J&J Sports Productions, Inc. v. Out In The Cold, Inc., et al

Filing 7

ORDER AND REASONS denying 5 Motion to Dismiss Party. Signed by Judge Martin L.C. Feldman on 7/11/2018. (clc)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA

J&J SPORTS PRODUCTION, INC.

CIVIL ACTION

v.

NO. 18-4407

OUT IN THE COLD, INC.,
KEVIN J. LEE, SR. AND GARY
C. HERTY

SECTION "F"

ORDER AND REASONS
Before the Court is the defendants’ motion to dismiss. For
the following reasons, the motion is DENIED.
Background
J&J Sports Productions, Inc. is a distributor of closed
circuit pay-per-view boxing and special events. It received the
exclusive nationwide commercial distribution and broadcast rights
to a boxing fight between Floyd Mayweather and Manny Pacquiao that
took place on May 2, 2015. Out in the Cold, Inc., doing business
as Pete’s Out in the Cold, is a Louisiana Corporation owned by
Kevin Lee and Gary Herty. Pete’s Out in the Cold is a bar in New
Orleans. On April 28, 2018, J&J sued Out in the Cold, Lee, and
Herty, alleging that they unlawfully broadcast the boxing fight at
Pete’s without permission or paying the sublicense fee. On June
20, 2018, the defendants moved to dismiss the complaint on the
basis that it is procedurally time barred.

1

I.
Rule 12(b)(6) of the Federal Rules of Civil Procedure allows
a party to move for dismissal of a complaint for failure to state
a claim upon which relief can be granted. Such a motion is rarely
granted because it is viewed with disfavor. See Lowrey v. Tex. A
& M Univ. Sys., 117 F.3d 242, 247 (5th Cir. 1997)(quoting Kaiser
Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d
1045, 1050 (5th Cir. 1982)).
Under Rule 8(a)(2) of the Federal Rules of Civil Procedure,
a pleading must contain a "short and plain statement of the claim
showing that the pleader is entitled to relief." Ashcroft v. Iqbal,
556 U.S. 662, 678-79 (2009)(citing Fed. R. Civ. P. 8). "[T]he
pleading standard Rule 8 announces does not require 'detailed
factual allegations,' but it demands more than an unadorned, thedefendant-unlawfully-harmed-me accusation." Id. at 678 (citing
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).
In considering a Rule 12(b)(6) motion, the Court “accept[s]
all well-pleaded facts as true and view[s] all facts in the light
most favorable to the plaintiff.” See Thompson v. City of Waco,
Texas, 764 F.3d 500, 502 (5th Cir. 2014) (citing Doe ex rel. Magee
v. Covington Cnty. Sch. Dist. ex rel. Keys, 675 F.3d 849, 854 (5th
Cir.

2012)(en

banc)).

But,

in

deciding

whether

dismissal

is

warranted, the Court will not accept as true legal conclusions.
Id. at 502-03 (citing Iqbal, 556 U.S. at 678).
2

To survive dismissal, “‘a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that
is plausible on its face.’” Gonzalez v. Kay, 577 F.3d 600, 603
(5th Cir. 2009)(quoting Iqbal, 556 U.S. at 678)(internal quotation
marks omitted). “Factual allegations must be enough to raise a
right to relief above the speculative level, on the assumption
that all the allegations in the complaint are true (even if
doubtful

in

fact).”

Twombly,

550

U.S.

at

555

(citations

and

footnote omitted). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw the
reasonable

inference

that

the

defendant

is

liable

for

the

misconduct alleged.” Iqbal, 556 U.S. at 678 (“The plausibility
standard is not akin to a ‘probability requirement,’ but it asks
for more than a sheer possibility that a defendant has acted
unlawfully.”). The Court’s task “is to determine whether the
plaintiff stated a legally cognizable claim that is plausible, not
to evaluate the plaintiff’s likelihood of success.” Thompson v.
City of Waco, Texas, 764 F.3d 500, 503 (5th Cir. 2014)(citation
omitted). This is a “context-specific task that requires the
reviewing court to draw on its judicial experience and common
sense.” Iqbal, 556 U.S. at 679. “Where a complaint pleads facts
that are merely consistent with a defendant’s liability, it stops
short

of

the

line

between

possibility

and

plausibility

of

entitlement to relief.” Id. at 678 (internal quotations omitted)
3

(citing Twombly, 550 U.S. at 557). “[A] plaintiff’s obligation to
provide the ‘grounds’ of his ‘entitle[ment] to relief’”, thus,
“requires

more

than

labels

and

conclusions,

and

a

formulaic

recitation of the elements of a cause of action will not do.”
Twombly,

550

U.S.

at

555

(alteration

in

original)

(citation

omitted).

II.
The

plaintiff

sued

under

two

statutes,

the

Federal

Communications Act, 47 U.S.C. § 151, et seq, and the Federal
Wiretap Act, 18 U.S.C. § 2510, et seq. Count 1 is brought under
Section 605 of the FCA, and Section 2511 in conjunction with
Section 2520 under the FWA. Count 2 is brought under Section 553
of the FCA. Section 605 of the FCA provides a private right of
action

for

the

interception

and

publishing

of

radio

communications. 47 U.S.C. § 605(a),(e)(3)(a). Sections 2511 and
2520

of

the

interception

FWA
or

provide
reception

a

private

for

any

right
wire,

of

action

oral,

or

for

the

electronic

communications. 18 U.S.C. §§ 2511, 2520. Lastly, Section 553(a)(1)
of the FCA provides a private right of action for intercepting or
receiving communications offered over a cable system. 47 U.S.C.
§ 553(a)(1). Two limitation periods are at play.

4

A.
The Fifth Circuit has held that the statute of limitations
for an action brought under 47 U.S.C. §§ 553 and 605 of the FCA is
three years. Prostar v. Massachi, 239 F.3d 669, 671 (5th Cir.
2001). Because the Federal Communications Act does not provide for
a limitations period, the Fifth Circuit has borrowed from the
Copyright Act. Id. It provides that “[n]o civil action shall be
maintained

under

the

provisions

of

this

title

unless

it

is

commenced within three years after the claim accrued.” 17 U.S.C.
§ 507(b). “A copyright claim . . . arises or accrues when an
infringing act occurs.” Petrella v. Metro-Goldwyn-Mayer, Inc., 134
S. Ct. 1962, 1969 (2014). A lawsuit under the FCA is commenced
when the complaint is filed. See id. at 1970. Because the alleged
interception occurred on May 2, 2015, the FCA infringement claim
“accrued” on May 2, 2015, starting the clock on the three-year
limitations period. Accordingly, the plaintiff was required to
commence the lawsuit by filing a complaint on or before May 2,
2018. The plaintiff did so, and filed the complaint on April 28,
2018. Because the plaintiff commenced the lawsuit before the
statute of limitations ran, the claims under Sections 605 and 553
of the FCA are not time barred. 1

1

The defendants contend that the Court should ignore binding Fifth
Circuit precedent, and instead embrace the holdings of other courts
of
appeals
that
apply
a
two-year
limitations
period.
Alternatively, the defendants suggest that the Court look to state
5

B.
It is less clear if the claims brought under Sections 2511
and 2520 of the Federal Wiretap Act are outside of the limitation
period. The Federal Wiretap Act provides that any person whose
wire,

oral,

or

electronic

communications

is

intercepted

must

commence a civil action no later “than two years after the date
upon which the claimant first has a reasonable opportunity to
discover the violation.” 18 U.S.C. § 2520 (emphasis added). Unlike
the limitation period for Sections 605 and 553 of the FCA, which
begins when the communication was illicitly intercepted regardless
of whether the plaintiff knew about it, the Federal Wiretap Act’s
limitation period begins when the plaintiff had the opportunity to
discovery the interception. The Fifth Circuit has held that this
“limitation period begins to run once the plaintiff has enough
notice as would lead a reasonable person to either sue or launch
an investigation.” Pringle v. Schleuter, 388 Fed. App’x 449, 450
(5th Cir. 2010).
The plaintiff sued the defendants nearly three years after
the defendants allegedly broadcast the plaintiff’s boxing program,
on April 28, 2018. If the plaintiff had a reasonable opportunity
to discover the alleged interception before April 28, 2016—two

law to determine the limitations period, despite the Fifth Circuit
explicit rejection of that analysis. In doing so, the defendants
fail to provide any reason as to why the Court should depart from
binding precedent. The Court declines the defendants’ invitation.
6

years

before

the

complaint

was

filed—then

the

complaint

was

untimely. However, if it did not have a reasonably opportunity to
discover the defendants’ conduct until April 28, 2016 or after,
the complaint was timely. The plaintiff does not allege when it
learned of the interception, 2 and it failed to address it in its
opposition. But a complaint can survive the pleading stages as
long as it does not affirmatively indicate that it is outside the
limitations period. Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th
Cir. 2003); Jaso v. Coca Cola Co., 435 Fed. Appx. 346, 351 (5th
Cir. 2011)(unpublished)(“[D]ismissal

for failure to state a claim

based on the statute of limitations defense should be granted only
when

the

plaintiff's

potential

rejoinder

to

the

affirmative

defense was foreclosed by the allegations in the complaint.”). If
J&J had alleged in the complaint that it learned of the defendants’
conduct before April 28, 2016, the Court would have grounds for
dismissal of the claims brought under Sections 2511 and 2520 of
the

FWA

because

they

would

be

outside

of

the

statute

of

limitations. But the Fifth Circuit has precluded the dismissal of
claims at the pleading stage merely because the plaintiff does not
affirmatively

plead

that

the

claim

is

within

the

statute

of

limitations. Jaso, 435 Fed. Appx. at 351.

2

The complaint does state that it had eyewitness accounts of the
illicit publication of its program, but provides no information as
to when it communicated with the witness.
7

Accordingly, IT IS ORDERED: that the defendants’ motion to
dismiss is DENIED. 3
New Orleans, Louisiana, July 11, 2018

_____________________________
MARTIN L. C. FELDMAN
UNITED STATES DISTRICT JUDGE

3

Both parties are advised to familiarize themselves with Louisiana
Ethics Rule 3.3 requiring parties to disclose controlling legal
authority known to be directly adverse to the party’s position.
8