Scallop Imaging, LLC v. Blackhawk Imaging LLC et al

Filing 52

Judge Allison D. Burroughs: MEMORANDUM AND ORDER entered. For the foregoing reasons, Visions motion to dismiss ECF No. 35 is DENIED. SO ORDERED. (McDonagh, Christina)

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
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SCALLOP IMAGING, LLC,
Plaintiff,
v.
BLACKHAWK IMAGING, LLC, and
VISION TECHNOLOGIES, INC.,
Defendants.

Civil Action No. 17-cv-10092-ADB

MEMORANDUM AND ORDER ON MOTION TO DISMISS
BURROUGHS, D.J.
In March 2015, Defendant Vision Technologies, Inc. (“Vision”) agreed to acquire
Plaintiff Scallop Imaging, LLC’s (“Scallop”) camera technology, but formed a subsidiary,
Defendant Blackhawk Imaging, LLC (“Blackhawk”), which ultimately purchased the assets from
Scallop. Blackhawk has since defaulted on numerous payments due under the purchase
agreement as well as several follow-on agreements between Scallop and Blackhawk. Scallop
asserts claims for breach of contract, unjust enrichment, and misrepresentation against
Blackhawk and seeks to pierce the corporate veil to hold Vision liable for Blackhawk’s acts and
omissions. [ECF No. 28] (“Amended Complaint”). Blackhawk answered the Amended
Complaint and admitted many of the allegations concerning its missed payments. [ECF No. 34]
(“Answer”). Currently pending before the Court is Vision’s motion to dismiss for lack of
personal jurisdiction, or, alternatively, for failure to state a claim. [ECF No. 35]. For the reasons
stated herein, the motion to dismiss is DENIED.
I.

BACKGROUND
Because Vision moves to dismiss for lack of personal jurisdiction, the following factual
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summary draws from “the pleadings and whatever supplemental filings (such as affidavits) are
contained in the record,” giving credence to Scallop’s version of the genuinely contested facts, as
well as from the undisputed facts proffered by Vision. Baskin-Robbins Franchising LLC v.
Alpenrose Dairy, Inc., 825 F.3d 28, 34 (1st Cir. 2016).
Vision (a Delaware corporation with its principal place of business in Arkansas) and
Scallop (a Massachusetts limited liability company with its principal place of business in
Massachusetts) both develop and/or distribute camera systems. Am. Compl. ¶¶ 7 9; [ECF Nos.
28-19]; [ECF No. 37 at ¶¶ 3, 5] (“Affidavit of Lee Thompson” or “Thompson Aff.”). In July
2014, Vision President Lee Thompson contacted Scallop Manager Olaf Krohg, and they entered
into an agreement whereby Vision became a distributor of Scallop’s products. Am. Compl. ¶ 17;
Thompson Aff. ¶ 5. In March 2015, after Scallop initiated a discussion with Vision, Vision and
Scallop signed a letter of intent memorializing a proposal for Vision to acquire substantially all
of Scallop’s assets. Thompson Aff. ¶ 5. Vision then formed a wholly-owned subsidiary,
Blackhawk (a Delaware limited liability company with its principal place of business in
Arkansas), for the purpose of entering into the transaction with Scallop. Id. ¶ 6; Am. Compl. ¶¶
8, 18. Following the formation of Blackhawk, (1) Vision’s Vice President, Chuck Thompson,
concurrently served as Blackhawk’s President and Chief Operating Officer; (2) Harvey Weiss,
who resigned from Vision’s board of directors when Blackhawk was formed, served as
Blackhawk’s Chief Executive Officer; and (3) Vision accountant John Uitz concurrently served
as Blackhawk’s Chief Financial Officer. Thompson Aff. ¶¶ 6 9. Vision President Lee Thompson
is also the father of Chuck Thompson. Id. ¶ 4.
On April 21, 2015, Blackhawk and Scallop entered into an Asset Purchase Agreement.
Am. Compl. ¶ 18. In exchange for acquiring substantially all of Scallop’s assets, Blackhawk

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executed two promissory notes representing a $700,000 loan made from Scallop to Blackhawk.
Id. The notes required Blackhawk to pay Scallop $100,000 on May 31, 2015 and $600,000 on
June 30, 2015. Id. Blackhawk also agreed under a separate note to pay Scallop an earnout
amount of $125,000. Id.; [ECF No. 32 at ¶ 3] (“Krohg Aff.”). As collateral for the loan,
Blackhawk granted Scallop a security interest in its assets and licensed to Scallop, on a royaltyfree basis, the intellectual property that Blackhawk acquired under the Asset Purchase
Agreement. Am. Compl. ¶ 18; Krohg Aff. ¶ 3.
Blackhawk defaulted on the payments due on May 31 and June 30, and never paid any of
the amounts owed to Scallop under those notes. Krohg Aff. ¶¶ 4 5. Less than one month after
Blackhawk failed to meet these payment obligations, Vision transferred 75% of its equity in
Blackhawk “to people affiliated with the company” as follows:
10% to Lee Thompson, President of Vision;
25% to Chuck Thompson, Vice President of Vision and President and COO of Blackhawk;
25% to Harvey Weiss, CEO of Blackhawk and former director of Vision;
5% to John Uitz, accountant at Vision and CFO of Blackhawk;
5% to William Bowen, Engineering Vice President at Vision; and
5% to Ki Pho Hong.
Thompson Aff. ¶ 11. Vision nonetheless continued to claim on its website that Blackhawk was a
wholly-owned subsidiary. Id.; Am. Compl. ¶ 55. Blackhawk also shared Vision’s office from its
formation in March 2015 until moving to a separate office in Arkansas in September 2016.
Thompson Aff. ¶ 13.
On October 26, 2015, Blackhawk and Scallop entered into a Forbearance Agreement,
wherein Blackhawk acknowledged that it had defaulted under the Asset Purchase Agreement and
was then required to pay the original $700,000, the $125,000 earnout, and an additional $10,000
to cover Scallop’s reasonable costs and expenses. Am. Compl. ¶ 20; Krohg Aff. ¶¶ 7 10. In
exchange, Scallop agreed to forbear from filing a lawsuit against Blackhawk or exercising its
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available remedies under the Asset Purchase Agreement. Am. Compl. ¶ 20; [ECF No. 28-1].
Over the next year, Blackhawk failed to make the required payments under the Forbearance
Agreement. Am. Compl. ¶ 23; Answer ¶ 3; Krohg Aff. ¶¶ 10 14.
In another attempt to facilitate the satisfaction of the debt, on October 20, 2016,
Blackhawk and Scallop entered into a Settlement Agreement, pursuant to which Blackhawk
promised to repay the debt in monthly installments of $88,000 to commence on November 15,
2016, $27,500 for interest, costs, expenses, and attorney’s fees, $1,320 as a late payment fee, and
0.05% daily interest on the outstanding principal of any late payments. Am. Compl. ¶ 24; Krohg
Aff. ¶¶ 15. Upon executing the Settlement Agreement, Blackhawk paid $12,500 to extend
Scallop’s forbearance from filing a lawsuit, and paid $15,000 to be applied to unpaid interest.
Am. Compl. ¶ 27; Krohg Aff. ¶ 18. After Blackhawk missed the first payment due on November
15, 2016, Vision’s President advised Scallop that he would contact Chuck Thompson and Weiss.
Am. Compl. ¶ 27; [ECF No. 28-14]. On December 21, 2016, Weiss stated the following in an
email to Krohg and Scallop’s lender, Silver Oaks Lending LLC:
Your patience with Vision and Blackhawk [is] appreciated and will increase the
probability of full and complete payment. Collectively, [Blackhawk] and [Vision]
are about to emerge from a large and protracted business development effort that
will begin producing [revenue on January 5th] . . . . That means there is sufficient
gross profit to pay our debt and all of the interest. The Companies [Vision and
Blackhawk] know they are late and they have a high degree of confidence of
success which is why they paid the first [$27,000] when we did . . . .
[ECF No. 28-15]. To date, Blackhawk has failed to make any other payments due under the
Settlement Agreement and, accordingly, owes Scallop $615,050, plus 18% interest per annum,
late fee charges of $2,640, and interest on the additional outstanding principal balance of
$15,991.30. Am. Compl. ¶ 29; Krohg Aff. ¶¶ 20 21.

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II.

DISCUSSION
Scallop contends that this Court may exercise personal jurisdiction over Vision, and

ultimately hold Vision liable for the damages caused by Blackhawk, by piercing the corporate
veil. Although the questions of jurisdiction and liability are ordinarily independent of one
another, “the factors that [the Court] must consider for purposes of piercing the veil separating
two corporations in the liability context also inform the jurisdictional inquiry.” Negron-Torres v.
Verizon Comm’s, Inc., 478 F.3d 19, 26 (1st Cir. 2007) (quoting United Elec. Workers v. 163
Pleasant St. Corp., 960 F.2d 1080, 1091 (1st Cir. 1992)). Given that Vision essentially raises the
same arguments with respect to jurisdiction and liability, and Blackhawk has conceded that it
defaulted under the underlying agreements, Scallop may plausibly state a claim against Vision at
this stage if it prevails on the jurisdictional question, although establishing jurisdiction by no
means suggests that “success on the merits is inevitable.” AngioDynamics, Inc. v. Biolitec, Inc.,
No. 09 30181, 2011 WL 3157312, at *6, 8 (D. Mass. July 25, 2011), aff’d, 780 F.3d 429 (1st
Cir. 2015).
Scallop bears the burden of establishing that personal jurisdiction over Vision lies in
Massachusetts. Baskin-Robbins, 825 F.3d at 34. “Faced with a motion to dismiss for lack of
personal jurisdiction, a district court ‘may choose from among several methods for determining
whether the plaintiff has met [its] burden.’” Adelson v. Hananel, 510 F.3d 43, 48 (1st Cir. 2007)
(quoting Daynard v. Ness, Motley, Loadholt, Richardson & Poole, P.A., 290 F.3d 42, 50–51 (1st
Cir. 2002)). Scallop and Vision agree that the Court should apply the prima facie standard, which
governs when “a district court rules on a motion to dismiss for lack of personal jurisdiction
without holding an evidentiary hearing.” United States v. Swiss Am. Bank, Ltd., 274 F.3d 610,
618 (1st Cir. 2001); see [ECF Nos. 35, 38]. The prima facie standard does not involve

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differential fact finding; rather, it requires “only that a plaintiff proffer evidence which, taken at
face value, suffices to show all facts essential to personal jurisdiction.” Baskin-Robbins, 825
F.3d at 34. The Court accepts “plaintiff’s properly documented evidentiary proffers as true . . .
and construe[s] them in the light most congenial to the plaintiff’s jurisdictional claim.” Daynard,
290 F.3d at 51. “If the plaintiff makes a prima facie showing of jurisdiction supported by specific
facts alleged in the pleadings, affidavits, and exhibits, its burden is met.” Ealing Corp. v. Harrods
Ltd., 790 F.2d 978, 979 (1st Cir. 1987).
There are two types of personal jurisdiction: general and specific. Harlow v. Children’s
Hosp., 432 F.3d 50, 57 (1st Cir. 2005). General jurisdiction exists “when the litigation is not
directly founded on the defendant’s forum-based contacts, but the defendant has nevertheless
engaged in continuous and systematic activity, unrelated to the suit, in the forum state.” United
Elec. Workers, 960 F.2d at 1088. In contrast, specific jurisdiction exists when “the cause of
action arises directly out of, or relates to, the defendant’s forum-based contacts.” Pritzker v. Yari,
42 F.3d 53, 60 (1st Cir. 1994) (quoting United Elec. Workers, 960 F.2d at 1088 89).
A.

General Jurisdiction

To exercise general jurisdiction over a corporate defendant, the Court must find its
contacts “so ‘continuous and systematic’ as to render [it] essentially at home” in the forum State.
Daimler AG v. Bauman, 134 S. Ct. 746, 758 n.11 (2014) (quoting Goodyear Dunlop Tires
Operations v. Brown, 564 U.S. 915 (2011)); see also Kipp v. Ski Enter. Corp. of Wis., 783 F.3d
695, 698 (7th Cir. 2015) (“In recent years, the Supreme Court has clarified and, it is fair to say,
raised the bar for [general] jurisdiction.”). The place of incorporation and principal place of
business are “paradigm bases for general jurisdiction.” Daimler, 134 S. Ct. at 757, 760. Although
there may be an “exceptional case” where general jurisdiction is appropriate in a state other than

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the state of incorporation or where the principal place of business is located, the Supreme Court
has not explained what circumstances would give rise to such an exceptional case. See Medici v.
Lifespan Corp., 239 F. Supp. 3d 355, 368 (D. Mass. 2017); Daimler, 134 S. Ct. at 761 n.19 (“A
corporation that operates in many places can scarcely be deemed at home in all of them.”).
Scallop does not contend that there is any basis for exercising general jurisdiction over
Blackhawk or Vision, and the record is devoid of any evidence that Vision or Blackhawk
engaged in continuous and systematic activity sufficient to find that either of them is “essentially
at home” in Massachusetts. Neither Vision nor Blackhawk is incorporated in Massachusetts or
has its principal place of business in Massachusetts. See Am. Compl. ¶¶ 8–9; Thompson Aff. ¶¶
2, 6, 13. At most, one Vision employee works remotely from Massachusetts, but Vision has
never maintained an office in Massachusetts. Thompson Aff. ¶ 2. In the absence of any evidence
of Vision or Blackhawk having continuous and systematic contact with Massachusetts, the Court
does not have general jurisdiction over Vision.
B.

Specific Jurisdiction

The exercise of specific jurisdiction “hinges on satisfaction of two requirements: first,
that the forum [state] has a long-arm statute that purports to grant jurisdiction over the defendant;
and second, that the exercise of jurisdiction pursuant to that statute comports with the strictures
of the Constitution.” Pritzker, 42 F.3d at 60. Because the First Circuit has generally treated “the
limits of Massachusetts’ long-arm statute as coextensive with those of the Due Process Clause,”
Copia Commc’ns, LLC v. AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016), the Court may
“sidestep the statutory inquiry and proceed directly to the constitutional analysis.” Evans Cabinet

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Corp. v. Kitchen Int’l, Inc., 593 F.3d 135, 146 (1st Cir. 2010); see Phillips v. Prairie Eye Ctr.,
530 F.3d 22, 26 (1st Cir. 2008).1
To determine whether it may exercise specific jurisdiction, the Court conducts a threepart inquiry:
First, the claim underlying the litigation must directly arise out of, or relate to,
the defendant’s forum state activities. Second, the defendant’s in-state contacts
must represent a purposeful availment of the privilege of conducting activities
in the forum state, thereby invoking the benefits and protections of that state’s
laws and making the defendant’s involuntary presence before the state’s court
foreseeable. Third, the exercise of jurisdiction must, in light of the Gestalt
factors, be reasonable.
Pritzker, 42 F.3d at 60 61 (quoting United Elec. Workers, 960 F.2d at 1089).
1.

Blackhawk

As an initial matter, Blackhawk consented to this Court’s jurisdiction pursuant to the
forum selection clause in the Forbearance Agreement and in the Settlement Agreement. “A party
to a contract may waive its right to challenge personal jurisdiction by consenting to personal
jurisdiction in a forum selection clause.” Inso Corp. v. Dekotek Handelsges, 999 F. Supp. 165,
166 (D. Mass. 1998) (citing M/S Bremen v. Zapata Off–Shore Co., 407 U.S. 1, 11 (1972)). The
Forbearance Agreement and Settlement Agreement provide that Blackhawk “irrevocably and
unconditionally consents to the exclusive jurisdiction” of the federal and state courts in
Massachusetts for the purpose of any litigation relating to or arising out of the relevant

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Although the Massachusetts long-arm statute “might impose more restrictive limits on the
exercise of personal jurisdiction than does the Constitution,” Copia Commc’ns, LLC v.
AMResorts, L.P., 812 F.3d 1, 4 (1st Cir. 2016), neither party has raised this issue here. See [ECF
Nos. 35, 38]. The Court will therefore proceed with the constitutional analysis. See, e.g., Katz v.
Spiniello Cos., 244 F. Supp. 3d 237, 244 (D. Mass. 2017); see also Bohnenberger v. MCBC
Hydra Boats, LLC, No. 16 11368, 2017 WL 3976566, at *4 n.8 (D. Mass. 2017) (collecting
similar cases).
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agreements between Scallop and Blackhawk. [ECF Nos. 28-1 at 11, 28-11 at 13 14]. Blackhawk
also admitted in its Answer that this Court had personal jurisdiction over it. Answer ¶ 14.
In addition to its admission and consent to jurisdiction, Blackhawk has other contacts
with Massachusetts that directly relate to this action. “In contract cases, a court charged with
determining the existence vel non of personal jurisdiction must look to the elements of the cause
of action and ask whether the defendant’s contacts with the forum were instrumental either in the
formation of the contract or in its breach.” Phillips Exeter Acad. v. Howard Phillips Fund, 196
F.3d 284, 289 (1st Cir. 1999). After entering into the Asset Purchase Agreement, Blackhawk
defaulted on payments due to Scallop, a Massachusetts limited liability company with its
principal place of business in Massachusetts. It then negotiated with Scallop for the Forbearance
Agreement to facilitate its repayment of the debts owed in exchange for Scallop agreeing not to
file a lawsuit in Massachusetts. Blackhawk breached the Forbearance Agreement, and to secure
Scallop’s continued forbearance from filing a lawsuit in Massachusetts, negotiated for the
Settlement Agreement, which Blackhawk also breached by failing to make the required
payments. The Court therefore has personal jurisdiction over Blackhawk based on its admission
that this Court has jurisdiction, and its conduct concerning the formation and breach of
agreements that named Massachusetts as the exclusive forum.
2.

Vision

Given that the Court plainly has jurisdiction over Blackhawk, Scallop seeks to impute
Blackhawk’s contacts with Massachusetts to Vision as its alter ego. “Since the essence of
personal jurisdiction is to bring responsible parties before the court, a corporation which is
actually responsible for its subsidiary’s decision to undertake instate activities should, in all
fairness, be within the state courts’ jurisdictional reach.” Donatelli v. Nat’l Hockey League, 893

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F.2d 459, 466 (1st Cir. 1990). “[O]nce minimum contacts can be attributed derivatively to the
parent, . . . all of the relevant secondary criteria (e.g., notice, foreseeability, reciprocity,
purposeful availment, and the other Gestalt factors) corroborate the appropriateness of an
exercise of jurisdiction.” Id. “[I]n the context of a parent-subsidiary relationship, the theory for
imputing contacts from one entity to another is a theory based on piercing the corporate veil.”
Katz v. Spiniello Cos., 244 F. Supp. 3d 237, 253 (D. Mass. 2017); see Harrelson v. Seung Heun
Lee, 798 F. Supp. 2d 310, 316 (D. Mass. 2011) (applying veil piercing principles to alter ego
theory of personal jurisdiction).
Because the underlying claims here are based in state law, state law principles guide the
analysis. See Katz, 244 F. Supp. 3d at 252; In re Lernout & Hauspie Sec. Lit., 337 F. Supp. 2d
298, 321 (D. Mass. 2004). The veil piercing standard in Massachusetts is “demanding,” as
corporations are presumed to be “separate and distinct entities notwithstanding [the]
relationships between them.” Scott v. NG U.S. 1, Inc., 881 N.E.2d 1125, 1131 (Mass. 2008).
Although the corporate veil “may be pierced only with reluctance and in extreme circumstances
when compelled by reasons of equity,” the Massachusetts Supreme Judicial Court has identified
two scenarios in which the corporate form may be disregarded. Lothrop v. North Am. Air
Charter, Inc., 95 F. Supp. 3d 90, 100 (D. Mass. 2015). “The first is when there is active and
direct participation by the representatives of one corporation, apparently exercising some form of
pervasive control, in the activities of another and there is some fraudulent or injurious
consequence of the inter-corporate relationship.” Id. (quoting My Bread Baking Co. v.
Cumberland Farms, Inc., 233 N.E.2d 748, 752 (Mass. 1968)). “The second is when there is a
confused intermingling of activity of two or more corporations engaged in a common enterprise
with substantial disregard of the separate nature of the corporate entities, or serious ambiguity

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about the manner and capacity in which the various corporations and their respective
representatives are acting.” Id. (quoting My Bread, 233 N.E.2d at 752). To determine whether to
pierce the corporate veil, courts holistically consider the following twelve factors:
(1) common ownership; (2) pervasive control; (3) confused intermingling of
business assets; (4) thin capitalization; (5) nonobservance of corporate formalities;
(6) absence of corporate records; (7) no payment of dividends; (8) insolvency at the
time of the litigated transaction; (9) siphoning away of corporation’s funds by
dominant shareholder; (10) nonfunctioning of officers and directors; (11) use of the
corporation for transactions of the dominant shareholders; and (12) use of the
corporation in promoting fraud.
Id. at 101 (quoting Att’y. Gen. v. M.C.K., Inc., 736 N.E.2d 373, 380 n.19 (Mass. 2000)).
Here, at least at the motion to dismiss stage, Scallop has set forth a sufficient basis for
exercising jurisdiction over Vision. The record shows that Vision and Scallop had an established
distribution relationship when they signed a letter of intent for Vision to purchase Scallop’s
assets, but that Vision formed Blackhawk, a wholly-owned subsidiary, for the specific purpose of
entering into the Asset Purchase Agreement. Blackhawk immediately defaulted on its payments
in May and June 2015. Shortly thereafter, Vision transferred 75% of its ownership interest to
various Vision and/or Blackhawk employees, although Vision’s website continued to advertise
Blackhawk as a wholly-owned subsidiary. Vision and two of its officers, Lee Thompson and
Chuck Thompson, together maintained a majority of the equity interest in Blackhawk. There is
also substantial overlap amongst the owners and officers of Blackhawk and Vision: Lee
Thompson is a 10% owner of Blackhawk and President of Vision; Chuck Thompson is a 25%
owner and President/COO of Blackhawk and Vice President of Vision; Harvey Weiss is a 25%
owner and CEO of Blackhawk and former director of Vision; John Uitz is a 5% owner and CFO
of Blackhawk and an accountant Vision; and William Bowen is a 5% owner of Blackhawk and
Engineering Vice President at Vision. Blackhawk also shared Vision’s office from its formation

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in March 2015 until September 2016. Further, both defendants sold some of the same products,
which employ the technology acquired from Scallop. [ECF Nos. 38-1, 38-4]; cf. Cabot Safety
Intermediate Corp. v. Arkon Safety Equip., Inc., 12 F. Supp. 2d 180, 182 (D. Mass. 1998)
(parent exercised pervasive control over subsidiary where there was exact overlap of key officers
and both parent and subsidiary sold same general type of equipment).
Beyond the commonality of corporate officers or ownership interests, which could be
characteristic of an ordinary parent and subsidiary relationship, the record sufficiently shows, at
least at this stage, that Vision used Blackhawk to promote fraud. Fraudulent behavior includes
“maintain[ing] the subsidiary to avoid a statutory responsibility, act[ing] in a blameworthy
manner, loot[ing] the subsidiary, or so undercapitalizing the subsidiary that the latter could not
reasonably have been expected to meet its obligations.” United Elec. Workers, 960 F.3d at 1093.
Here, Vision signed the letter of intent with Scallop to acquire its assets, specifically formed
Blackhawk to execute the transaction, but then left Blackhawk so vastly undercapitalized that it
has failed to pay $615,050 of the $825,000 owed, excluding interest. Cf. Birbara v. Locke, 99
F.3d 1233, 1241 (1st Cir. 1996) (holding that veil piercing was not justified where it was “not a
case involving a close corporation where the parent ‘form[s] a subsidiary with minimal
capitalization for the purpose of engaging in risky activities’ and where absolute limited liability
would create ‘incentives to engage in a socially excessive amount of risky activities’” (citing
Frank H. Easterbrook & Daniel R. Fischel, THE ECONOMIC STRUCTURE OF CORPORATE LAW 57
(1991))); Giuliano v. Nations Title, Inc., 938 F. Supp. 78, 82 (D. Mass. 1996) (“Where the
subsidiary is not a self-contained business operation, it may not have funds to cover the liabilities
that are associated with the total endeavor of which it is a part. A corporate entity could then
escape liability by limiting its presence in a state (or in the country) to undercapitalized

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‘subsidiaries’ provided with only minimum funds for their short-term operations”). Blackhawk
not only defaulted on payments due under the Asset Purchase Agreement, but over the course of
years, proceeded to negotiate for, and ultimately breach, at least two additional agreements
intended to satisfy the original debt owed on the assets that Vision formed Blackhawk to
purchase. Blackhawk’s December 2016 email to Scallop, stating that “[Blackhawk and Vision]
know they are late” on payments but that they had a “high degree of confidence” in meeting
future obligations, is additional evidence that Vision and Blackhawk presented themselves as
jointly responsible for the amounts due.
Taking the allegations and the evidence in the light most favorable to the non-moving
party, Vision brokered an asset acquisition deal with Scallop, then formed a wholly-owned
subsidiary to execute the purchase agreement, without any intention of properly funding it, and
ultimately reaped the benefits of Scallop’s technology while its subsidiary continually delayed
payment or legal consequences by representing to Scallop that it would satisfy the debt and pay
additional amounts if Scallop agreed to not file a lawsuit. Scallop has therefore met its burden to
establish jurisdiction over Vision as the alter ego of Blackhawk.2
III.

CONCLUSION
For the foregoing reasons, Vision’s motion to dismiss [ECF No. 35] is DENIED.
SO ORDERED.

March 22, 2018

/s/ Allison D. Burroughs
ALLISON D. BURROUGHS
U.S. DISTRICT JUDGE

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Because the prima facie standard accepts the evidence proffered at face value, Scallop retains
the “ultimate burden of conclusively establishing contested jurisdictional facts,” and Vision may
“renew its jurisdictional objection at a later stage.” Ortiz-Ildefonso v. SNC Technical Servs.,
LLC, No. 15 1197, 2016 WL 492767, at *3 & n.4 (D.P.R. Feb. 8, 2016) (applying prima facie
standard of personal jurisdiction to alter ego theory). Moreover, Scallop’s veil piercing theory
survives the motion to dismiss for failure to state a claim on the same grounds that jurisdiction
was deemed appropriate, but Vision may also renew its arguments on the merits at a later stage.
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