Hearn v. Edgy Bees Inc.
| Decision Date | 26 May 2022 |
| Docket Number | GJH-21-2259 |
| Parties | VINCENT HEARN, Plaintiff, v. EDGY BEES INC., et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
In this action, Plaintiff Vincent Hearn brings breach of contract claims, Maryland wage claims, and discrimination claims against Defendants Edgy Bees Inc. and Adam Kaplan. ECF No. 1. Presently pending is Defendant Edgy Bee Inc.'s Partial Motion to Dismiss, ECF No. 13, and Defendant Kaplan's Motion to Dismiss, ECF No. 22. No hearing is necessary.[1] See Loc. R. 105.6 (D. Md. 2021). For the reasons stated below, the Court will grant both motions.
At the relevant time, Plaintiff Hearn was an Arizona resident. ECF No. 1 ¶ 1.[3] Defendant Edgy Bees Inc. is a Delaware corporation authorized to do business in Maryland as a foreign corporation. Id. ¶ 2. Edgy Bees' principal places of business are in Maryland and in Israel. Id. ¶ 4. Defendant Kaplan is a resident of Israel and, at the relevant time, the Chief Executive Officer of Edgy Bees. Id. ¶ 3.
Plaintiff is a United States Air Force retiree and Purple Heart recipient. Id. ¶ 7. Prior to his employment with Edgy Bees, Plaintiff had a civil career in federal contracting. See id. ¶¶ 11, 12. Plaintiff also had an expansive list of contacts at the Department of Defense and years of experience in government contract administration and management. Id. ¶ 18. Plaintiff applied for a position as a Business Development Director at Edgy Bees in September 2019. Id. ¶ 14. Plaintiff met with Defendant Kaplan in San Diego California, in October 2019 when Kaplan interviewed Plaintiff for the position. Id. ¶ 15. Plaintiff then flew to Israel to meet with additional Edgy Bees employees. Id. ¶ 16.
Plaintiff was hired effective November 1, 2019. Id.; see also ECF No. 1-1 (Offer Letter). Plaintiff and Defendants agreed to an Individualized Compensation Plan, which governed non-discretionary payment of commission based on contract proceeds. ECF No. 1 ¶ 20; see also ECF No. 1-2 (Individualized Compensation Plan). Plaintiff was also provided with the Sales Compensation Plan. Id. ¶ 23; see also ECF No. 1-3 (Sales Compensation Plan).[4]
In July 2020, because of Plaintiff's hard work and skills, Edgy Bees was awarded a $12 million government contract. Id. ¶¶ 33, 39, 42. However, despite this success, Plaintiff alleges that he was treated poorly compared with other employees. Id. ¶¶ 26, 27. Plaintiff alleges that Defendant Kaplan subjected him to verbal abuse, that Kaplan regularly called and texted him at odd hours, and that Kaplan denied Plaintiff's request to telework while on vacation when another employee was granted the same request. Id. ¶ 26. Plaintiff was not provided with a company credit card, causing him to incur substantial expenses while he waited for reimbursement. Id. ¶ 27. Plaintiff also alleges that Defendant Kaplan would frequently cancel meetings with him, id. ¶ 44, and that after employees were asked to defer wages, all other employees shortly returned to regular wages, while Plaintiff did not, id. ¶ 45. Plaintiff asserts that some of these actions were taken because of his race. Id. ¶¶ 79, 119. Plaintiff also discovered that Edgy Bees was violating various federal contractor regulations and its contract with the United States government. Id. ¶¶ 52, 62, 63, 66, 72.
Throughout the summer and fall of 2020, Plaintiff raised his discrimination and compliance concerns to other Edgy Bees employees and managers. Id. ¶¶ 50, 51, 66, 74. Edgy Bees was unresponsive to Plaintiff's concerns. Id. ¶ 67. A job posting with the description matching Plaintiff's position was posted in December 2020, and Edgy Bees hired a white employee. Id. ¶ 74. Plaintiff was further excluded from meetings, id., and when Plaintiff received commissions payments related to his contract work, the commissions were less than prescribed by agreement, id. ¶ 83.
Plaintiff was fired at Defendant Kaplan's direction on January 7, 2021. Id. ¶ 81. Edgy Bees did not provide a reason for the termination. Id. ¶ 82. At the time of termination, Plaintiff was working on several pending deals. Id. ¶ 86. Plaintiff was one of only two black employees at the company, and the other black employee was also terminated. Id. ¶¶ 79, 80. Edgy Bees also improperly eliminated 56 hours of Plaintiff's paid time off and has not paid Plaintiff his deferred wages. Id. ¶¶ 45, 83, 85.
Plaintiff filed the Complaint on September 2, 2021. ECF No. 1. Plaintiff brought claims asserting breach of contract, breach of implied good faith and fair dealing, quantum meruit, unjust enrichment, violation of Montgomery County Code § 27-19, and violation of the False Claims Act, 31 U.S.C. § 3730(h)(1), against Defendant Edgy Bees. See id. ¶¶ 94, 100, 107, 112, 141. Plaintiff also brought claims under the Maryland Wage Payment and Collection Law, Ann. Code of Maryland, Labor & Employment Article, § 3-501 et seq., violation of 42 U.S.C. § 1981 for discrimination on the basis of race and/or color, and violation of 42 U.S.C. § 1981 on the basis of retaliation against Defendants Edgy Bees and Kaplan. See id. ¶¶ 115, 119, 126.
Defendant Edgy Bees filed the Partial Motion to Dismiss on October 7, 2021. ECF No. 13. Edgy Bees asserts that Counts V (Maryland wage violations), VIII (Montgomery County code violations), and IX (False Claims Act retaliation) must be dismissed for failure to state a claim. Id. Defendant Kaplan filed a Motion to Quash Service and Dismiss the Complaint on October 27, 2021. ECF No. 22. Kaplan argues that service of process was improper, that the Court lacks personal jurisdiction over him, and that the Complaint fails to state a claim as to Count V against Kaplan. Id.
Defendants seek dismissal on multiple grounds and the Court will articulate the standards used to address each motion.
On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), a court “must accept as true all of the factual allegations contained in the complaint.” and must “draw all reasonable inferences [from those facts] in favor of the plaintiff.” E.I. du Pont de Nemours & Co. v. Kolon Indus., Inc., 637 F.3d 435, 440 (4th Cir. 2011) (citations and internal quotation marks omitted). To survive a motion to dismiss invoking Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, ‘to state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). The factual allegations must be more than “labels and conclusions . . . Factual allegations must be enough to raise a right to relief above the speculative level[.]” Twombly, 550 U.S. at 555. “[T]he pleading must contain something more . . . than . . . a statement of facts that merely creates a suspicion [of] a legally cognizable right of action”[.]” Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, 235-36 (3d ed. 2004)).
Defendants may also challenge the sufficiency of process under Fed.R.Civ.P. 12(b)(4). O'Meara v. Waters, 464 F.Supp.2d 474, 476 (D. Md. 2006). Following such a motion, Plaintiffs bear the burden of establishing the validity of service under Federal Rule of Civil Procedure 4. Id. The Fourth Circuit has provided that in cases where service of process has given a defendant actual notice of the claim against it, courts may adopt a liberal interpretation of Rule 4 and “uphold the jurisdiction of the court.” Karlsson v. Rabinowitz, 318 F.2d 666, 668 (4th Cir. 1963). While the “plain requirements for the means of effecting service of process may not be ignored, ” where the defendant has actual notice of the action, “every technical violation of the rule or failure of strict compliance may not invalidate the service of process.” Armco, Inc. v. Penrod-Stauffer Bldg Sys. Inc., 733 F.2d 1087, 1089 (4th Cir. 1984).
A motion to dismiss for lack of personal jurisdiction arises under Federal Rule of Civil Procedure 12(b)(2). “When a court's personal jurisdiction is properly challenged by a Rule 12(b)(2) motion, the jurisdictional question thus raised is one for the judge, with the burden on the plaintiff ultimately to prove the existence of a ground for jurisdiction by a preponderance of the evidence.” Combs v. Bakker, 886 F.2d 673, 676 (4th Cir. 1989) (citation omitted). Discovery and an evidentiary hearing are not required to resolve a motion under Rule 12(b)(2), however. See id. Rather, the Court may, in its discretion, address personal jurisdiction as a preliminary matter, ruling solely on the motion papers, supporting legal memoranda, affidavits, and the allegations in the complaint. Consulting Engineers Corp. v. Geometric Ltd., 561 F.3d 273, 276 (4th Cir. 2009). In such a circumstance, the plaintiff need only make “a prima facie showing of a sufficient jurisdictional basis to survive the jurisdictional challenge.” Consulting Engineers Corp., 561 F.3d at 276. “In deciding whether the plaintiff has made the requisite showing, the court must take all disputed facts and reasonable inferences in favor of the plaintiff.” Carefirst of Md., Inc. v. Carefirst Pregnancy Ctrs., Inc., 334 F.3d 390, 396 (4th Cir. 2003) (citing Mylan Labs. Inc. v. Akzo, N.V., 2 F.3d 56, 62 (4th Cir. 1993)).
III. DEFENDANT EDGY BEES INC.'S PARTIAL MOTION TO DISMISS
Defendant Edgy Bees has filed a Partial Motion to Dismiss seeking dismissal of Counts V (violation of the Maryland Wage Payment and Collection Law), VIII (violation of Montgomery Count Code), and IX (violation of the False Claims Act). See ECF No. 13. The...
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