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J & J Sports Productions, Inc. v. Castillo

United States District Court, E.D. Kentucky, Central Division, Lexington

March 27, 2014

J & J SPORTS PRODUCTIONS, INC., Plaintiff,
v.
MINERVA R. CASTILLO, individually and d/b/a EL RANCHO TAPITIO, and RIOS, INC., an unknown business entity d/b/a EL RANCHO TAPITIO, Defendants.

OPINION & ORDER

KAREN K. CALDWELL, Chief District Judge.

Currently before the Court are the motions of the Defendant, Minerva R. Castillo, to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure [DE #8, 15]. Also before the Court is the motion of the Defendant, Rios Inc., for leave to file an answer to J & J's Amended Complaint [DE #17]. These motions are ripe for review.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Plaintiff, J & J Sports Productions, Inc. ("J & J"), filed this cable piracy action on November 6, 2013 pursuant to the Communications Act of 1934, as amended, 47 U.S.C. § 605, et seq. and the Cable and Television Consumer Protections Competition Act of 1992, as amended, 47 U.S.C. § 553, against the Defendants, Minerva R. Castillo, individually and d/b/a El Rancho Tapatio, and Rios Inc., an unknown business entity d/b/a/El Rancho Tapatio. J & J alleges that it was granted the exclusive nationwide commercial distribution rights to the Manny Pacquiao v. Juan Michael Marquez III WBO Welterweight Championship Fight Program (the " Program ") telecast nationwide on Saturday, November 12, 2011. Nevertheless, J & J alleges that the Defendants unlawfully intercepted and publically exhibited the Program without payment or authorization. Accordingly, J & J now seeks statutory damages as well as attorneys' fees and costs.

Castillo filed her first motion to dismiss pursuant to Rule 12(b)(6) on January 4, 2014 [DE #8]. In her motion, Castillo contends that J & J has failed to establish that she had the requisite supervision authority or financial interest to warrant individual liability in this case. She also argues that J & J's state law conversion claim against her fails under Rule 8(a) of the Federal Rules of Civil Procedure because J & J failed to allege any facts showing that Castillo actually participated in any act of conversion.

On January 25, 2014, J & J filed its First Amended Complaint as a matter of course [DE # 11]. Under Rule 15(a)(1)(B) of the Federal Rules of Civil Procedure, no leave of court was required for the filing of this amended pleading, and under Rule 15(a)(3) of the Federal Rules of Civil Procedure, the Defendants were required to respond to this amended pleading within 14 days of service. The Defendants failed to timely respond to J & J's Amended Complaint. On February 21, 2014, the Court entered its Order requiring the parties to file a Joint Status Report of the status of this matter [DE #14]. In response to this Order, Castillo filed her renewed motion to dismiss, or in the alternative, for leave to file an answer [DE #15], and Rios filed its motion for leave to file its answer, along with a tendered Answer to the First Amended Complaint [DE #17]. These motions are now ripe for review.

II. CASTILLO'S MOTIONS TO DISMISS THE FEDERAL CLAIMS WILL BE DENIED

A. MOTION TO DISMISS STANDARD

The standard for ruling on a motion to dismiss is that a complaint must plead "enough facts to state a claim to relief that is plausible on its face." Bell Atlantic Co. v. Twombly, 550 U.S. 544, 570 (2007), abrogating Conley v. Gibson, 355 U.S. 41 (1957). Specifically, the Supreme Court stated in Twombly:

While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level.

Id. at 555 (internal citations and quotation marks omitted).

In ruling upon a motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6), all of a plaintiff's allegations are presumed true, and the complaint is construed in the light most favorable to the plaintiff. Hill v. Blue Cross and Blue Shield of Michigan, 409 F.3d 710, 716 (6th Cir. 2005). A district court may not grant a Rule 12(b)(6) motion because it does not believe the allegations. Wright v. MetroHealth Medical Center, 58 F.3d 516, 519 (6th Cir. 1995). However, "[c]onclusory allegations or legal conclusions masquerading as factual allegations will not suffice" Bishop v. Lucent Technologies, Inc., 520 F.3d 516, 519 (6th Cir. 2008). See also New Albany Tractor Inc. v. Louisville Tractor, Inc., 650 F.3d 1046, 1050 (6th Cir. 2011)("[C]ourts may no longer accept conclusory legal allegations that do not include specific facts necessary to establish the cause of action"). "Although we must accept all of the complaint's factual allegations as true, we need not accept as true legal conclusions or unwarranted factual inferences.'" Gahafer v. Ford Motor Co., 328 F.3d 859, 861 (6th Cir. 2003)(quoting Morgan v. Church's Fried Chicken, 829 F.2d 10, 12 (6th Cir. 1987).

B. THE FEDERAL STATUTES

J & J's piracy claims are based on two federal statutes. The first statute, section 553(a)(1) makes it illegal to intercept or receive without authorization any communications service offered over a cable system. 47 U.S.C. § 553(a)(1). Under this statute, a party may recover actual damages, or, in the alternative, an award of statutory damages for all violations involved in the action in an amount not less than $250 but not greater than $10, 000. 47 U.S.C. § 553(a)(3)(A)(i) and (ii). Because there is no mens rea or scienter requirement for a violation of § 553, intent is immaterial to liability. Joe Hand Promotions, Inc. v. Easterling, 2009 WL 1767579, at *4 (N.D. Ohio June 22, 2009). However, where the court finds that the violation was committed willfully and for purposes of commercial advantage or private financial gain, the court, in its discretion, may ...


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