J&J Sports Productions, Inc. v. Pro Street Shop, LLC et al
Filing
20
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 7/22/2019. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
J&J SPORTS PRODUCTIONS, INC.
:
v.
:
Civil Action No. DKC 18-1000
:
PRO STREET SHOP, LLC, t/a
Pro Street Café, et al.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this case
involving alleged violations of the Communications Act of 1934 is
Defendants’ motion to dismiss. (ECF No. 17). The court now rules,
no hearing being deemed necessary.
Local Rule 105.6.
For the
following reasons, the motion will be denied in part and granted
in part.
I.
Background1
Plaintiff
J&J
Sports
Productions,
Inc.
alleges
that
Pro
Street Shop, LLC (“Pro Street”) and Randy Richardson, the managing
partner of Pro Street (collectively, “Defendants”), improperly
intercepted and broadcasted “‘The Fight of the Century’ Floyd
Mayweather, Jr. v. Manny Pacquiao Championship Fight Program”
(“the Program”).
Plaintiff purchased “the exclusive nationwide
commercial distribution (closed-circuit) rights” to the Program,
1
The following facts are set forth in the complaint and
construed in the light most favorable to the Plaintiff.
which aired on May 2, 2015.
the
distribution
rights,
(ECF No. 1 ¶ 15).
Plaintiff
entered
After purchasing
into
sublicensing
agreements with various commercial establishments to broadcast the
match.
(Id. ¶ 16).
Plaintiff did not enter into a sublicensing
agreement with Defendants. In an affidavit attached to Plaintiff’s
complaint, a private investigator declared that, on the evening of
the broadcast, she entered Defendants’ establishment in Lanham,
Maryland and observed the Program being shown to patrons on
multiple screens.
(ECF No. 1-1, at 4).
The investigator noted
that Defendants’ establishment had a capacity of “approximately
300 people” and found that there were over 100 people inside during
the broadcast.2
(Id.).
Plaintiff contends that Defendants “unlawfully intercept[ed]
.
.
.
[and]
displaye[ed]
the
Program
at
the
time
transmission at [Defendants’] commercial establishment.”
of
its
(ECF No.
1 ¶ 18). Additionally, Plaintiff alleges that Defendant Richardson
is liable because he either directed his employees to “unlawfully
intercept and broadcast” the Program or is vicariously liable for
his employees’ conduct because “he had an obvious and direct
financial interest” in the interception.
2
(Id. ¶ 10).
According to Plaintiff’s rate card, Plaintiff would have
charged Defendants $9,000 to broadcast the Program at a venue with
a capacity of 201-300 people. (ECF 1-1, at 7).
2
Plaintiff commenced this action on April 6, 2018, alleging
violations of the Communications Act of 1934, as amended, 47 U.S.C.
§§ 553 and 605.
(ECF No. 1).
Defendants filed a motion to dismiss
under Fed.R.Civ.P. 12(b)(6) on November 21, 2018, asserting that:
(1) the statute of limitations on Plaintiff’s claims has run; and
(2) Plaintiff fails to state a claim against Defendant Richardson.
(ECF No. 17). Plaintiff responded on December 5, 2018 (ECF No.
18), and Defendants replied on December 19, 2018 (ECF NO. 19).
II.
Standard of Review
The purpose of a motion to dismiss under Rule 12(b)(6) is to
test
the
sufficiency
of
the
complaint.
Presley
Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006).
v.
City
of
A plaintiff’s
complaint need only satisfy the standard of Rule 8(a), which
requires a “short and plain statement of the claim showing that
the pleader is entitled to relief.”
8(a)(2) still
assertion,
requires
of
a
entitlement
Fed.R.Civ.P. 8(a)(2).
‘showing,’
to
rather
relief.”
Twombly, 550 U.S. 544, 555 n.3 (2007).
than
Bell
a
Atl.
“Rule
blanket
Corp.
v.
That showing must consist
of more than “a formulaic recitation of the elements of a cause of
action”
or
enhancement.”
“naked
assertion[s]
Ashcroft
v.
devoid
Iqbal,
of
556
further
U.S.
factual
662,
678
(2009) (internal citations omitted).
At this stage, all well-pleaded allegations in a complaint
must be considered as true, Albright v. Oliver, 510 U.S. 266, 268
3
(1994), and all factual allegations must be construed in the light
most favorable to the plaintiff, see Harrison v. Westinghouse
Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999) (citing Mylan
Labs., Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993)).
In
evaluating the complaint, unsupported legal allegations need not
be accepted.
Revene v. Charles County Comm’rs, 882 F.2d 870, 873
(4th Cir. 1989).
are
Legal conclusions couched as factual allegations
insufficient, Iqbal,
factual
allegations
556
devoid
U.S.
at
of
any
678, as
are
reference
conclusory
to
actual
events, see United Black Firefighters v. Hirst, 604 F.2d 844, 847
(4th Cir. 1979).
“In deciding a Rule 12(b)(6) motion, the court
will consider the facts stated in the complaint and the documents
attached to the complaint.”
Abadian v. Lee, 117 F.Supp.2d 481,
485 (D.Md. 2000) (citing Biospherics, Inc. v. Forbes, Inc., 989
F.Supp. 748, 749 (D.Md. 1997), aff’d, 151 F.3d 180 (4th Cir. 1998)).
A motion to dismiss pursuant to 12(b)(6) does not generally
permit an analysis of potential defenses a defendant may have to
the asserted claims.
However, dismissal may be appropriate when
a meritorious affirmative defense is clear from the face of the
complaint.
Brooks v. City of Winston–Salem, 85 F.3d 178, 181 (4th
Cir. 1996) (citing Richmond, Fredericksburg & Potomac R.R. Co. v.
Forst, 250 (4th Cir. 1993)).
“The statute of limitations is an
affirmative defense that should only be employed to dismiss claims
pursuant to Rule 12(b)(6) when it is clear from the face of the
4
complaint that the claims are time barred.”
Long v. Welch & Rushe,
Inc., 28 F.Supp.3d 446, 456 (D.Md. 2014) (citations omitted); see
also 5A Charles A. Wright & Arthur R. Miller, Federal Practice &
Procedure § 1357, at 352 (3d ed. 2019) (“A complaint showing that
the governing statute of limitations has run on the plaintiff’s
claim
for
relief
affirmative
is
defense
the
most
appears
common
on
the
situation
face
of
the
in
which
the
pleading[,]”
rendering dismissal appropriate).
III. Analysis
A.
Statute of Limitations
Plaintiff seeks to enforce both “[§§] 605 and 553 of 47
U.S.C., which are provisions of the Federal Cable Act that address
different modalities of so-called ‘cable theft.’”
J & J Sports
Prods., Inc. v. Mayreal II, LLC, 849 F.Supp.2d 586, 588 (D.Md.
2012).
Section 553 prohibits the unauthorized interception or
receipt of certain cable communications, while § 605 proscribes
the
unauthorized
interception
or
receipt
of
certain
“radio”
communications, including at least “digital satellite television
transmission.”
Id. at 588 n.3.
U.S.C.
nor
§
Defendants
605
argue
§
553
that
The parties agree that neither 47
provide
a
statute
Pennsylvania’s
of
two-year
limitations.
statute
of
limitations against tort liability, 42 Pa. Stat. and Cons. Stat.
§ 5524, should apply to this action. (ECF No. 17, at 2). Plaintiff
maintains that Maryland’s piracy statute, Md. Code, Crim. Law § 75
303, provides the proper three-year statute of limitations.
(ECF
No. 18, at 3).
“[W]hen a federal statute contains no statute of limitations,
the rule is that the federal court — applying federal choice of
law rules — will apply the most closely analogous statute of
limitations of the forum state.”
U.S. ex rel. Ackley v. Int’l
Bus. Machines Corp., 110 F.Supp.2d 395, 402 (D.Md. 2000) (emphasis
in original); see DirecTV, Inc. v. Webb, 545 F.3d 837, 847 (9th
Cir. 2008) (“When a federal statute does not have its own statute
of limitations, we are directed to borrow a period from the forum
state’s analogous state law”) (emphasis added); see also Lampf,
Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350, 355
(1991) (“It is the usual rule that when Congress has failed to
provide a statute of limitations for a federal cause of action, a
court
‘borrows’
or
‘absorbs’
the
local
time
limitation
analogous to the case at hand.”) (emphasis added).
there are two exceptions to this federal practice.
most
Importantly,
First, 28
U.S.C. § 1658 provides a general, four-year limitations period for
federal statutes enacted after December 1, 1990 that do not have
a statute of limitations.
29, 34 n.* (1995).
N. Star Steel Co. v. Thomas, 515 U.S.
28 U.S.C. § 1658 does not apply to either 47
U.S.C. § 553 or § 605, however, because the causes of action
Plaintiff is suing under were not “made possible” after December
6
1, 1990.3
Jones v. R.R. Donnelley & Sons Co., 541 U.S. 369, 382
(2004). Second, “when a rule from elsewhere in federal law clearly
provides a closer analogy than available state statutes, and when
the federal policies at stake and the practicalities of litigation
make
that
rule
interstitial
a
significantly
lawmaking,”
courts
more
appropriate
should,
instead,
analogous federal law for a statute of limitations.
vehicle
look
to
for
an
N. Star Steel
Co., 515 U.S. at 34 (quoting Reed v. United Transp. Union, 488
U.S. 319 323 (1989)).
rule,” however.
This is a “narrow exception to the general
Reed, 488 U.S. at 324.
Because neither party
presents arguments regarding a sufficiently analogous federal law,
for the purposes of the instant motion, the court will assume no
such law exists.
See, e.g., Innovative Sports Mgmt., Inc. v. 3508
E. LLC, No. 11-cv-3268-MJG, 2012 WL 6563378, at *2 (D.Md. Dec. 13,
2012) (choosing not to determine whether there is a closer federal
analogue than available state statutes because the parties limited
their arguments to which state law applies).
3
The Communications Act of 1934 provides the basis for
Plaintiff’s claim under 47 U.S.C. § 605. See Communications Act
of 1934, ch. 652, 48 Stat. 1064, 1103-04 (1934) (codified at 47
U.S.C. § 605).
The Cable Communications Policy Act of 1984
supplies the basis for Plaintiff’s cause of action under 47 U.S.C.
§ 553. See Cable Communications Policy Act of 1984, Pub. L. No.
98-549, 98 Stat. 2779, 2796-97 (1984) (codified at 47 U.S.C. §
553). While these provisions have been amended since December 1,
1990, the underlying causes of action Plaintiff is relying upon
precede that date. See Kingvision Pay-Per-View, Corp. v. Belmont,
Inc., 366 F.3d 217, 220 (3d Cir. 2004).
7
Maryland has a piracy statute, Md. Code, Crim. Law § 7-303,
that is analogous to 47 U.S.C. §§ 553 and 605.4
The Maryland
piracy statute does not specify a statute of limitations, however.
A determination regarding what statute of limitations applies to
§ 7-303 has not been made by the United States Court of Appeals
for the Fourth Circuit or by a Maryland appellate court, but at
least one federal judge in Maryland has determined the appropriate
statute of limitations.
Judge Garbis applied Maryland’s three-
year limitations period for civil actions, Md. Code, Cts. & Jud.
Proc. § 5-101, to claims brought under 47 U.S.C. §§ 553 and 605 in
Innovative Sports:
In DirecTV, Inc. v. Webb, 545 F.3d 837, 849
(9th Cir. 2008), the Ninth Circuit found the
California Piracy Act (a criminal statute)
analogous to the FCA but applied the general
civil limitation. Similarly, in J & J Sports
Prods., Inc. v. West Side Stories, No. 5:10–
CV–179–F, 2011 WL 2899139, *4 (E.D.N.C. July
18, 2011), the federal district court held
that a state criminal statute was analogous to
§ 605 of the FCA but applied the state
“catchall” civil statute of limitations of
three years. Id. at *5. Also, in DirecTV,
Inc. v. Wright, 350 F.Supp.2d 1048, 1054
(N.D.Ga. 2004), the district court found a
state statute (with a component classifying
the crime as a misdemeanor) analogous to the
FCA, but the court borrowed Georgia’s general
4
47 U.S.C. § 553 prohibits unauthorized reception of cable
services, and 47 U.S.C. § 605 bars unauthorized reception and
publication of signal transmissions. Similarly, Md. Code, Crim.
Law § 7-303 outlaws the reception of “cable television service”
via “fraudulent means[.]” Moreover, all three statutes authorize
criminal and civil remedies for violations.
See 47 U.S.C. §§
553(b)-(c), 605(e); Md. Code, Crim. Law § 7-303(d)-(f).
8
four-year statute of limitation for “injuries
to personalty.”
The Court, recognizing the absence of binding
precedent, finds persuasive [Plaintiff]’s
contention that the applicable statute of
limitations is three years.
2012 WL 6563378, at *2-3.
Innovative Sports and the analysis
therein is analogous and persuasive here. Thus, Maryland’s general
three-year limitations period for civil actions is applicable to
this case.
Because the cause of action herein arose on May 2,
2015 (ECF No. 1 ¶ 9), and Plaintiff’s complaint was filed on April
6, 2018 (ECF No. 1), Plaintiff’s complaint is not time-barred.
B.
Individual Liability
Defendants
argue
that
Mr.
Richardson
cannot
be
held
personally liable because Plaintiff fails “to allege any facts to
support personal liability.”
(ECF No. 17, at 3).
An individual
is liable for corporate violations of 47 U.S.C. §§ 553 and 605
when he has the “right and ability to supervise the violations, as
well
as
an
misconduct.”
obvious
and
direct
financial
interest
in
the
Mayreal II, 849 F.Supp.2d at 589 (quoting J&J Sports
Prods., Inc. v. 291 Bar & Lounge, LLC, 648 F.Supp.2d 469, 473
(E.D.N.Y. 2009) (internal quotation marks omitted)).
Judge Hollander’s analysis in Mayreal II, a closely analogous
case, provides guidance of what a plaintiff must allege to support
vicarious liability under 47 U.S.C. §§ 553 and 605.
In Mayreal
II, “principals and co-owners” of a nightclub were accused of
9
intercepting and broadcasting a pay-per-view boxing match the
plaintiff had exclusive distribution rights over, in violation of
47 U.S.C. §§ 553 and 605. Id. at 587. The allegations of vicarious
liability rested on the plaintiff’s assertion that the defendants
were owners of the nightclub, one defendant was the nightclub’s
resident agent, and both defendants were named on the business’s
liquor license.
See id. at 592.
Judge Hollander concluded that
these allegations were inadequate, pointing out that plaintiffs
failed
to
allege
facts
demonstrating
that
the
individual
defendants were present at the nightclub during the broadcast,
that they personally authorized interception and display of the
broadcast, that they authorized advertisements for the broadcast,
or that they imposed a cover charge to profit from the display.
Id.
Indeed, Judge Hollander found the generalized allegations of
individual
liability
advanced
by
the
plaintiff
were
a
mere
“formulaic recitation of the elements of the cause of action.”5
Id. at 591-92 (quoting Twombly, 550 U.S. at 555).
Because the
inadequate allegations were coupled with naked claims of liability
based on information and belief and simply tracked the language of
47 U.S.C. §§ 553 and 605, the plaintiffs failed to state a claim.
5
The allegations were that “[d]efendants and/or their agents,
servants, workmen or employees did unlawfully publish, divulge and
exhibit the Program,” and that the violation “by each of the
Defendants [was] done willfully and for purposes of direct or
indirect commercial advantage or private financial gain.” Id. at
591-92.
10
See id.; see also J&J Sports Prods. Inc. v. Md. Food & Entm’t,
LLC, 11-cv-3344-ELH, 2012 WL 5289790, at *3 (D.Md. Oct. 24, 2012)
(Judge
Hollander
explaining
and
reaffirming
her
analysis
in
Mayreal II in a case with “virtually identical” allegations).
Contrary to its assertions, Plaintiff’s complaint does not
plead any facts that illuminate Mr. Richardson’s “right and ability
to supervise” misconduct or that he had an “obvious and direct
financial interest” in broadcasting the Program.
& 11).
(ECF No. 1 ¶¶ 8
Plaintiff does not allege (1) that Mr. Richardson was
present at the establishment when the Program was shown, (2) that
he personally authorized the interception and display of the
Program, (3) that he authorized advertisements for the broadcast
of the Program, or (4) that he imposed a cover charge to profit
from
the
Moreover,
broadcast.
Plaintiff
See
merely
Mayreal
claims
II,
849
that
it
F.Supp.2d
is
at
“informed
592.
and
believes” its allegations without disclosing the facts that form
its basis of knowledge.
(ECF No. 1 ¶¶ 8-13); see Mayreal II, 849
F.Supp.2d at 592; see also Pa. Mut. Life Ins. Co. v. Berck, 09cv-0578-DKC, 2010 WL 1233980, at *5 (noting that adequately stating
the facts that form the pleader’s basis of knowledge “satisfies
the pleading requirements of the federal rules.”). While Plaintiff
provides a webpage of the Maryland State Department of Assessments
and
Taxation,
purportedly
identifying
Mr.
Richardson
as
Pro
Street’s resident agent (ECF No. 1-1, at 1), and an alleged copy
11
of Pro Street’s liquor license, identifying Mr. Richardson as its
licensee (id., at 6), this evidence, by itself, is insufficient to
show that Mr. Richardson had the “right and ability to supervise”
misconduct
or
that
he
had
an
“obvious
interest” in broadcasting the Program.
and
direct
financial
See Mayreal II, 849
F.Supp.2d at 591-92.
Therefore, Defendant’s motion to dismiss the claims against
Mr. Richardson pursuant to Fed.R.Civ.P. 12(b)(6) will be granted.
Nevertheless, Plaintiff requests leave to amend.
Rule 15(a)(2) of
the Federal Rules of Civil Procedure instructs courts to “freely
give leave [to amend] when justice so requires.”
Accordingly,
Plaintiff will have twenty-one (21) days to file an amended
complaint to provide factual support against Defendant Richardson.
IV.
Conclusion
For the foregoing reasons, Defendants’ motion to dismiss will
be denied in part and granted in part.
A separate order will
follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
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