of law question for piercing the corporate veil, it would adopt the internal affairs doctrine and apply the law of the state of incorporation”), including the heightened standard of liability for members or managers of a limited liability company under Delaware law, see Del. Code Ann. tit. 6, § 18-303(a). Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 8 of 14 9 Holdings, LLC v. R.T.G. Furniture Corp., 825 F. Supp. 2d 664, 687 (M.D.N.C. 2011) (“When a plaintiff seeks personal jurisdiction based on the actions of an affiliate, it must make a showing approaching that necessary under traditional alter-ego analysis.”) Under North Carolina law, 5 a defendant qualifies as an alter ego of the sole or dominant shareholder only when the plaintiff establishes three elements: 1) Control, not mere majority or complete stock control, but complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; and 2) Such control must have been used by the defendant to commit fraud or wrong, to perpetrate the violation of a statutory or other positive legal duty, or a dishonest and unjust act in contravention of plaintiff’s legal rights; and 3) The aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of. Richmond v. Indalex Inc., 308 F. Supp. 2d 648, 656 (M.D.N.C. 2004) (quoting Glenn V. Wagner, 313 N.C. 450, 454-55, 329 S.E.2d 326, 330 (1985)). The court in Glenn further noted several factors relevant to determining whether a corporation is so dominated by its shareholders that there is sufficient control to satisfy the first element of the instrumentality rule: > inadequate capitalization; > failure to comply with corporate formalities; > complete domination and control of the corporation so that it has no independent identity; > excessive fragmentation of a single enterprise into separate corporations; > non-payment of dividends; > insolvency; siphoning of funds by the dominant shareholder; 5 “When determining whether a court has personal jurisdiction over a defendant based upon its qualifying as an alter ego of another defendant, authority suggests that the ‘Fourth Circuit applies the law of the forum state.’” Avanti Hearth Products, LLC, 2010 WL 3081371, at *4 n.2. Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 9 of 14 10 > non-functioning of other officers or directors; and absence of corporate records. Id. (internal citations & quotations omitted). “[T]hese are merely factors to be considered, not an exhaustive checklist for deciding whether to pierce the corporate veil.” Richmond, 308 F. Supp. 2d at 656. Plaintiffs have failed to allege any facts that would permit the Court to disregard Holding’s corporate form and impute CSL’s alleged jurisdictional contacts to Holding. First, Plaintiffs have not alleged sufficient facts to show that Holding had “complete domination, not only of finances, but of policy and business practice in respect to the transaction attacked” over CSL or InfiLaw Corporation, so as to show those entities had “no separate mind, will or existence” of their own. Plaintiffs merely allege in conclusory terms that Holding “routinely exercise[s] control, management functions and promotions of [CSL] such to be subject to personal jurisdiction of the court.” (SAC ¶ 18.) Simple, conclusory allegations that one defendant controls another defendant are insufficient to survive a motion to dismiss. See, e.g., Richmond, 308 F. Supp. 2d at 657 (granting Novar’s motion to dismiss, finding the allegations in plaintiff’s complaint insufficient to pierce the corporate veil, in part, because though plaintiff alleged Novar exercised control over Indalex, such allegations were insufficient to show Novar exercised “complete domination and control” over Indalex so that Indalex “had at the time no separate mind, will or existence of its own”). Moreover, Plaintiffs have not alleged and cannot accurately allege that Holding disregarded corporate formalities, was undercapitalized, failed to keep records, or any of the other indicia that a subsidiary is an “alter ego” of a parent company. In short, Plaintiffs have failed to allege specific facts to show how Holding allegedly exercised day-to-day domination and control over CSL or InfiLaw Corporation. See e.g., Richmond, 308 F. Supp. 2d at 657 (M.D.N.C. 2004) (holding that conclusory allegations of “control” are insufficient to show Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 10 of 14 11 Novar exercised “complete domination and control” and finding that plaintiff’s complaint also contained “no allegation that Indalex was a sham corporation”); State ex rel. Cooper v. Western Sky Financial, LLC, 2015 NCBC 84, ¶ 26-28, 2015 WL 5091229, at *5-*6 (N.C. Sup. Ct. Aug. 27, 2015) (granting individual defendant’s motion to dismiss for lack of personal jurisdiction where plaintiff, though alleging that the sole shareholder was significantly involved in directing the other company-defendants, failed adequately to allege facts to establish that he so dominated and controlled them that they lost their separate corporate identities); cf. Pan- American Products & Holdings, LLC v. R.T.G. Furniture Corp., 825 F. Supp. 2d 664, 688-89 (M.D.N.C. 2011) (finding plaintiff had failed to demonstrate personal jurisdiction over defendant but permitted limited jurisdictional discovery on its alter ego theory where plaintiff had alleged common ownership, common officers and employees, common advertising, common websites). Second, not only have Plaintiffs failed adequately to allege facts sufficient to meet the first element, Plaintiffs have completely ignored the other two elements required by Glenn. Thus, with respect to the second element, Plaintiffs offer no factual allegations that Holding “used” its control “to commit” the injuries Plaintiffs have alleged. See Richmond, 308 F. Supp. 2d at 656. Nor, with respect to the third element, do Plaintiffs allege any facts to show that the “control” proximately “caused the injury” complained of. Id. Finally, as noted above, the uncontroverted facts – as opposed to Plaintiffs’ conclusory allegations – establish that no such dominion and control exists. Here, among other things, Holding maintains its own financial accounts; holds independent corporate board meetings; keeps independent corporate records; and does not participate in the day-to-day operations of Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 11 of 14 12 Corporation or CSL. Ex. A ¶¶ 17-20. Under these circumstances, Plaintiffs cannot pierce CSL’s corporate veil in an attempt to obtain jurisdiction over its grandparent entity. CONCLUSION Holding must be dismissed because Plaintiffs have failed to show that it has “minimal contacts” that enable North Carolina to exercise jurisdiction under its long-arm statute and the Due Process Clause, and there is no factual basis to sue Holding for the claims asserted in this case. For these reasons, the Complaint should be dismissed against Holding. WHEREFORE, Defendant InfiLaw Holding, LLC respectfully requests that it be dismissed from the instant case. This the 21st day of April, 2017. WOMBLE CARLYLE SANDRIDGE & RICE A Limited Liability Partnership /s/ Sarah Motley Stone Debbie W. Harden, NCSB No. 10576 Sarah Motley Stone, NCSB No. 34117 One Wells Fargo Center, Suite 3500 301 South College Street Charlotte, North Carolina 28202-6037 Telephone: (704) 331-4943 Facsimile: (704) 338-7813 E-mail dharden@wcsr.com; sstone@wcsr.com Johnny W. Loper, NCSB No. 15533 555 Fayetteville Street, Suite 1100 PO Box 831 Raleigh, North Carolina 27601 Telephone: (919) 755-2116 Facsimile: (919) 755-6056 E-mail jloper@wcsr.com Attorneys for Defendants Charlotte School of Law, InfiLaw Corporation, and InfiLaw Holding, LLC COOLEY LLP /s/ David E. Mills____________________________ David Edward Mills (admitted Pro Hac Vice) Michael DeWayne Hays (admitted Pro Hac Vice) Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 12 of 14 13 COOLEY LLP 1299 Pennsylvania Ave., N.W., Suite 700 Washington, DC 20004-2400 Telephone: (202) 842-7800 Facsimile: (202) 842-7899 Email: dmills@cooley.com Email: mhays@cooley.com Attorneys for Defendants Charlotte School of Law, InfiLaw Corporation, and InfiLaw Holding, LLC Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 13 of 14 CERTIFICATE OF SERVICE I hereby certify that on April 21, 2017, I have electronically filed the foregoing MEMORANDUM OF INFILAW HOLDING, LLC IN SUPPORT OF MOTION TO DISMISS FOR LACK OF PERSONAL JURISDICTION with the Clerk of Court using CM/ECF, which will send notification of such filing to the following: Amanda A. Mingo Rawls, Scheer, Foster, Mingo & Culp 1011 E. Morehead Street, Suite 300 Charlotte, NC 28204 Email: amingo@rsfmlaw.com Brian Leighton Kinsley Daniel Ray Francis Crumley Roberts 2400 Freeman Mill Rd., Suite 200 Greensboro, NC 27406 Email: blkinsley@crumleyroberts.com, drfrancis@CrumleyRoberts.com Philip Bohrer Bohrer Brady, LLC 8712 Jefferson Highway, Suite B Baton Rouge, Louisiana 70809 Email: phil@bohrerbrady.com Robert E. Harrington, N.C. Bar No. 26967 Adam K. Doerr, N.C. Bar No. 37087 101 North Tryon Street, Suite 1900 Charlotte, NC 28246 Telephone: (704) 377-2536 Facsimile: (704) 378-4000 rharrington@robinsonbradshaw.com adoerr@robinsonbradshaw.com Peter L. Welsh William L. Roberts Prudential Tower, 800 Boylston Street Boston, MA 02199-3600 (617) 951-7865 (617) 951-7313 peter.welsh@ropesgray.com william.roberts@ropesgray.com Nicholas M. Berg 191 North Wacker Drive, 32nd Floor Chicago, IL 60606 (312) 845-1322 nicholas.berg@ropesgray.com /s/ Sarah Motley Stone Sarah Motley Stone Case 3:17-cv-00026-GCM Document 44-1 Filed 04/21/17 Page 14 of 14 EXHIBIT A Case 3:17-cv-00026-GCM Document 44-2 Filed 04/21/17 Page 1 of 4 Case 3:17-cv-00026-GCM Document 44-2 Filed 04/21/17 Page 2 of 4 Case 3:17-cv-00026-GCM Document 44-2 Filed 04/21/17 Page 3 of 4 Case 3:17-cv-00026-GCM Document 44-2 Filed 04/21/17 Page 4 of 4