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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

RHEUMATOLOGY NURSES SOCIETY, INC., et al.

: : v. : CIVIL NO. CCB-08-1675 : PHOENIX GROUP HOLDINGS, LLC, et al. : ...o0o... MEMORANDUM Now pending is a motion to dismiss or, in the alternative, to transfer venue filed by defendants Phoenix Group Holdings, LLC ("Phoenix"), Scius, LLC ("Scius"), and Tracy Doyle ("Doyle") (together "defendants") against plaintiffs Rheumatology Nurses Society, Inc. ("RNSI") and Rheumatology Nurses Society Foundation ("RNSF") (together "plaintiffs"). The plaintiffs allege various federal and state causes of action arising from their relationship with the defendants. The defendants contend that the court does not have jurisdiction over them and that venue is improper. The issues in this motion have been fully briefed and no hearing is necessary. For the reasons stated below, the defendants' motion will be granted, and the court will transfer venue to the District of New Jersey.

BACKGROUND This dispute arises from the formation of a professional association, RNSI, and its offshoot foundation, RNSF. Both organizations were formed by a group of rheumatology nurses, with the assistance of the defendants. Defendant Phoenix is a holding company that operates solely to provide administrative support to its subsidiaries. Scius, a Phoenix subsidiary, develops continuing medical education programs for medical professionals and related professional 1

organizations. During the events at issue in this litigation, Doyle was the chief executive officer of Phoenix and, according to plaintiffs, an officer of Scius. Phoenix and Scius are both New Jersey corporations, and Doyle is a citizen of New Jersey. The parties' relationship began in March 2006 when the nurses met Doyle at a nursing conference in Boston and discussed the formation of a professional association for rheumatology nurses. Following the conference, Doyle offered the assistance of Phoenix in the formation and management of the organization. After several months of collaboration, RNSI was incorporated in January 2007. During the summer of 2007, Doyle traveled to Maryland on three occasions to meet with representatives and pursue funding opportunities for the organization. In September 2007, RNSF was formed to seek grant funds from pharmaceutical companies to assist in the continuing education of rheumatology nurses. Both RNSI and RNSF are New Jersey entities. Soon after the formation of the organizations, the parties' relationship began to deteriorate. According to the plaintiffs, the defendants improperly claimed ownership of and distributed an educational tool that RNSI developed for rheumatology nurses, improperly listed themselves as the owners of the RNSI website, and submitted vague and exorbitant reimbursement requests for their management and consulting services. Additionally, the plaintiffs claim that in November 2007 Scius submitted grant requests to various pharmaceutical companies on the plaintiffs' letterhead without their knowledge or consent. These grant requests were submitted jointly with the Institute of Johns Hopkins Nursing ("IJHN"), a Maryland entity, which received the grant funds and disbursed over one million dollars in grant monies to Scius. The plaintiffs allege that Scius improperly retained those funds. In May 2008, the plaintiffs severed their relationship with the defendants. Thereafter, the

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plaintiffs contend that the defendants improperly shut down their website and retained their mail and other property, which caused the plaintiffs considerable expense in planning their annual conference. On June 25, 2008, the plaintiffs filed suit in this court alleging eleven counts of misconduct by the defendants. On August 13, 2008, the defendants filed a motion to dismiss for lack of personal jurisdiction and improper venue, or in the alternative, to transfer venue to the District of New Jersey.

ANALYSIS When defendants challenge personal jurisdiction under Rule 12(b)(2), the burden is on the plaintiffs to prove grounds for personal jurisdiction over them by a preponderance of the evidence. Mylan Labs., Inc. v. Akzo, NV, 2 F.3d 56, 59-60 (4th Cir. 1993). "When, however, as here, a district court decides a pretrial personal jurisdiction motion without conducting an evidentiary hearing, the plaintiff need only make a prima facie showing of personal jurisdiction." Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (citing Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989)). In deciding whether the plaintiff has made this showing, the court must resolve all disputed facts and reasonable inferences in the plaintiff's favor. Id. The court may assert either specific or general personal jurisdiction over non-resident defendants. Specific jurisdiction may exist where the claim is related to or arises out of the defendants' contacts with the state. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 414 & n. 8 (1984). General jurisdiction may exist where the defendants' contact with the forum state is "continuous and systematic." Id. at 414-15 & n. 9 (quoting Perkins v. Benguet

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Consol. Mining Co., 342 U.S. 437, 438 (1952)). The plaintiffs contend that the court has general and specific personal jurisdiction over the defendants. The court must perform a two-step inquiry to determine whether it may exercise personal jurisdiction over a defendant. First, the court must determine if jurisdiction is authorized under the long-arm statute of the forum state. See Carefirst, 334 F.3d at 396; Christian Sci. Bd. of Dirs. of First Church of Christ, Scientist v. Nolan, 259 F.3d 209, 215 (4th Cir. 2001). Second, the court must decide whether personal jurisdiction comports with Fourteenth Amendment due process requirements. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980). The Maryland Court of Appeals has held that Maryland's long-arm statute is co-extensive with the scope of jurisdiction permitted by the Fourteenth Amendment due process clause, and so the statutory and constitutional inquiries merge. See Carefirst, 334 F.3d at 396-97. The Maryland long-arm statute, however, restricts specific jurisdiction to cases where the cause of action "aris[es] from any act enumerated" in the statute itself. Md. Code Ann., Cts. & Jud. Proc.

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Maryland Law