Case 4:13-cv-03322 Document 14 Filed in TXSD on 06/17/14 Page 1 of 8
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
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`J&J SPORTS PRODUCTIONS, INC.,
`as Broadcast Licensee of the Nov. 13, 2010,
`“Tactical Warfare”: Pacquiao/Margarito
`Fight Progam
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`Plaintiff,
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`v.
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`§
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`HECTOR GARCIA, a/k/a HECTOR ALVAREZ
`GARCIA, Individually and d/b/a SOL MEXICAN §
`CAFÉ and d/b/a SOL,
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`CIVIL ACTION H-13-3322
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`§§
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`§
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`Defendant.
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`MEMORANDUM OPINION & ORDER
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`Pending before the court is defendant Hector Garcia’s motion to dismiss (Dkt. 6) and plaintiff
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`J&J Sports Production Inc.’s motion to strike affirmative defenses (Dkt. 9). After considering the
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`motions, responses, and applicable law, the court is of the opinion that the motion to dismiss should
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`be DENIED and the motion to strike should be GRANTED in part and DENIED in part.
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`I. BACKGROUND
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`Plaintiff, J&J Sports Production, Inc. (“J&J Sports”) was the license company exclusively
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`authorized to sub-license the closed-circuit telecast of the November 13, 2010, “Tactical Warfare”:
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`Manny Pacquiao v. Antonio Margarito, WBO Light Middleweight Championship Fight Program,
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`including undercard or preliminary bouts (collectively the “Event”), at commercial closed-circuit
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`locations throughout Texas. Dkt. 1 at 2. In Texas, the closed-circuit broadcast of the Event could
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`only be exhibited in a commercial establishment if the establishment was contractually authorized
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`to do so by J&J Sports. Id. Defendant, Hector Garcia (“Garcia”) is an individual residing in the
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`State of Texas. Id. at 1. Garcia was the owner of Sol Mexican Café (the “Establishment”). Id. On
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`November 13, 2010, Garcia allegedly exhibited the Event to patrons at the Establishment. Id. at 3.
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`J&J Sports claims that Garcia’s exhibition of the Event was unauthorized because he did not
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`obtain a license. Id. at 4. J&J Sports asserts claims under 47 U.S.C. §§ 553 and 605 of the Federal
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`Communications Act (“FCA”) for Garcia’s alleged unauthorized exhibition of the Event. Id. J&J
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`Sports seeks statutory damages, injunctive relief, attorneys’ fees, and costs against Garcia. Id. at 4-5.
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`Garcia filed a motion to dismiss J&J Sports’s complaint on statute of limitations grounds. Dkt. 6.
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`Garcia also answered the complaint asserting several affirmative defenses. Id. at 4-6. J&J Sports
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`filed a motion to strike Garcia’s affirmative defenses. Dkt. 9. The court will address the motions
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`in turn.
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`II. ANALYSIS
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`A.
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`Motion to Dismiss
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`Garcia filed a Rule 12(b)(6) motion claiming J&J Sports’s complaint was filed after the
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`expiration of the statute of limitations. Garcia argues that the appropriate statute of limitations
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`period for the FCA claims should be two years. J&J Sports maintains that a three year statute of
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`limitations is applicable and that its complaint was timely. Garcia concedes that if the three year
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`statute of limitations from the Copyright Act applies, J&J Sports’s complaint was timely filed by two
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`days.
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`“Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the
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`claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what
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`the . . . claim is and the grounds upon which it rests.’” Bell Atl. Corp. v. Twombly, 550 U.S. 544,
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`545, 127 S. Ct. 1955 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47, 78 S. Ct. 99 (1957)). When
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`considering a 12(b)(6) motion, a court must accept the factual allegations contained in the complaint
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`as true. Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045, 1050 (5th
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`Cir. 1982). Further, the court does not look beyond the face of the complaint to determine whether
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`the plaintiff has stated a claim under Rule 12(b)(6). Spivey v. Robertson, 197 F.3d 772, 774 (5th Cir.
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`1999). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed
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`factual allegations, a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’
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`requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of
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`action will not do.” Twombly, 550 U.S. at 554 (internal citations omitted). Factual allegations must
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`be plausible enough to “raise a right to relief above the speculative level.” Id. Additionally, “[a]
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`statute of limitations may support dismissal under Rule 12(b)(6) where it is evident from the
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`plaintiff’s pleadings that the action is barred and the pleadings fail to raise some basis for tolling or
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`the like.” Jones v. Alcoa, Inc., 339 F.3d 359, 366 (5th Cir. 2002).
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`J&J Sports brings claims under Sections 553 and 605 of the FCA. The FCA does not specify
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`a statute of limitations for actions by licensees such as J&J Sports. Prostar v. Massachi, 239 F.3d
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`669, 671 (5th Cir. 2001). When no statute of limitations is provided, the general rule is to adopt one
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`from the closest state-law analogue. N. Star Steel Co. v. Thompson, 515 U.S. 29, 33, 115 S. Ct. 1927
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`(1995). However, a statute of limitations from an analogous federal law may be used where the
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`application of state law would “frustrate or interfere with the implementation of national policies
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`. . . or be at odds with the purpose or operation of federal substantive law.” Id. at 34 (citations
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`omitted). “Under such circumstances, a court must decide whether ‘a federal statute of limitations
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`for another cause of action better reflect[s] the balance that Congress would have preferred between
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`the substantive policies underlying the federal claim and the policies of repose.’” Prostar, 239 F.3d
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`at 672 (quoting Wilson v. Garcia, 471 U.S. 261, 270, 105 S. Ct. 1938 (1985)). Federal law should
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`only apply when it “clearly provides a closer analogy than available state statutes, and when the
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`federal policies at stake and the practicalities of litigation make that rule a significantly more
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`appropriate vehicle for interstitial law making.” North Star, 515 U.S. at 35 (citations omitted).
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`In Prostar, the Fifth Circuit considered whether the Copyright Act’s three year statute of
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`limitations period applied to FCA claims. Prostar, 239 F.3d at 678. It explained the appropriate
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`analysis when Congress has not established a statute of limitations for federal causes of action:
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`First, courts must “characterize the essence” of the statute in question to
`determine which state cause of action is most analogous. Second, courts
`must determine whether application of the state limitations period would
`frustrate the policies underlying the federal law or impede its practical
`implementation. If a state limitations period would not generate such
`adverse consequences, then the state limitations period applies and our
`inquiry is concluded. However, if a conflict is apparent, then courts must
`examine whether the federal interest in uniformity mandates the application
`of an analogous federal standard. This third level of analysis requires courts
`to examine whether federal law affords a closer analogy than state law.
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`Id. at 672–73. The court held that applying the statute of limitations for the most analogous
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`Louisiana law would hinder the implementation of the FCA. Id. at 676. Specifically, because cable
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`companies engage in multi-state activities, an application of different limitations periods in each of
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`the fifty states would force companies “to make fifty separate decisions in their effort to investigate
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`and pursue cable piracy.” Id. at 676-77. Thus, “[a] single federal standard would eliminate these
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`practical difficulties, facilitating resolution of the national problems addressed by the FCA.” Id. at
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`677.
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`Garcia argues that Prostar should not apply to this case because the Texas Theft Liability Act
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`and the Texas Wiretapping Act, both of which have two year statute of limitations periods, are closer
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`analogues to the FCA than the Louisiana statute considered in Prostar. J&J Sports maintains that
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`Prostar is binding precedent and cites to numerous cases applying the Prostar ruling to the Texas
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`piracy statutes. J&J Sports insists that the federal interest in uniformity requires the consistent use
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`of the Copyright Act’s three year limitations period. Further, J&J Sports contends that even without
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`considering the interest in federal uniformity, Prostar would still apply because the Texas piracy
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`laws are not sufficiently analogous to the FCA.
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`The court agrees with J&J Sports that it is not at liberty to ignore binding Fifth Circuit
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`precedent. All of the Texas district courts that have considered the applicable limitations period for
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`FCA actions under Sections 553 and 605 have concluded that Prostar is binding and that the
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`Copyright Act’s three year statute of limitations applies. See J&J Sports Prods., Inc. v. Guerra, No.
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`4:12–CV–945, 2012 WL 5381787, at *5 (S.D. Tex. Oct. 31, 2012) (collecting cases). While the
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`court agrees that the Texas statutes in this case may provide closer analogues than the Louisiana
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`statute considered in Prostar, it is not convinced that this alone would lead to the application of a
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`two year statute of limitations period. Garcia has not shown that the statutes are sufficiently similar,
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`or that such similarities would outweigh the FCA’s interest in uniformity. As such, the court must
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`follow Fifth Circuit precedent and finds that the applicable statute of limitations is three years. Thus,
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`J&J Sports’s complaint was timely filed, and Garcia’s motion to dismiss is denied.
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`B.
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`Motion to Strike Affirmative Defenses
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`In his answer, Garcia asserts several affirmative defenses, including limitations, laches,
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`privilege and fair right of use, and duplicative claims. J&J Sports filed a motion to strike all of
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`Garcia’s affirmative defenses. “The court may strike from a pleading an insufficient defense or any
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`redundant, immaterial, impertinent, or scandalous matter.” FED. R. CIV. P. 12(f). A defendant must
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`“plead an affirmative defense with enough specificity or factual particularity to give the plaintiff ‘fair
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`notice’ of the defense that is being advanced.” FED. R. CIV. P. 8(c); Rogers v. McDorman, 521 F.3d
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`381, 385 (5th Cir. 2008) (quoting Woodfield v. Bowman, 193 F.3d 354, 362 (5th Cir. 1999)).
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`1.
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`Limitations
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`J&J Sports moves to strike Garcia’s statute of limitations defense, arguing its complaint was
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`timely filed under the applicable statute of limitations. Because the court has determined that the
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`applicable statute of limitations is three years and J&J Sports’s complaint was timely filed, the court
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`will grant J&J Sports’s motion to strike Garcia’s limitations defense. Under Rule 12(f), this
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`affirmative defense is no longer pertinent to this case.
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`2.
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`Laches
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`Alternatively, Garcia asserts a laches defense. Garcia explains that J&J Sports’s complaint
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`was filed one day short of the end of the limitations period and that witnesses and records related to
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`the exhibition of the Event have been lost because of this lapse of time. J&J Sports argues that there
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`is a strong presumption against the application of laches when the cause of action is filed within the
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`statute of limitations, and that Garcia’s pleading fails to overcome this presumption. To establish
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`that a cause of action is barred by laches, the defendant must show: (1) a delay in asserting the right
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`or claim; (2) that the delay was not excusable; and (3) that there was undue prejudice to the
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`defendant. Johnson v. Crown Enters., Inc., 398 F.3d 339, 344 (5th Cir. 2005) (quoting Goodman
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`v. Lee, 78 F.3d 1007, 1014 (5th Cir. 1996)). When both equitable and legal relief are requested, the
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`equitable claim can still be barred by laches even if the legal claim is not barred by the statute of
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`limitations. Nilsen v. City of Moss Point, Miss., 674 F.2d 379, 388 (5th Cir. 1982). Because J&J
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`Sports seeks injunctive relief in addition to damages, the court finds that Garcia may assert a laches
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`defense and that it has been plead with sufficient particularity to provide fair notice to J&J Sports.
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`J&J Sports’s motion to strike Garcia’s laches defense is denied.
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`3.
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`Privilege and Fair Right of Use
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`Garcia pleads as an affirmative defense privilege and fair right of use. Specifically, Garcia
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`asserts that he obtained a license to view the event and is therefore not liable. J&J Sports claims that
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`the fair use doctrine is not applicable to FCA claims. The fair use doctrine is available as an
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`affirmative defense to copyright infringement claims when the defendant uses copyrighted material
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`for criticism, comment, news reporting, teaching, scholarship, or research. 17 U.S.C. § 107; see
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`Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 576, 114 S. Ct. 1164 (1994) (outlining the fair
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`use doctrine). While no court in the Fifth Circuit has considered whether the fair use doctrine
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`applies to FCA claims, other courts have concluded that defenses for copyright infringement claims
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`are not applicable to FCA claims. See J&J Sports Prods., Inc. v. Barwick, 5:12-CV-05284-LHK,
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`2013 WL 2083123, *5 (N.D. Cal. May 14, 2013); Joe Hand Promotions, Inc. v. Nguyen, 11-CV-
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`04745-RMW, 2012 WL 1183738, *3 (N.D. Cal. Apr. 6, 2012). Although the fair use doctrine is not
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`applicable to FCA claims, Garcia may pursue his factual defense under the safe harbor exception of
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`Section 553 of the FCA. See J&J Sports Prods., Inc. v. Mandell Family Ventures, L.L.C., 2014 WL
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`1757307, *2 (5th Cir. May 2, 2014). However, as pled, the court must strike Garcia’s privilege and
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`fair right of use defense.
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`4.
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`Duplicative Claims: Sections 553 and 605
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`Garcia argues that J&J Sports’s claims under Sections 553 and 605 are duplicative and that
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`J&J Sports may elect only one section for recovery. J&J Sports maintains that it is not required to
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`plead the two statutes alternatively, but that it is permitted to plead both simultaneously because of
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`their overlap. “A party may state as many separate claims or defenses as it has, regardless of
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`consistency.” FED. R. CIV. P. (8)(d)(3). Specifically pertaining to Sections 553 and 605, one court
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`has held that the pleading of both statutes is permitted, but the plaintiff is required to address whether
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`Section 553, Section 605, or both apply prior to the award of any damages. J&J Sports Prods., Inc.
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`v. Live Oak Cnty. Post No. 6119 Veterans of Foreign Wars, CIV A C-08-270, 2009 WL 483157, *4
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`n.3 (S.D. Tex. Feb. 24, 2009). The court finds that duplicative claims is not an affirmative defense,
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`and that J&J Sports is therefore permitted to plead both Sections 553 and 605 of the FCA. J&J
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`Sports’s motion to strike Garcia’s duplicative claims affirmative defense is granted.
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`IV. CONCLUSION
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`For the foregoing reasons, Garcia’s motion to dismiss (Dkt. 6) based on statute of limitations
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`is DENIED. The Copyright Act’s three year statute of limitations applies in this case. Further, J&J
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`Sports’s motion to strike Garcia’s affirmative defenses (Dkt. 9) is GRANTED in part and DENIED
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`in part. The court hereby strikes Garcia’s affirmative defenses of limitations, privilege and fair right
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`of use, and duplicative claims.
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`It is so ORDERED.
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`Signed at Houston, Texas on June 17, 2014.
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`___________________________________
` Gray H. Miller
` United States District Judge
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