Galloway v. Martorello, Civil Action 3:19-cv-314

• Court: United States District Courts. 4th Circuit. United States District Court (Eastern District of Virginia)
• Parties: Renee Galloway et al., Plaintiffs, v. Justin Martorello, et al., Defendants.
• Docket Number: Civil Action 3:19-cv-314
• Decision Date: 29 November 2022

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Renee Galloway et al., Plaintiffs,
v.
Justin Martorello, et al., Defendants.

Civil Action No. 3:19-cv-314

United States District Court, E.D. Virginia, Richmond Division

November 29, 2022

MEMORANDUM OPINION

ROBERT E. PAYNE, SENIOR UNITED STATES DISTRICT JUDGE

Having considered REBECCA MARTORELLO'S MOTION TO DISMISS PLAINTIFFS' COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) (ECF No. 413) and the accompanying briefs (ECF Nos. 414, 426, & 460) and EVENTIDE CREDIT ACQUISITIONS, LLC'S MOTION TO DISMISS PLAINTIFFS' COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) (ECF No. 415) and the accompanying briefs (ECF Nos. 416, 427, & 459), and for the reasons set forth below, REBECCA MARTORELLO'S MOTION TO DISMISS PLAINTIFFS' COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) (ECF No. 413) and EVENTIDE CREDIT ACQUISITIONS, LLC'S MOTION TO DISMISS PLAINTIFFS' COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(2) (ECF No. 415) will be denied.

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STATEMENT OF FACTS

This case comes out of a long series of litigation concerning Matt Martorello and his short-term loan schemes. Compl. ¶ 1, 11 (ECF No. 1). Matt Martorello allegedly engaged in a "rent-a-tribe" scheme in order to make usurious short-term loans with interest rates in the triple digits. Id. at ¶¶ 1, 6. This scheme is alleged to have targeted and affected consumers throughout the United States, including in Virginia. Id. at ¶¶ 22-45.^[1]

Rebecca Martorello is Matt Martorello's wife and a resident of Texas. Compl. ¶ 51. She is alleged to have been at all relevant times an employee of one of her husband's numerous companies, Bellicose, and allegedly "assisted her husband with the conspiracy to collect high-interest loans from consumers." Id.

Eventide is a limited liability corporation formed under Delaware's laws. Compl. ¶ 50. It is alleged that Matt Martorello and others formed Eventide as part of a larger corporate restructuring in an effort to hide allegedly ill-begotten profits. Id. It is plausibly alleged that Eventide was a key part of the alleged conspiracy of which it, Rebecca and Matt Martorello, and others are members.

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Rebecca Martorello and Eventide seek to have the case against them dismissed because, in their view, this Court lacks personal jurisdiction over them.

LEGAL STANDARD

Defendants both filed motions to dismiss pursuant to Rule 12(b)(2), which allows for dismissal for "lack of personal jurisdiction." Fed.R.Civ.P. R. 12(b)(2). The exercise of personal jurisdiction must be statutorily authorized, and the statutory authorization must be constitutional.

Plaintiffs have the burden of proving "grounds for jurisdiction by a preponderance of the evidence." Carefirst of Md., Inc, v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003). However, where, as here, the motion to dismiss for want of personal jurisdiction is presented for determination without an evidentiary hearing "the plaintiff need only make a prima facie showing of personal jurisdiction." Id. When conducting this analysis, "the court must take all disputed facts and reasonable inferences in favor of the plaintiff." Id.

Statutory Authorization

Rule 4 (k) provides the proper grounds for federal court personal jurisdiction. Under Rule 4(k)(1)(C), personal jurisdiction is established by the proper service of summons or filing a waiver of service "when authorized by a federal statute." Fed.R.Civ.P. Rule 4(k)(1)(C). Plaintiffs argue that

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there is personal jurisdiction under Rule 4 (k) (1) (C) and that the Racketeer Influenced and Corrupt Organizations Act ("RICO") provides the necessary statutory authorization of service.

To satisfy Rule 4 (k) (1) (C), Plaintiffs must show that they properly served process in accordance with RICO which contains a nation-wide service of process provision. It reads:

All other process in any action or proceeding under this chapter may be served on any person in any judicial district in which such person resides, is found, has an agent, or transacts his affairs

18 U.S.C. § 1965(d).

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