Aura Light US Inc. v. LTF International LLC et al

Filing 20

MEMORANDUM OPINION. Signed by Judge George Levi Russell, III on 9/15/2016. (krs, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
AURA LIGHT US INC.,

:

Plaintiff,

:

v.

:

LTF INTERNATIONAL LLC, et al.

:

Defendants.

Civil Action No. GLR-15-3198

:

AURA LIGHT US INC.,

:

Plaintiff,

:

v.

:

LTF INTERNATIONAL LLC, et al.

:

Defendants.

Civil Action No. JFM-15-3200

:
MEMORANDUM OPINION

THIS

MATTER

is

before

the

Court

on

Defendants’,

LTF

International LLC (“LTF International”), LTF Lighting LLC (“LTF
Lighting”) (collectively, “LTF”), and Paul V. Palitti, Jr., Motions
and Supplemental Motions to Dismiss Complaint for Lack of SubjectMatter Jurisdiction (ECF Nos. 5, 10 GLR-15-3198; ECF Nos. 5, 20
JFM-15-3200).1

Also pending is Plaintiff’s, Aura Light US Inc.

(“Aura US”), Motion for Summary Judgment (ECF No. 11, JFM-15-3200).
The Motions are ripe for disposition.
1

No hearing is necessary.

Defendants’ Supplemental Motion to Dismiss Complaint for Lack
of Subject-Matter Jurisdiction in Aura Light US Inc. v. LTF
International LLC, No. GLR-15-3198 (D.Md. filed Oct. 20, 2015) is
styled as a “Supplemental Memorandum” in support of the Motion to
Dismiss Complaint for Lack of Subject-Matter Jurisdiction. (ECF
No. 10, GLR-15-3198). The parties agreed to treat the Supplemental
Memorandum as a motion. (ECF No. 13, GLR-15-3198).

See Local Rule 105.6 (D.Md. 2016).

For the reasons outlined below,

the Court will deny Defendants’ Motions and Supplemental Motions to
Dismiss.

The Court will also deny Aura Light’s Motion for Summary

Judgment without prejudice.
I.

BACKGROUND

Aura US, a Delaware corporation, markets and sells lighting
products throughout North and South America.
1, GLR-15-3198).
liability

(Compl. ¶ 2, ECF No.

Aura US is a subsidiary of a Swedish limited

company,

Aura

Light

International

AB

(“Aura

International”), which manufactures and resells lighting products
internationally.

(Id. ¶ 10).

LTF International and LTF Lighting

are Maryland limited liability companies that work as wholesale
distributors and resellers of light-emitting diode (LED) products
in North America.

(Id. ¶¶ 3, 4).

James Industry Group Co., Ltd.

(“James”), a Hong Kong corporation, manufactures most of the
lighting products that LTF sells.
management

services

including LTF.

for

an

(Id. ¶ 9).

umbrella

of

Palitti provides

affiliated

companies,

(Id. ¶ 5).

In January 2015, LTF introduced Aura US to James, and the
parties engaged in negotiations to create a new business venture
for the wholesale marketing, distribution, and sale of LED and
other lighting products to commercial customers throughout North
America.

(Id. ¶ 11).

Ultimately, the negotiations broke down, and

in May 2015, the parties elected not to proceed with the proposed
2

new business venture.

(Id. ¶ 12).

During the period when

negotiations were ongoing, however, Defendants submitted thirtyfour purchase orders to Aura US for specific lighting products.
(Id. ¶ 14; Compl. ¶ 14, ECF No. 1, GLR-15-3200).

Defendants have

either refused to accept delivery of or pay for approximately $9
million worth of lighting products that Aura US manufactured to
sell to Defendants under the purchase orders.

(Compl. ¶¶ 15, 21,

22, GLR-15-3198); (Compl. ¶¶ 15–18, ECF No. GLR-15-3200).
On October 20, 2015, Aura US initiated two breach-of-contract
actions against Defendants (the “Actions”).

See Aura Light US Inc.

v. LTF Int’l LLC, No. GLR-15-3198 (D.Md. filed Oct. 20, 2015); Aura
Light US Inc. v. LTF Int’l LLC, No. JFM-15-3200 (D.Md. filed Oct.
20, 2015) (“Aura II”).

On November 20, 2015, Defendants filed

Motions to Consolidate the Actions and Motions to Dismiss Complaint
for Lack of Subject-Matter Jurisdiction.
3198; ECF Nos. 4, 5, JFM-15-3200).

(ECF Nos. 4, 5, GLR-15-

Aura US filed Oppositions to

Defendants’ Motions to Consolidate and Motions to Dismiss on
December 4, 2015 (ECF Nos. 6, 7, GLR-15-3198; ECF Nos. 6, 7, JFM15-3200).

Defendants filed Replies in further support of their

Motions to Dismiss on December 21, 2015 (ECF No. 8, GLR-15-3198;
ECF No. 8, JFM-15-3200).

On December 28, 2015, Aura US filed a

Motion for Summary Judgment (ECF No. 11, JFM-15-3200).
On December 30, 2015, the Honorable J. Frederick Motz set a
February 29, 2016 deadline for jurisdictional discovery. (ECF No.
3

12,

JFM-15-3200).

On

March

28,

2016,

Defendants

filed

an

Opposition to Aura US’s Motion for Summary Judgment (ECF No. 22,
JFM-3200) and Supplemental Motions to Dismiss Complaint for Lack of
Subject-Matter Jurisdiction (ECF No. 10, GLR-15-3198; ECF No. 20,
JFM-15-3200).

Aura US filed Oppositions to the Supplemental Motion

to Dismiss on April 14, 2016.
27, JFM-15-3200).

(ECF No. 14, GLR-15-3198; ECF No.

On April 20, 2016, Aura US filed a Reply in

further support of its Motion for Summary Judgment.
JFM-15-3200).

(ECF No. 31,

On April 25, 2016, the Court granted Defendants’

Motions to Consolidate the Actions.
No. 32, JFM-15-3200).

(ECF No. 17, GLR-15-3198; ECF

Finally, on May 2, 2016, Defendants filed a

Reply in further support of their Supplemental Motions to Dismiss.
(ECF No. 19, GLR-15-3198).
II.
A.

DISCUSSION

Motions to Dismiss for Lack of Subject-Matter Jurisdiction
1.

Legal Standards

Federal Rule of Civil Procedure 12(b)(1) governs motions to
dismiss for lack of subject-matter jurisdiction.

A defendant

challenging a complaint under Rule 12(b)(1) may advance a “facial
challenge, asserting that the allegations in the complaint are
insufficient to establish subject matter jurisdiction, or a factual
challenge, asserting ‘that the jurisdictional allegations of the
complaint [are] not true.’”

Hasley v. Ward Mfg., LLC, No. RDB-13-

1607, 2014 WL 3368050, at *1 (D.Md. July 8, 2014) (alteration in
4

original) (quoting Kerns v. United States, 585 F.3d 187, 192 (4th
Cir. 2009)).
With a factual challenge, the plaintiff bears the burden of
proving the facts supporting subject matter jurisdiction by a
preponderance of the evidence.
F.3d

337,

plaintiff

347
has

(4th
met

Cir.

this

U.S. ex rel. Vuyyuru v. Jadhav, 555

2009).

burden,

In
the

determining
court

“is

whether

to

the

regard

the

pleadings’ allegations as mere evidence on the issue, and may
consider evidence outside the pleadings without converting the
proceeding to one for summary judgment.”

Richmond, Fredericksburg

& Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir.
1991) (citing Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982)).
Nevertheless, the Court applies “the standard applicable to a
motion for summary judgment, under which the nonmoving party must
set forth specific facts beyond the pleadings to show that a
genuine issue of material fact exists.”

Id. (citing Trentacosta v.

Frontier Pac. Aircraft Indus., Inc., 813 F.2d 1553, 1559 (9th Cir.
1987)).

The

movant

“should

prevail

only

if

the

material

jurisdictional facts are not in dispute and the [movant] is
entitled to prevail as a matter of law.”
813 F.2d at 1558).

Id. (citing Trentacosta,

Unlike under the summary judgment standard,

however, the Court is permitted to decide disputed issues of fact,
Kerns, 585 F.3d at 192, and weigh the evidence, Adams, 697 F.2d at
1219.
5

Under 28 U.S.C. § 1332(a)(1) (2012), district courts “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 different
States.”

The parties must be completely diverse, “meaning that ‘no

party shares common citizenship with any party on the other side.’”
Cunningham v. Twin City Fire Ins. Co, 669 F.Supp.2d 624, 627 (D.Md.
2009) (quoting Mayes v. Rapoport, 198 F.3d 457, 461 (4th Cir.
1999)).

The Court construes 28 U.S.C. § 1332 strictly and resolves

any doubts against federal jurisdiction.

Trans/Air Mfg. Corp. v.

Merson, 524 F.Supp.2d 718, 721 (D.Md. 2007) (citation omitted).
When determining whether there is diversity jurisdiction, the Court
considers the citizenship of the parties when the action commenced.
Athena Auto., Inc. v. DiGregorio, 166 F.3d 288, 290 (4th Cir.
1999).

For purposes of diversity jurisdiction, a corporation is a

citizen of every State in which it is incorporated or maintains its
principal place of business.

28 U.S.C. § 1332(c)(1).

There are two tests for determining where a corporation has
its principal place of business: the “nerve center test” and the
“place of operations test.”

Athena Auto., 166 F.3d at 290.

The

Court should apply the nerve center test “when a corporation
engages primarily in the ownership and management of geographically
diverse

investment

assets.”

Id.

The

nerve

center

test

is

particularly appropriate when a corporation acts as a holding
6

company or “passive investment vehicle.”

Merson, 524 F.Supp.2d at

722 (quoting Peterson v. Cooley, 142 F.3d 181, 184 (4th Cir.
1998)).

Under this test, a corporation’s principal place of

business is “that place where the corporation ‘makes the “home
office,” or place where the corporation’s officers direct, control,
and coordinate its activities.’” Id. (quoting Peterson v. Cooley,
142 F.3d 181, 184 (4th Cir. 1998).
Alternatively, when a corporation has “multiple centers of
manufacturing, purchasing, or sales,” the Court applies the “place
of operations test.”

Id. (quoting Peterson, 142 F.3d at 184).

Under this test, a corporation’s principal place of business is
“the place where the bulk of corporate activity takes place.”
(quoting Peterson, 142 F.3d at 184).
“relevant

considerations

include

Id.

In applying this test,

the

location(s)

of

the

corporation’s offices, personnel and tangible assets, as well as
the locus of its day-to-day operations.”
F.3d at 184–85).

Id. (citing Peterson, 142

Other relevant considerations include “the

location(s) where meetings are held, taxes are paid, and corporate
records are kept, in addition to the location that ‘the corporation
would consider its home.’”
2.

Id. (citation omitted).

Analysis

Aura US asserts the Court has diversity jurisdiction because
when Aura US commenced the Actions, its principal place of business
was in Irvine, California.

Defendants raise a factual challenge to
7

this assertion, contending Aura US’s principal place of business
was in Hunt Valley, Maryland, which defeats complete diversity
because Defendants are all citizens of Maryland.

Aura US has the

burden of proving the negative -- that at the time it commenced the
Actions in October 2015, Aura US’s principal place of business was
not in Maryland.
To assess whether Aura US has carried its burden, the Court
must determine which test to apply.

There is no evidence that Aura

US operates as a holding company or passive investment vehicle.
Aura

US

designs,

components.
15-3198).

manufactures,

markets,

and

sells

lighting

(See Jones Dep. 10, Feb. 18, 2016, ECF No. 10-6, GLRWhile Aura US manages all of its purchasing and sales

activities from only one location -- Irvine, California -- Aura US
warehouses

its

products

in

California,

Pennsylvania, Indiana, and Nevada.
No. 7-1); (Jones Dep. 41:16–18).

Texas,

Florida,

(See Jones Aff. ¶¶ 6, 8, ECF

Additionally, in April 2015, Aura

US signed an engagement letter with ClearView Consulting, Inc.
(“ClearView”), under which ClearView agreed to provide financial
and administrative services such as accounting, processing payroll,
and preparing tax returns.

(See ECF No. 15-4, GLR-15-3198).

ClearView performs these services out of its Hunt Valley, Maryland
office.
3198);

(See Elder Dep. 8, Feb. 23, 2016, ECF No. 15-2, GLR-15(Jones

Aff.

¶

13).

Accordingly,

8

because

Aura

US’s

operations span multiple locations, the Court will apply the place
of operations test.
Aura US presents an affidavit and deposition testimony from
Constance Jones, Aura US’s Vice President of North and South
America.

In October 2015, Jones was Aura US’s Director of North

America.

(Jones Dep. 9).

inception

in

early

2014.

Aura US has employed Jones since its
(Id.

at

19).

Aura

US

is

Aura

International’s first and only United States subsidiary, and Jones’
role has been to grow Aura US’s business.

(See id.).

As Aura US’s business began to expand, on September 1, 2015,
Aura Light moved its only United States office from Reno, Nevada to
Irvine, California.

(See Jones Dep. 37); (ECF No. 15-4).

By

October 2015, Jones was the only direct employee of Aura US in the
Irvine, California office, (Jones Dep. 26) and she performed all of
Aura US’ “day-to-day activities” from there, (id. at 41).

Some of

these activities included “sales and operations,” (Jones Dep. 41),
and soliciting and processing orders for lighting products, (Jones
Aff. ¶ 6).

Defendants present no evidence to dispute that Jones

performed these activities in California.
It is also undisputed that Aura US has never performed any of
the following activities in Maryland: held a corporate meeting,
maintained an office, employed anyone, paid taxes, or warehoused
its products.

(Jones Aff. ¶¶ 8–12); (Jones Dep. at 24).

What is

more, Aura US maintains all of its sales and operations records at
9

its Irvine, California office.

(Jones Aff. ¶ 6).

Aura US scans

and sends some of the sales records, such as invoices and bank
statements, to ClearView in Maryland so ClearView can perform its
recordkeeping duties.

(Jones Dep. 35).

But, Aura US maintains the

original copies of these documents in California.

(Id. 35, 36).

Aura US also presents uncontroverted deposition testimony from
James Elder, a designated representative of ClearView.

According

to Elder, Aura US performs some corporate activities in which
ClearView plays absolutely no part.

For instance, ClearView has

never taken an order for Aura US’s products because Jones takes all
the orders.

(Elder Dep. 120).

Elder further testified that in

almost every instance, ClearView only acts on behalf of Aura US
after Jones provides her express approval.

For example, ClearView

pays invoices on Aura US’s behalf, but ClearView doesn’t “pay
anything unless [Jones] says to pay it” because “everything has to
flow through her.”
payments to Aura

(Id. 119).

When it comes to invoices for

US, ClearView records the invoices “at the

direction of [Jones].”

(Id.

119–21).

Jones confirmed that

ClearView performs bookkeeping, accounting, and leasing “upon [her]
approval.”

(Jones Dep. 58).

Defendants rely heavily on an authorization letter in which
Aura International designated Elder and Michael Buher, also a
ClearView employee, as Acting Secretaries for the corporation.
(See

ECF

No.

15-5).

Elder

testified
10

the

purpose

of

the

authorization letter was merely to allow ClearView to become a
signatory at Aura International’s bank.

(Elder Dep. 69).

As

Defendants highlight, however, Elder did more than sign checks for
Aura US -- he also signed contracts on behalf of Aura US.

For

instance, Elder signed a contract to lease a Xerox machine, (id.
33), and he and Jones signed Aura US’s lease for the office space
in Irvine, California, (Jones Dep. at 59).

But, Elder only signed

agreements on behalf of Aura US with Jones’ approval.
32, 94); (Elder Dep. 75).

(Jones Dep.

Elder was not authorized to negotiate

contracts on behalf of Aura US. (Jones Dep. 32).
Although Elder’s designation as Acting Secretary might suggest
he worked as a corporate officer for Aura International, Elder has
never attended any of Aura International’s board meetings.

(Elder

Dep. 64).

(Jones

Dep.

Jones, however, has attended these meetings.

23–25).

Moreover,

Elder

had

no

insight

into

International’s or Aura US’s strategic plans or budgets.
Dep. 83).

Aura
(Elder

He described ClearView’s role as “record keepers” that

played “no part in strategy at all.”

(Id.).

Defendants also rely heavily Aura US’s corporate registration
documents in California and Maryland in which Aura US listed
ClearView’s Hunt Valley, Maryland address as Aura US’s address.
(See ECF Nos. 10-1, 10-2).
is misplaced.

Defendants’ reliance on these documents

As this Court explained in Merson, there is a

“fundamental difference” between the address a corporation uses on
11

its

corporate

registration

documents

and

principal place of business for purposes of
F.Supp.2d at 723.

the

corporation’s

28 U.S.C. § 1332.

524

Just like in Merson, this Court declines to

construe the act of providing an address for corporate registration
documents as an affirmation of corporate citizenship.
Based

on

the

foregoing

undisputed

evidence,

See id.
the

Court

concludes Aura US has shown by a preponderance of the evidence that
its principal place of business was not in Maryland when it
commenced the Actions.

At that time, Jones performed the bulk of

Aura US’s corporate activities and day-to-day operations in Irvine,
California.
F.3d

at

See Merson, 524 F.Supp.2d at 722 (citing Peterson, 142

184–85).

To

be

sure,

ClearView

provided

several

administrative services from its Hunt Valley, Maryland office, but
only

based

on

Jones’s

express

authorization

from

California.

Notwithstanding Elder’s designation as an Acting Secretary, he
neither attended board meetings nor participated in shaping Aura
US’s or Aura International’s corporate strategy.

As Elder put it,

he and ClearView were merely “record keepers.”

(Elder Dep. 83).

And,

without

Jones’

marketing,

sales,

and

other

operations

activities in California, there would have been no records for
ClearView

to

keep.

Furthermore,
are

not

Aura

Light’s

registration

documents

citizenship.

See Merson, 524 F.Supp.2d at 722.

12

affirmations

of

corporate
corporate

Accordingly, the

Court will deny Defendants’ Motions to Dismiss and Supplemental
Motions to Dismiss.
B.

Motion for Summary Judgment
1.

Standard of Review

In reviewing a motion for summary judgment, the Court views
the facts in a light most favorable to the nonmovant, drawing all
justifiable inferences in that party’s favor.

Ricci v. DeStefano,

557 U.S. 557, 586 (2009); Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986) (citing Adickes v. S.H. Kress & Co., 398 U.S. 144,
158–59 (1970)).

Summary judgment is proper when the movant

demonstrates, through “particular parts of materials in the record,
including
information,

depositions,
affidavits

documents,
or

electronically

declarations,

stipulations

stored
.

.

.

admissions, interrogatory answers, or other materials,” that “there
is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a),
(c)(1)(A).
Once a motion for summary judgment is properly made and
supported, the nonmovant has the burden of showing that a genuine
dispute of material fact exists.

Matsushita Elec. Indus. Co. v.

Zenith Radio Corp., 475 U.S. 574, 586–87 (1986).

If the nonmoving

party has failed to make a sufficient showing on an essential
element of her case where she has the burden of proof, “there can
be ‘no genuine [dispute] as to any material fact,’ since a complete
13

failure of proof concerning an essential element of the nonmoving
party’s case necessarily renders all other facts immaterial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986).
A “material fact” is one that might affect the outcome of a
party’s case.

Anderson, 477 U.S. at 248; see also JKC Holding Co.

v. Wash. Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001)
(citing Hooven-Lewis v. Caldera, 249 F.3d 259, 265 (4th Cir.
2001)).

Whether

a

fact

is

considered

to

be

“material”

is

determined by the substantive law, and “[o]nly disputes over facts
that might affect the outcome of the suit under the governing law
will properly preclude the entry of summary judgment.”
477 U.S. at 248; accord Hooven-Lewis, 249 F.3d at 265.

Anderson,
A “genuine”

dispute concerning a “material” fact arises when the evidence is
sufficient to allow a reasonable jury to return a verdict in the
nonmoving party’s favor.
2.

Anderson, 477 U.S. at 248.

Analysis

Aura US argues Aura II is a simple breach of contract case.
Aura US attaches fifteen purchase orders (the “Purchase Orders”)
signed by Palitti as manager of LTF International and sixteen
invoices (the “Invoices”) Aura US issued to Defendants.
Nos. 1-1, 1-2, GLR-15-3200).
Orders

and

Invoices

(See ECF

According to Aura US, the Purchase

demonstrate

Defendants

had

a

contractual

obligation to pay Aura US for the lighting products it acquired
from James and delivered to Defendants during the first few months
14

of 2015.

Aura US maintains Defendants breached this obligation

when they accepted delivery of the products but only paid for a
small portion of them.
Defendants respond that Aura II is anything but a simple
breach of contract case.

They argue the Court must construe the

Purchase Orders and Invoices in the context of the negotiations
between Aura US and Defendants regarding a potential joint venture.
According

to

Defendants,

executives

from

Aura

International

represented that Aura US would not collect on the purchase orders
because they were only necessary to encourage Aura International’s
board

of

directors

to

provide

funding

for

a

joint

venture.

Defendants relied on this representation and, as such, never agreed
to purchase James’ products from Aura US under the terms specified
in the Purchase Orders and Invoices.

Specifically, Defendants

never agreed to Aura’s mark-up prices, shipping charges, or payment
terms of “Net 30.”
maintain

that

(See ECF No. 1-2).

without

discovery,

they

Further, Defendants
cannot

present

facts

essential to their opposition.
As a general matter, “summary judgment is appropriate only
after ‘adequate time for discovery.’”

Greater Balt. Ctr. for

Pregnancy Concerns, Inc. v. Mayor of Balt., 721 F.3d 264, 280 (4th
Cir. 2013) (quoting Evans v. Techs. Applications & Serv. Co., 80
F.3d 954, 961 (4th Cir. 1996)); see Harrods Ltd. v. Sixty Internet
Domain Names, 302 F.3d 214, 244 (4th Cir. 2002)
15

(“[S]ummary

judgment [must] be refused where the nonmoving party has not had
the opportunity to discover information that is essential to his
opposition.” (quoting Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 250 n.5 (1986))).
“cannot

complain

A party opposing summary judgment, however,

that

summary

judgment

was

granted

without

discovery unless that party had made an attempt to oppose the
motion on the grounds that more time was needed for discovery.”
Harrods Ltd. v. Sixty Internet Domain Names, 302 F.3d 214, 244 (4th
Cir. 2002) (quoting Evans, 80 F.3d at 961).
Parties typically satisfy the requirement to specify their
need

for

discovery

by

submitting

declaration. Rule 56(d)

a

Rule

56(d)

affidavit

or

provides that the Court may deny or

continue a motion for summary judgment “[i]f a nonmovant shows by
affidavit or declaration that, for specified reasons, it cannot
present facts essential to justify its opposition.”

“[T]he failure

to file an affidavit under Rule 56[(d)] is itself sufficient
grounds to reject a claim that the opportunity for discovery was
inadequate.”

Nguyen v. CNA Corp., 44 F.3d 234, 242 (4th Cir. 1995)

(quoting Paddington Partners v. Bouchard, 34 F.3d 1132, 1137 (2d
Cir. 1994)).

Importantly, “Rule 56(d) affidavits may not demand

discovery for discovery’s sake; a Rule 56(d) request is properly
denied ‘where the additional evidence sought . . . would not have
by itself created a genuine issue of material fact sufficient to
defeat summary judgment.’”

Gardner v. United States, No. JKB-1516

2874, 2016 WL 2594826, at *4 (D.Md. May 4, 2016) (quoting Strag v.
Bd. of Trs., 55 F.3d 943, 954 (4th Cir. 1995)).
Here, Defendants submit a Rule 56(d) affidavit from James R.
Deveney, III, a member of LTF.

(See ECF No. 22-2, GLR-15-3200).

Before determining whether the evidence Defendants seek to discover
could create a genuine dispute of material fact, the Court must
briefly review the substantive law surrounding contract formation
to help identify material facts.
The Court applies the substantive law of Maryland because Aura
US’s breach of contract action arose in Maryland.

Nationwide Mut.

Ins. Co. v. Welker, 792 F.Supp. 433, 437 (D.Md. 1992) (citing Erie
R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)).

Under Maryland law,

“[t]o prevail in an action for breach of contract, a plaintiff must
prove

that

the

defendant

owed

the

plaintiff

a

contractual

obligation and that the defendant breached that obligation.” Taylor
v. NationsBank, N.A., 776 A.2d 645, 651 (Md. 2001).
contractual obligation requires mutual assent.
Norkunas, 919 A.2d 700, 708 (Md. 2007).

Creating a

See Cochran v.

There are two elements of

mutual assent: “(1) intent to be bound, and (2) definiteness of
terms.”

Id.

“Failure of parties to agree on an essential term of

a contract may indicate that the mutual assent required to make a
contract is lacking.”

Id.

Defendants argue they neither agreed to acquire products from
James through the Purchase Order nor accepted the terms of the
17

Invoices.

In his affidavit, Deveney explains that to support these

defenses,

Defendants

seek

discovery

regarding

communications

between Defendants and Aura US’s and Aura International’s corporate
officers and board members

related to how the parties would

structure their arrangement with James.
3200).

(ECF No. 22-2, JFM-15-

Deveney asserts that the agreements the parties drafted for

participation in the joint venture were often inconsistent with
Defendants’ expectations because while acting as an intermediary
between Aura International and Defendants during the negotiations,
Jones communicated different information to Defendants and Aura
International.

(Id.).

Deveney identifies Martin Malmros, Chief

Executive Officer and Group President of Aura International, as one
of the officers from whom Defendants seek discovery.

(Id.).

Deveney maintains Malmros told Defendants that the Purchase Orders
were only necessary to convince the Aura International board to
fund a joint venture between Aura US and Defendants.

(Id.).

Because the discovery Defendants seek is relevant to whether
there was mutual assent for the Purchase Orders and Invoices, the
Court concludes it could “create[] a genuine issue of material fact
sufficient to defeat summary judgment.’”
at *4 (quoting Strag, 55 F.3d at 954).

Gardner, 2016 WL 2594826,

Accordingly, the Court will

deny Aura US’s Motion for Summary Judgment without prejudice and
enter a scheduling order so the parties can pursue discovery.

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III. CONCLUSION
For the foregoing reasons, Defendants’ Motions to Dismiss
Complaint for Lack of Subject-Matter Jurisdiction (ECF No. 5, GLR15-3198; ECF No. 5, JFM-15-3200) and Supplemental Motions to
Dismiss Complaint for Lack of Subject-Matter Jurisdiction (ECF No.
10, GLR-15-3198; ECF No. 20, JFM-15-3200) are DENIED.

Aura Light’s

Motion for Summary Judgment (ECF No. 11, JFM-15-3200) is DENIED
WITHOUT PREJUDICE.

The Court will issue a scheduling order.

separate Order follows.
Entered this 15th day of September, 2016
/s/
____________________________
George L. Russell, III
United States District Judge

19

A