Joe Hand Promotions, Inc. v. Md. Food & Entm't., LLC
| Decision Date | 19 November 2012 |
| Docket Number | Civil No. CCB-11-3272 |
| Court | U.S. District Court — District of Maryland |
| Parties | JOE HAND PROMOTIONS, INC. v. MARYLAND FOOD & ENTERTAINMENT, LLC, et al. |
Plaintiff Joe Hand Promotions, Inc. ("Joe Hand") has filed this lawsuit against Maryland Food & Entertainment, LLC ("Maryland Food"), Jerry A. Dianis, Judith A. Brown, and Lisa Haynes (together, "the defendants"), alleging unauthorized publication or use of communications in violation of 47 U.S.C. § 605; unauthorized reception of cable service in violation of 47 U.S.C. § 553; and conversion. Now pending before the court is the defendants' motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). The parties' submissions have been reviewed and no oral argument is necessary. See Local Rule 105.6. For the reasons stated below, the defendants' motion will be granted in part and denied in part.
Defendant Maryland Food & Entertainment, LLC, through its owners and officers, operates BMX Lounge Courtside Sports Bar ("Courtside") in Hanover, Maryland. Plaintiff Joe Hand Promotions, Inc. is a Pennsylvania corporation that engages in the distribution of various sporting event programs. Relevant to this action, Joe Hand paid for and was granted exclusive television distribution rights to the Ultimate Fighting Championship 103: Rich Franklin v. Vitor Belfort ("the Program"), which was telecast nationally on September 19, 2009. (Compl., ECFNo. 1, ¶ 9.) Joe Hand entered into sublicensing agreements with various commercial establishments that desired to exhibit the Program to their patrons. (Id. at ¶ 10.)
On September 20, 2009, an investigator hired by Joe Hand witnessed the Program being shown on a television at Courtside between 12:07 a.m. and 12:22 a.m. (See Appiah Aff., ECF No. 1-1.) Alleging that Courtside was not authorized to broadcast the program, Joe Hand filed suit over two years later on November 15, 2011, asserting claims for unauthorized interception of communications by wire or radio in violation of 47 U.S.C. § 605; unauthorized interception of communications through a cable system in violation of 47 U.S.C. § 553; and conversion under Maryland law.1 Joe Hand alleges that Jerry A. Dianis, Judith A. Brown, and Lisa Haynes are "principals and co-owners of the [liquor] license" for Maryland Food and each is an "officer, director, shareholder, employee, agent, and/or other representative" of Maryland Food and therefore individually liable on all three counts.2 Joe Hand seeks statutory and compensatory damages as well as reasonable attorneys' fees. The defendants filed a motion to dismiss the complaint on April 2, 2012.
"[T]he purpose of Rule 12(b)(6) is to test the sufficiency of a complaint and not to resolve contests surrounding the facts, the merits of a claim, or the applicability of defenses." Presley v. City of Charlottesville, 464 F.3d 480, 483 (4th Cir. 2006) () (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)). When ruling on such a motion, the court must "accept the well-pled allegations of the complaint as true," and "construe the facts and reasonable inferences derived therefrom in the light most favorable to the plaintiff." Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). "Even though the requirements for pleading a proper complaint are substantially aimed at assuring that the defendant be given adequate notice of the nature of a claim being made against him, they also provide criteria for defining issues for trial and for early disposition of inappropriate complaints." Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir. 2009). To survive a motion to dismiss, the factual allegations of a complaint "must be enough to raise a right to relief above the speculative level . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations and alterations omitted). Thus, the plaintiff's obligation is to set forth sufficiently the "grounds of his entitlement to relief," offering more than "labels and conclusions." Id. (internal quotation marks and alterations omitted). "[W]here the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged-but it has not 'show[n]'-'that the pleader is entitled to relief.'" Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (quoting Fed. R. Civ. P. 8(a)(2)).
Joe Hand seeks to hold Mr. Dianis, Ms. Brown, and Ms. Haynes liable as individuals on all three counts in the complaint. Both parties agree that to state a claim against an individual under the Cable Act, a complaint must allege facts showing that the individual had a right and ability to supervise the infringing activities, as well as a direct financial interest in such activities.See, e.g., J&J Sports Productions, Inc. v. 291 Bar & Lounge, LLC, 648 F. Supp. 2d 469, 473 (E.D.N.Y. 2009); J & J Sports Productions, Inc. v. Ribeiro, 562 F. Supp. 2d 498, 501 (S.D.N.Y. 2008).3 In 291 Bar & Lounge, the court refused to impose liability under the Cable Act on the alleged owner of the offending entity, asserting that individual liability requires that the individual authorize the underlying violations. Id. Noting that the plaintiff had "made no allegations that [the owner] was present for the violation, that he authored or controlled it, or that he reaped commercial profit from it," the court concluded that the plaintiff had failed to make adequately detailed allegations against him "beyond the conclusory and vague charge of mere ownership." Id.
A split of authority exists on the issue of individual liability under the Cable Act in the District of Maryland. In J & J Sports Productions, Inc. v. L & J Group, LLC, 2010 WL 816719, *2 (D. Md. Mar. 4, 2010), a judge concluded that a complaint containing allegations nearly identical to those in the present case stated a claim to relief against each of the individual defendants that was "'plausible on its face'" (quoting Iqbal, 556 U.S. at 678). Another judge reached the opposite conclusion in J & J Sports Productions, Inc. v. MayrealII, LLC, 849 F. Supp. 2d 586, 591 (D. Md. 2012), and J & J Sports Productions, Inc. v. Maryland Food & Entm't, LLC, 2012 WL 5289790, *5 (D. Md. Oct. 24, 2012). In both MayreallII and Maryland Food & Entm't, the plaintiffs sought to hold the individual defendants liable based solely on allegations that they were resident agents and liquor licensees of the defendant business entities. The judge in each of these 2012 cases dismissed the plaintiffs' Cable Act claims against the individual defendants for failure to state a claim under the Iqbal/Twombly pleading standard.
Other district courts have found similar allegations to be insufficient to state a claim to relief under the Cable Act. See 291 Bar & Lounge, 648 F. Supp. 2d at 473 (E.D.N.Y. 2009) (); Joe Hand Promotions, Inc. v. Coaches Sports Bar, 812 F. Supp. 2d 702, 703 (E.D.N.C. 2011) (); Circuito Cerrado, Inc. v. Pizzeria y Pupuseria Santa Rosita, Inc., 804 F. Supp. 2d 108, 113 (E.D.N.Y. 2011) (). But see, e.g., J & J Sports Productions, Inc. v. Q Cafe, Inc., 2012 WL 215282, at *4 (N.D. Tex. Jan. 25, 2012) ().
Turning to the present case, Joe Hand alleges, without distinguishing between the individual defendants and Maryland Food, 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." (ECF No. 1, ¶ 12.) As in MayreallII and Maryland Food & Entm't, the complaint makes no allegation that the individual defendants were present at Courtside when the Program was shown, that they personally authorized the Program's interception and display, or that they authorized advertisements for the display of the Program or the imposition of a cover charge to profit from the display.4 The only specific factual allegations made with respect to the individual defendants are that all three are named on Maryland Food's liquor license and that Ms. Brown is Maryland Food's resident agent. (See ECF No. 1-1.) Joe Hand also alleges conclusorily and upon information and belief that all three are "officer[s],director[s], shareholder[s], employee[s], agent[s], and/or other representative[s]" of Maryland Food. I agree with the decision in MayrealII that such minimal allegations of individual liability do not satisfy the pleading standard articulated in Iqbal and Twombly. Accordingly, Counts I and II against the individual defendants will be dismissed without prejudice. Joe Hand may seek leave to file an amended complaint if it can allege sufficient facts.
Count III (conversion) against the individual defendants also must be dismissed. Under Maryland law, officers, directors, and shareholders of a corporation or limited liability company cannot be held personally liable for alleged acts of the corporation except where it is "necessary to prevent fraud or enforce a paramount equity." See, e.g., Stein v. Smith, 358 Md. 670, 682 (2000); Bart Arconti & Sons, Inc. v. Ames-Ennis, Inc., 275 Md. 295, 312 (1975). Joe Hand has not alleged any facts on which the court could find it proper to pierce the corporate...
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