G&G Closed Circuit Events, LLC v. Kirby's Tavern Inc et al

Filing 12

MEMORANDUM AND ORDER entered: DENYING 8 MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM .(Signed by Judge Lee H Rosenthal) Parties notified. (lle4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
G&G CLOSED CIRCUIT EVENTS, LLC,
as Broadcast Licensee of the March 13,
2021, Juan Francisco Estrada v. Roman
Gonzalez II WBA/WBC World Superfly
Championship Fight Program,
Plaintiff,
v.
KIRBY’S TAVERN INC, individually and
d/b/a ON THE KIRB, et al.
Defendants.

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June 03, 2024
Nathan Ochsner, Clerk

CIVIL ACTION NO. 24-875

MEMORANDUM AND ORDER
This action arises under the Federal Communication Act of 1934. The plaintiff, G&G
Closed Circuit Events, LLC, alleges that “Kirby’s Tavern,” a Houston sports bar and restaurant
known as “On the Kirb,” unlawfully intercepted and broadcast a boxing match that G&G had the
exclusive right to sublicense. Joseph Arbeely, an owner of Kirby’s Tavern, has moved to dismiss
under Rule 12(b)(6). (Docket Entry No. 8). He argues that G&G’s complaint does not support the
inference that he was personally involved in the alleged broadcast, or that he is liable for the
conduct of Kirby’s Tavern that resulted in the broadcast at On the Kirb.
Based on the briefs, the record, and the applicable law, the court denies Arbeely’s motion
to dismiss. The reasons are set out below.
I.

Background
G&G Closed Circuit Events, LLC alleges it held the exclusive right to sublicense the March

13, 2021, boxing match between Juan Francisco Estrada and Roman Gonzalez II. (Docket Entry
No. 1 at ¶¶ 1, 7). G&G alleges that instead of purchasing the right to broadcast the match from

G&G, the defendants “willfully intercepted” the satellite transmission and displayed the match for
the enjoyment of patrons at On the Kirb, in violation of §§ 553 and 605 of the Federal
Communication Act. (Id. at ¶¶ 13–15, 18).
G&G sues Kirby’s Tavern; ADC Concepts LLC, an alleged owner and operator of Kirby’s
Tavern; and Arbeely, who admits he was an owner of Kirby’s Tavern and of ADC Concepts when
the match was broadcast. Arbeely has moved to dismiss.
II.

The Rule 12(b)(6) Standard
Rule 12(b)(6) allows dismissal if a plaintiff fails “to state a claim upon which relief can be

granted.” FED. R. CIV. P. 12(b)(6). Rule 12(b)(6) must be read in conjunction with Rule 8(a),
which requires “a short and plain statement of the claim showing that the pleader is entitled to
relief.” FED. R. CIV. P. 8(a)(2). A complaint must contain “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). Rule 8 “does
not require ‘detailed factual allegations,’ but it demands more than an unadorned, the-defendantunlawfully-harmed-me accusation.”

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting

Twombly, 550 U.S. at 555). “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.” Id. (citing Twombly, 550 U.S. at 556). “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.” Id. (quoting Twombly, 550 U.S. at 556).
To withstand a Rule 12(b)(6) motion, a complaint must include “more than labels and
conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Lincoln
v. Turner, 874 F.3d 833, 839 (5th Cir. 2017) (quoting Twombly, 550 U.S. at 555). “Nor does a
complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’” Iqbal,

556 U.S. at 678 (alteration in original) (quoting Twombly, 550 U.S. at 557). “A complaint ‘does
not need detailed factual allegations,’ but the facts alleged ‘must be enough to raise a right to relief
above the speculative level.’” Cicalese v. Univ. of Tex. Med. Branch, 924 F.3d 762, 765 (5th Cir.
2019) (quoting Twombly, 550 U.S. at 555). “Conversely, when the allegations in a complaint,
however true, could not raise a claim of entitlement to relief, this basic deficiency should be
exposed at the point of minimum expenditure of time and money by the parties and the court.”
Cuvillier v. Taylor, 503 F.3d 397, 401 (5th Cir. 2007) (alterations omitted) (quoting Twombly, 550
U.S. at 558). A court reviewing a motion to dismiss under Rule 12(b)(6) may consider “(1) the
facts set forth in the complaint, (2) documents attached to the complaint, and (3) matters of which
judicial notice may be taken under Federal Rule of Evidence 201.” Inclusive Cmtys Project, Inc.
v. Lincoln Prop. Co., 920 F.3d 890, 900 (5th Cir. 2019).
III.

Analysis
Congress enacted the Federal Communication Act to discourage piracy. G&G Closed

Circuit Events, LLC v. El Perron Hot Dogs, LLC, No. 4:21-CV-03121, 2023 WL 4373023, at *2
(S.D. Tex. July 6, 2023). To prove a violation of the Act, a plaintiff must show that (1) the event
was shown in the defendant’s establishment and (2) the plaintiff did not authorize the exhibition
of the event there. 47 U.S.C. § 605; Joe Hand Promotions, Inc. v. 152 Bronx, L.P., 11 F. Supp. 3d
747, 753 (S.D. Tex. 2014). Sections 553 and 605 of the Communications Act “expressly prohibit
assisting third parties in intercepting or receiving unauthorized communications, and have been
interpreted to allow an aggrieved person to hold a person individually vicariously liable if he had
(1) the right and ability to supervise the unauthorized activities of the establishment in those
activities and (2) an obvious and direct financial interest in those activities.” Joe Hand, 11 F. Supp.
3d at 753 (alterations adopted and quoting reference omitted).

G&G alleges that as an owner and manager of Kirby’s Tavern and an officer and owner of
ADC Concepts, Arbeely “had a right and ability to supervise the activities of [Kirby’s Tavern],”
and “had an obvious and direct financial interest in the activities of [Kirby’s Tavern].” (Docket
Entry No. 1 at ¶ 4). Arbeely argues that these allegations do not support a reasonable inference of
vicarious liability because “the waiters, waitresses, bartenders, servers, managers, and staff at
[Kirby’s Tavern] on [the date of the broadcast] were not Arbeely’s employees nor were they
otherwise controlled by Arbeely individually.” (Docket Entry No. 8 at 3). According to Arbeely,
the mere fact that he “possessed a membership interest in Kirby’s Tavern and ADC Concepts” does
not allow for vicarious liability. (Id.).
G&G’s allegations state a plausible claim that Arbeely is vicariously liable for the alleged
interception and broadcast. As an owner and manager, Arbeely’s financial interest in having
patrons view the boxing match at Kirby’s Tavern is sufficiently “obvious and direct.” It is also
reasonable at this stage to infer that as an owner and manager, Arbeely had the “right and ability”
to supervise employees working at Kirby’s Tavern, including the right and ability to determine
whether the match would be illegally broadcast at Kirby’s Tavern. If, after discovery, the evidence
shows that Arbeely lacked this right or ability, the issue may be reurged on summary judgment.
IV.

Conclusion
Arbeely’s motion to dismiss is denied on the current record. (Docket Entry No. 8).
SIGNED on June 3, 2024, at Houston, Texas.

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Lee H. Rosenthal
United States District Judge