PPV Connection, Inc. v. Melendez et al

Filing 23

OPINION AND ORDER re 22 Motion In Compliance with Order to Show Cause. Signed by Judge Salvador E Casellas on 1/19/2010.(THD)

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I N THE UNITED STATES DISTRICT COURT F O R THE DISTRICT OF PUERTO RICO P P V CONNECTION, INC. Plaintiff v. G IL B E R T O MELENDEZ, et al D e f e n d a n ts C iv il No. 09-1454

OPINION & ORDER T h e present action was brought by Plaintiff, PPV Connection, Inc. ("PPVC"), against n u m e ro u s and unrelated co-defendants. After reviewing the Complaint, this Court ordered P P V C to show cause why the present action should not be dismissed against all but the first n a m e d co-defendant, for improper joinder. Docket # 7. PPVC duly responded to this Court´s O rd e r to Show Cause. Docket # 22. After considering PPVC´s response, and the applicable law, a ll claims shall be dismissed without prejudice against all co-defendants. F a c tu a l Background P P V C has joined twenty-two sets of defendants in the present law suit. Including the a b o v e captioned action, over the past five and a half years, PPVC has initiated thirty (30) nearly id e n tic a l cases in the District of Puerto Rico, each alleging that multiple sets of defendants v io la te d PPVC's "exclusive license to distribute for commercial gain the closed circuit b ro a d c a s t of [specified boxing events] to various business establishments throughout Puerto R ic o ." See, e.g., Docket # 1 at ¶ 8. These defendants are alleged to have violated said license b y "willfully intercept[ing] and/or receiv[ing] the interstate communication of [the given boxing e v e n t]" without "payment of the appropriate fee to PPVC." See, e.g., id. at ¶¶ 14 & 16. In each c a s e , PPVC thereby seeks recovery pursuant to the Communications Act of 1934, as amended, 4 7 U.S.C. §§ 553 and 605. See, e.g., id. at ¶1.

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F o r the most part, these cases have been disposed of through some combination of s e ttle m e n ts (see, e.g., PPV Connection, Inc. v. Colon-Velazquez, No. 06-1793, Docket # 4 & 5 ), default judgments (see, e.g., PPV Connection, Inc. v. Acevedo, No. 07-1794, Docket # 12), d ism is s a ls for service error (see, e.g., PPV Connection, Inc. v. Hernandez, No. 09-1447, Docket # 23) and failure to prosecute (see, e.g., PPV Connection, Inc. v. Reyes, No. 08-1193 (D.P.R. f ile d Feb. 3, 2009) (order dismissing complaint against thirteen defendants for failure to p ro s e c u te ). In one such case, one set of defendants is currently trial ready. PPV Connection, Inc. v . Lopez, (No. 07-1796) (Docket # 49). W ith respect to the instant cases, on November 17, 2009, this Court filed an "Order to S h o w Cause," asking PPVC to provide (1) "proof of progress in the claim against [defendants]," (2 ) "proof of timely service of the other parties," and (3) cause as to "why the present action s h o u ld not be dismissed for improper joinder under FED.R.CIV.P.20 & 21," Docket # 9. On N o v e m b e r 30, 2009, the deadline imposed by the Court, Plaintiff PPVC filed its "Motion in C o m p lia n c e to Order to Show Cause." Docket # 25. This Court's being satisfied with PPVC's s h o w in g as to (1), (2), and (4) above, it remains for this Court to determine whether this action s h o u ld be dismissed for Improper Joinder under FED.R.CIV.P.20 & 21. It should also be noted th a t a summons was issued for named co-defendant, Gilberto Meléndez ("Meléndez"), on June 9th , 2009, but no proof of process has yet been returned to the Clerk of the Court.1 A p p lic a b le Law & Analysis O f PPVC's twenty-nine similar cases besides the above captioned, the joinder issue has a ris e n in two, neither of which has settled the question directly. PPV Connection, Inc. v. R o d rig u e z , 607 F. Supp. 2d 301, 306 (D.P.R. 2009) (improper joinder as basis for dismissal

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P la in tiff has requested dismissal without prejudice of all claims against Meléndez.

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d e c la re d moot); PPV Connection, Inc. v. Pacheco, No.08-1045 (D.P.R. filed Jan. 11, 2008) (R e p o rt and Recommendation from Magistrate Court on Motion to Dismiss for improper joinder p e n d in g ). However, the present case closely parallels Don King Productions, Inc. v. ColonR o s a rio , 561 F.Supp. 2d 189 (D.P.R. 2008), which held joinder improper where (1) there was n o allegation that defendants acted in concert, (2) the only connection between defendants was th a t they were alleged to have violated the same federal laws against piracy of cable television, (3 ) defendants were likely to present different defenses, and (4) defendants were likely to c o n f ro n t different evidence. Id. at 192 (D.P.R. 2008). T h o u g h , in addition to this Court, two others within the District of Puerto Rico have a d d re ss e d the possibility that PPVC's joinder of defendants was improper, in no case has the q u e s tio n been settled. See Rodriguez, 607 F. Supp. 2d 301 (D.P.R. 2009); Pacheco, No.08-1045. In Rodriguez and Pacheco, defendants Rivera Rosario and Méndez Piña respectively, each cited im p ro p e r joinder as a basis for dismissal. Motion to Dismiss at 4-6, Rodriguez (No. 08-1046) (D o c k e t # 7); Motion to Dismiss for Improper Joinder under FED.R.CIV.P. 21, Pacheco (No. 081 0 4 5 ) (Docket # 26). Both argued that as "[t]here is no allegation that the[] defendants acted in c o n c e rt or are jointly liable for anything ... [t]he defendants ... have been improperly joined in o n e action." Motion to Dismiss at 4, Rodriguez (No. 08-1046) (Docket # 7); Motion to Dismiss f o r Improper Joinder under FED.R.CIV.P. 21 at 1, Pacheco (No. 08-1045) (Docket # 26). In R o d rig u e z , Judge Besosa never settled the question, instead ruling it moot since, by that stage o f the litigation, no defendants other than the movants remained. 607 F. Supp. 2d at 306. In P a c h e c o , Judge Domínguez referred the issue to Magistrate Court, where no ruling has yet been d e te rm in e d . Order of Referral, Pacheco, No.08-1045 at Docket # 28. Nevertheless, Don King, which is factually almost indistinguishable from the case at bar, p ro v id e s this Court with the necessary guidance on said issue. There, this Court held that Don

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K in g Productions, Inc. ("DKPI") misjoined thirty-seven (37) defendants in violation of F ED.R .C IV.P . 20, which only allows defendants to "be joined in one action" when: (A ) any right to relief is asserted against them jointly, severally, or in the a lte rn a tiv e with respect to or arising out of the same transaction, occurrence, or s e rie s of transactions or occurrences; and (B) any question of law or fact common to all defendants will arise in the a c tio n . In Don King, whether the defendants were properly joined hinged upon the "transactional re la te d n e s s " requirement. Don King, 561 F.Supp.2d at 191. The opinion explained that: (1) the d e f e n d a n ts were not alleged to have "acted in concert," that (2) "[t]he only connection between th e m [was] that they each allegedly violated provisions of federal law relating to piracy of cable te le v isio n ," and that (3) they were likely to have different defenses and (4) face different e v id e n c e . This Court then found that the alleged "transactions" and "occurrences" lacked the re q u is ite "relatedness." Id. at 192. T h e relevant facts in the instant cases and in Don King are substantially the same.2 DKPI a lle g e d to have a "license for the exclusive exhibition of" the "closed-circuit telecast" of three b o x in g events: (1) the April 17-18, 2004 match between Chris Byrd and Andrew Golota, (2) the O c to b e r 2-3, 2004 match between Felix Tito Trinidad and Ricardo Mayorga, and (3) the D e c e m b e r 14, 2003 match between Bernard Hopkins and Williams Joppy ("DKPI Events"). D o n King, 561 F.Supp.2d at 190. Likewise, PPVC alleges to hold "the exclusive license to d istrib u te for commercial gain the closed circuit broadcast of [the July 26, 2008 boxing match b e tw e e n Miguel Cotto and Antonio Margarito]" ("PPVC Event"). Docket # 1 ¶ ¶ 6 & 8. Both

Indeed, moving for higher damages in PPV Connection, Inc. v. Colon, PPVC argued that "this Honorable District C o u r t ... has issued default judgments against defendants in cases under 47 U.S.C. §§ 553 and 605 filed by PPVC or Don K in g Productions, Inc., identical to the instant case . . ." Motion to Alter or Amend Partial Judgment at 11 ¶12, PPV C o n n e c tio n , Inc. v. Colon (No. 06-1793) (emphasis added). Though this motion was filed in February of 2007, prior to the 2 0 0 8 Don King opinion, PPVC clearly refers to a line of DKPI cases into which the Don King opinion falls and characterizes th o s e cases as "identical" to those initiated by PPVC.

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e n titie s allege to have been engaged in "contract[ing] with various establishments throughout P u e rto Rico and grant[ing] to such establishments the right to broadcast the Event in exchange f o r a fee." Docket # 1 ¶ 10; Don King, 561 F.Supp.2d at 190 (practically identical language). In both the instant action and in Don King, PPVC and DKPI each charged over twenty (2 0 ) defendants with (1) "willfully intercept[ing] and/or receiv[ing] the interstate c o m m u n ic a tio n of the [closed-circuit telecast of specific boxing events]" (Docket # 1 ¶ 14; Don K in g , 561 F.Supp.2d at 190), (2) without paying the requisite fees, and (3) in violation of the e x c lu siv e license rights of each. Docket # 1 ¶ 16; Don King, 561 F.Supp.2d at 190. Moreover, th e strategy of recovery, is identical, and based on the Communications Act of 1934. 47 U.S.C. § § 553 and 605. In its "Motion in Compliance of Order to Show Cause," PPVC seeks to distinguish the f a c tu a l situation in the instant cases from that in Don King. Docket # 25 at 6. Though claiming th a t the facts "differ[] significantly," PPVC first points to a procedural distinction­that whereas in Don King defendants moved for dismissal on the basis of improper joinder, at present "no d e f e n d a n t is defending him or herself and there is no dismissal or severance request." Id. H o w e v e r, that the joinder issue was raised by the bench rather than a defendant has no bearing o n whether the joinder was itself proper. Moreover, FED.R.CIV.P. 21 allows that in the event o f misjoinder, "[o]n motion or on its own, the court may, at any time, on just terms, add or drop a party." (Emphasis added). As "[t]he language `[p]arties may be dropped' essentially means th a t parties may be dismissed," a court may dismiss parties sua sponte upon a finding of m is jo in d e r. See DirectTV, Inc. v. Boggess, 300 F. Supp. 2d 444, 450 (S.D.W.V. 2004) (" o rd e r[ in g ] sua sponte the dismissal without prejudice of all other defendants in th[e] action e x c e p t for the first named defendant").

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P P V C next seeks to differentiate Don King from the instant cases by highlighting the f a c t that the defendants in Don King were charged with cable and satellite signal theft "of three d if f e re n t and distinct transmissions broadcasted on three different and distinct dates," namely, th e DKPI Events, whereas the present defendants are all charged with theft relating to the same b o x in g event, the PPVC Event. Docket # 25 at 6. Though failing to engage in any explanation o f the how or why this difference may be significant, PPVC must believe that by resting its c la im upon a single event it has tightened the "transactional relatedness" it needs to satisfy F ED.R .C IV.P . 20. However, given this Court's reasoning in Don King, the fact that in the instant cases all o f the defendants "are alleged to have intercepted the same satellite and/or cable signal of the s a m e live television broadcast on the evening of August 30, 2008," rather than three separate s ig n a ls of three separate broadcasts on three separate nights, bears little relevance to whether th e transactions and occurrences are sufficiently related to render joinder proper pursuant to F e d .R .C iv .P . 20. Docket # 25 at 6. That the charges all relate to the PPVC Event does not c h a n g e the fact that the defendants are not alleged to have acted in concert, or even to have had a n y relationship with each other whatsoever, and hence are likely to avail themselves of d i f f e re n t defenses and to be confronted with different evidence. See Don King, 561 F. Supp. 2 d at 192. Moreover, even though PPVC has limited its charges to those relating to a single boxing e v e n t, it remains true that its "claims against the defendants, `arise out of different, albeit s im ila r, facts.' The only connection between them is that they each allegedly violated provisions o f federal law relating to piracy of cable television." Id. (Quoting DIRECTTV v. Patel, 2003 W L 22669031, at p. 1 (N.D.III.2003) (unpublished)). Given that the similarities between Don

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K in g and the instant cases are such that the factual backgrounds are nearly identical the legal re a s o n in g from the former is directly applicable to the latter. C le a rly then, PPVC improperly joined unrelated defendants. That said, the procedural s ta tu s of the instant cases is such that should this Court enter the partial judgments and default ju d g m e n ts requested by PPVC, "no defendants would be actively defending themselves." D o c k e t # 25 at 5. Thus this Court might, as urged by PPVC, enter such judgments and consider th e joinder issue moot, as did the Rodriguez court. However, as FED.R.CIV.P. 21 expressly a llo w s a court to "add or drop a party," or in other words, to dismiss a party, sua sponte, "at any tim e , on just terms," this Court may also dismiss claims against all defendants save the first n a m e d defendant. See Boggess, 300 F. Supp. 2d at 450. Other district courts have issued sua s p o n te dismissals of this nature, and equity in this case dictates a similar course of action. Id., F .S u p p .2 d 444 (S.D. W.V. 2004); Direct TV, Inc. V. Armellino, 216 F.R.D. 240 (E.D.N.Y. 2 0 0 3 ). B e c a u s e this Court finds that all co-defendants, except the first named party (Meléndez), a re improperly joined, it hereby ORDERES the dismissal without prejudice of all claims a g a in st said parties. Furthermore, on an administrative note, Plaintiff's practice of improperly j o i n in g co-defendants has the effect of avoiding court filing fees, which would total near $ 7 ,0 0 0 for this case, and tens of thousands of dollars for the dozens of similar actions filed in th is district over the last five years. Accordingly, Plaintiff is advised that all future claims of this n a tu re must be instituted separately against individual defendants. Conclusion In light of the above, and considering the equities involved, this Court will DISMISS w ith o u t prejudice PPVC's claims against all co-defendants besides Meléndez on the grounds o f improper joinder. Furthermore, at Plaintiff's request, this Court will also Dismiss without

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p r e ju d ic e all claims against Meléndez, his wife Jane Doe, and the conjugal partnership between th e m . See Docket # 20. IT IS SO ORDERED. In San Juan, Puerto Rico, this 19th day of January, 2010. S / Salvador E. Casellas S A L V A D O R E. CASELLAS U n ite d States District Judge