Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico Department of Education et al

MOTION to Dismiss for Failure to State a Claim

D.P.R.February 9, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO EDITORIAL PANAMERICANA, INC. et al Plaintiffs, v. COMMONWEALTH OF PUERTO RICO, ET AL, Defendants. CIVIL NO. 16-3086 (FAB) MOTION TO DISMISS PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 12(B)(6) TO THE HONORABLE COURT: COME NOW, Codefendants COMMONWEALTH OF PUERTO RICO DEPARTMENT OF EDUCATION; and in their individual capacity codefendants RAFAEL ROMAN MELENDEZ and HARRY VALENTIN GONZALEZ, without submitting to this Court’s jurisdiction and waiving any affirmative defense, through the undersigned attorney who appears for the sole purpose of this motion, and respectfully ALLEGE and PRAY as follows: I. INTRODUCTION Plaintiffs’ filed the instant case against the Commonwealth of Puerto Rico and its Department of Education, alleging multiple violations of various federal statutes including the Copyright Act, 17 U.S.C. §§ 101, et seq.; the Lanham Act, 15 U.S.C. §§ 1501, et seq. (including trademark infringement and palming off); the “Takings” Clause of the United States Constitution; the Civil Rights Act 42 U.S.C. §§ 1983; and the Fifth and Fourteenth Amendments to the Constitution of the United States of America; and violations of Puerto Rico law under 31 L.P.R.A. § 1802, inter alia, for fraudulent inducement to contract, conspiracy to defraud, and bad faith. (See Amended Verified Complaint, Docket No. 4, p.2). Appearing defendant, hereby contend that the instant complaint fails to state a cognizable Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 1 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 2 claim upon which relief can be granted against appearing defendant and for the reasons that will be explained herein, this Honorable Court ought to DISMISS WITH PREJUDICE the same. II. LEGAL STANDARD Federal Rule of Civil Procedure 12(b)(6) allows a defendant to assert the defense of failure to state a claim upon which relief can be granted, before pleading, if a responsive pleading is allowed. Pursuant to Federal Rule of Civil Procedure 12(b)(6), a complaint may not be dismissed unless it appears beyond doubt that plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Brown v. Hot, Sexy and Safer Products, Inc., 68 F.3d 252, 530 (1 st Cir. 1995). The Court accepts all well pleaded-factual allegations as true, and indulges all reasonable inferences in Plaintiff’s favor. Nisselson v. Lernout, 469 F.3d 143, 150 (1 st Cir. 2006). The Court need not credit, however, “bald assertions, unsupportable conclusions, periphrastic circumlocutions, and the like” when evaluating the Complaint’s allegations. See Aulson v. Blanchard, 83 F3d 1, 3 (1 st Cir. 1996). When opposing a Rule 12(b)(6) motion, “a plaintiff cannot expect a trial court to do his homework for him.” McCoy v. Massachusetts Institute of Technology, 950 F2d 13, 22 (1 st Cir. 1991). Plaintiffs are responsible for putting their best foot forward in an effort to present a legal theory that will support their claim. Id., at 23. Plaintiff must set forth “factual allegations, either direct or inferential, regarding each material element necessary to sustain recovery under actionable theory.” Gooley v. Mobil Oil Corp., 851 F.2d 513, 514 (1 st Cir 1988). A complaint is properly dismissed for failure to state a claim “only if the facts lend themselves to no viable theories of recovery.” Luc v. Wyndham Management Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 2 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 3 Corp., 496 F3d 85, 88 (1 st Cir. 2007). The Supreme Court recently clarified the law with respect to a plaintiff’s pleading requirement in order to survive a Rule 12(b)(6) motion. To survive a motion to dismiss for failure to state a claim, a complaint must contain factual allegations sufficient to “raise a right to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1965 (2007). 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.” Id., at 1964-65. The Supreme Court further explained that the “[f]actual allegations 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”. Id. at 1965. Subsequently, the Supreme Court reiterated that “[s]pecific facts are not necessary; the statements need only ‘give the defendants fair notice of what the ... claim is and the grounds upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 127 S.Ct. 2197, 2200, 167 L.Ed.2d 1081 (2007) (quoting Twombly, 127 S.Ct. at 1964). In so doing, the court accepts as true all well-pleaded facts and draws all reasonable inferences in the plaintiff’s favor. Parker v. Hurley, 514 F.3d 87, 90 (1 st Cir. 2008). Under Twombly, the factual allegations which are assumed to be true must do more than create speculation or suspicion of a legally cognizable cause of action; they must demonstrate the plausibility of entitlement to relief. Twombly, 550 U.S. at 555, 557. Accord, Sanchéz v. Pereira- Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 3 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 4 Castillo, 590 F.3d 31, 41 (1 st Cir. 2009); and MVM Inc. v. Rodríguez, 568 F. Supp. 2d 158, 167 (D.P.R. 2008). The Supreme Court further observed in Twombly that Federal Rule of Civil Procedure 8(a)(2) does require a “showing” that a plaintiff is entitled to relief and that this substantive threshold is not achieved by “blanket assertion[s].” 550 U.S. at 556, n. 3. However, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949 (2009). “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555). “[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.’” Iqbal, 129 S. Ct. at 1950 (quoting Fed.R.Civ.P. 8(a)(2)). To make this determination, the court employs a two-pronged approach. Ocasio- Hernández v. Fortuño-Burset, 640 F.3d 1, 12 (1 st Cir. 2011). The court first screens the complaint for statements that “merely offer legal conclusions couched as fact or threadbare recitals of the elements of a cause of action.” Id. (citations, internal quotation marks and alterations omitted). A claim consisting of little more than “allegations that merely parrot the elements of the cause of action” may be dismissed. Id. The second part of the test requires the court to credit as true all non-conclusory factual allegations and the reasonable inferences drawn from those allegations, and then to determine if the claim is plausible. Id. The plausibility requirement “simply calls for enough fact to raise a reasonable expectation that discovery will Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 4 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 5 reveal evidence” of illegal conduct. Twombly, 550 U.S. at 556. The “make-or-break standard” is that those allegations and inferences, taken as true, “must state a plausible, not a merely conceivable, case for relief.” Sepúlveda-Villarini v. Dep't of Educ., 628 F.3d 25, 29 (1 st Cir. 2010); see Twombly, 550 U.S. at 555 (“Factual allegations 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).” (citations and footnote omitted)). Evaluating the plausibility of a claim is a “context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679, 129 S.Ct. at 1950. In doing so, the court may not disregard properly pleaded factual allegations or “attempt to forecast a plaintiff's likelihood of success on the merits.” Ocasio-Hernández, 640 F.3d at 13. “The relevant inquiry focuses on the reasonableness of the inference of liability that the plaintiff is asking the court to draw from the facts alleged in the complaint.” Id. III. APPLICABLE LAW AND ANALYSIS A. Damages for Copyright Infringement Against the PRDOE 1. Plaintiffs’ lack of standing The elements of a claim of copyright infringement are simple and familiar. The plaintiff in a copyright infringement action must show "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S. Ct. 1282, 113 L. Ed. 2d 358 (1991). Copyright ownership under the Copyright Act vests initially in the author or authors of the work. 17 U.S.C.S. § 201(a). Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 5 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 6 In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of the Copyright Act and owns all the rights in the copyright. 17 U.S.C.S. § 201(b). Thus, although, as a general rule, the author is the party who actually creates the work, the Copyright Act carves out an important exception for works made for hire. If the work is for hire, the employer or other person for whom the work was prepared is considered the author and owns the copyright unless there is a written agreement to the contrary. 17 U.S.C.S. § 201(b). Sierra-Pascual v. Pina Records, Inc., 660 F. Supp. 2d 196, 198 (D.P.R. 2009) To hold a defendant liable for copyright infringement, a plaintiff must show that (1) she has properly registered a copyright, (2) that she owns a valid copyright, and (3) that the defendant copied "constituent elements of the work that are original." Airframe Sys., 658 F.3d at 105-106 (quoting Situation Mgmt., 560 F.3d at 58). A plaintiff bears the burden of proof on these elements. Molinelli-Freytes v. Univ. of P.R., 2012 U.S. Dist. LEXIS 143314, *38 (D.P.R. Feb. 15, 2012) Under the Copyright Act, the owner of a copyright has the exclusive right to copy, distribute or display his work. See 17 U.S.C. § 106. The owner of a copyright can transfer ownership of the copyright by selling it or by exclusively licensing it. See id. § 101. Exclusive licenses, however, must be in writing. See id. § 204 (a). (Emphasis added) Notwithstanding, while 17 U.S.C. § 204 provides that all transfers of copyright ownership, including transfers by exclusive license, must be in writing, a nonexclusive license is expressly removed from the scope of section 204 because a nonexclusive license does not amount to a "transfer" of ownership. See Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 6 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 7 17 U.S.C. § 101; John G. Danielson, Inc. v. Winchester-Conant Properties, Inc., 322 F.3d 26, 40 (1st Cir. 2003). In the instant case, Plaintiffs’ have not pled that they are owners of the alleged copyrighted material or that they hold an exclusive license to sue for copyright infringement. A person holding a nonexclusive license to exercise one or more of the rights set forth in section 106 may not sue for infringement. Plaintiffs allege that they hold a license to valid copyrights to the UbD model by virtue of the UbD License Agreement. (See Amended Verified Complaint, Docket No. 4, p.58, ¶319) However, license to use copyright material it’s not a sine qua non that it has standing to bring suit. By Plaintiffs’ own admission, they do not hold ownership of the only copyrighted material alleged in the complaint… “The UbD® model was developed by Jay McTighe and Professor Wiggins” and “The copyright on the UbD® model is jointly held by Authentic Education and Backward Design”(See Amended Verified Complaint, Docket No. 4, p.25, ¶122, ¶124). Suffice to say, that none of the mentioned owners are plaintiffs in this case. Thus, Plaintiff’s Copyright infringement claim does not crosses the plausibility threshold needed to survive this motion to dismiss. 2. 17 U.S. Code § 110(1) The US Copyright Law provides several exemptions for the educational use of copyrighted materials. If the requirements for an exemption are met, it is not necessary to seek permission before using the copyrighted material for the purpose outlined in the exemption. Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 7 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 8 17 U.S. Code § 110 - Limitations on exclusive rights: Exemption of certain performances and displays Notwithstanding the provisions of section 106, the following are not infringements of copyright: (1)performance or display of a work by instructors or pupils in the course of face-to-face teaching activities of a nonprofit educational institution, in a classroom or similar place devoted to instruction, unless, in the case of a motion picture or other audiovisual work, the performance, or the display of individual images, is given by means of a copy that was not lawfully made under this title, and that the person responsible for the performance knew or had reason to believe was not lawfully made; Section 110 (1) exempts face to face classroom performances or displays of all kinds of copyrighted works for teaching purposes in a nonprofit educational institution. This capacious exemption allows both teachers and student to show any kind of work without limitation as to its nature, in a nonprofit instructional setting. Where the exception applies, it allows a maximum flexibility and spontaneity because it imposes no transactions costs on its implementation. Allows performance or display of protected material in a face-to-face teaching setting and must be in a classroom and at a non-profit educational institution. This is an exception to the exclusive rights of performance and display, but not the right of reproduction. However, copying may still be allowed by fair use. Performance and display in the classroom must employ a legally obtained copy - no “bootleg” copy is eligible for this exception, but borrowed copies are OK. The use of the exemption in Section 110(1) of the Copyright Act to the facts of the instant case makes evident that no copyright infringement can be held against Codefendants. The use of the alleged copyright material by Codefendants is not consider a copyright infringement because Section 110 (1) of the Copyright Act allows the use of copyrighted material for display Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 8 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 9 of a work by instructors or pupils in the course of face-to-face teaching activities of a nonprofit educational institution, in a classroom or similar place devoted to instruction. The application of the exemption in Section 110(1) of the Copyright Act to the case at bar, clearly establishes that no copyright infringement can be held against Codefendants. B. Lanham Act Claim Under the Lanham Act, a trademark includes any word, name, symbol, or device or any combination thereof used by an individual or entity to identify and distinguish his or her goods from those manufactured or sold by others. 15 U.S.C.S. § 1127. Trademark rights may arise under either the Lanham Act or under common law, but in either circumstance, the right is conditioned upon use in commerce. A mark is deemed in use in commerce when it is affixed to the goods with which it is associated and those goods are then sold or transported in commerce. 15 U.S.C.S. § 1127. Sales of goods within or from the United States are not necessary to establish trademark ownership; for purposes of the Lanham Act, transportation alone qualifies. Gen. Healthcare Ltd. v. Qashat, 364 F.3d 332, 333 (1st Cir. Mass. 2004) In Quabaug Rubber Co. v. Fabiano Shoe Co., Inc., 567 F.2d 154, 160 (1st Cir. 1977), we held that the dispositive question in determining whether a plaintiff is a proper person to bring a claim under the Lanham Act, is whether the plaintiff has a reasonable interest in being protected against false advertising. 567 F.2d at 160. Other circuits have also adopted this approach and there appears to be a general consensus that the plaintiff does not have to be a competitor in order to have standing to sue. See Colligan v. Activities Club of New York, Ltd., 442 F.2d 686, 692 (2d Cir.), cert. denied, 404 U.S. 1004, 92 S. Ct. 559, 30 L. Ed. 2d 557, 172 U.S.P.Q. (BNA) Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 9 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 10 97 (1971); Smith v. Montoro, 648 F.2d 602, 607 (9th Cir. 1981); Thorn v. Reliance Van Co., Inc., 736 F.2d 929, 933 (3rd Cir. 1984). The requirement that the plaintiff have a reasonable interest in being protected, however, does not mean that it is sufficient for the plaintiff merely to establish a falsehood in the defendant's advertising or marketing; the plaintiff must also show a link or "nexus" between [*12] itself and the alleged falsehood. Quabaug Rubber, 567 F.2d at 160. Camel Hair & Cashmere Inst. of Am., Inc. v. Associated Dry Goods Corp., 799 F.2d 6, 11- 12 (1st Cir. Mass. 1986) In the trademark context, standing to bring suit under the Lanham Act is conferred to those who have an ownership interest in a registered trademark, or, for those with unregistered marks, those who have a reasonable interest that could be harmed by infringement. Ownership interest, relevant for registered trademarks, has been interpreted to limit standing only to registered owners or exclusive licensees of a trademark. Ahmed v. Hosting.Com, 28 F. Supp. 3d 82, 84 (D. Mass. 2014) The instant complaint mentions only of one trademark that was allegedly affected by the Codefendants actions… “UbD® is a registered trademark of Authentic Education, Inc., and Backward. Design, Inc. (owned by Jay McTighe) (“Backward Design”).” (See Amended Verified Complaint, Docket No. 4, p.58, ¶319) Again, by Plaintiffs own admission, they are not the owners of the alleged registered trademark. Moreover, Plaintiffs have not pled that they have an exclusive license that gives them a right to sue. Jurisdiction must be present when complaint is filed. Parties should possess a right before seeking to have them vindicated in court. Ahmed v. Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 10 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 11 Hosting.Com, 28 F. Supp. 3d 82, 84 (D. Mass. 2014). Consequently, this court MUST DISMISS WITH PREJUDICE Plaintiffs’ Lanham Act claim because of lack of jurisdiction. C. For Violation of Plaintiffs’ Civil Rights by Defendants Roman-Melendez and Valentin-Gonzalez Section 1983 in itself does not create substantive rights, but merely provides a venue for vindicating federal rights elsewhere conferred. Graham v. M.S. Connor, 490 U.S. 386 (1989). It creates a private right of action for redressing abridgments or deprivations of federally assured rights. Cox v. Hainey, 391 F.3d 25, 29 (1st Cir.2004); McIntosh v. Antonino, 71 F.3d 29, 33 (1st Cir.1995); Evans v. Avery, 100 F.3d 1033, 1036 (1st Cir.1996). In order to state a valid claim under 42 U.S.C. § 1983, three elements must be alleged before it becomes cognizable. First, that the conduct complained of was committed by a person acting “under color of state law.” See, Gómez v. Toledo, 446 U.S. 635, 640 (1980), also, Gutiérrez Rodríguez v. Cartagena, 882 F.2d 553 (1st Cir. 1989). Secondly, a plaintiff must allege facts sufficient to conclude that the alleged conduct worked a denial of rights secured by the Constitution or laws of the United States. See, Cepero-Rivera v. Fagundo, 474 F.3d 124 (1st Cir. 2005). A section 1983 violation occurs when an official acting under color of state law, acts to deprive an individual of a federally protected right. Maymi v. Puerto Rico Ports Authority, 515 F.3d 20, 25 (1st Cir.2008). As a third element, plaintiff must prove that the defendant was personally and directly involved in causing the violation of the plaintiff[s’] federally protected rights. This Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 11 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 12 third element requires a showing of a causal connection between the specific defendant and plaintiff[s’] federal rights deprivation. See Wilson v. City of North Little Rock, 801 F.2d 316, 322 (8th Cir. 1986);Coon v. Ledbetter, 780 F.2d 1158, 1161 (5th Cir. 1986). This personal involvement may consist of direct acts by the defendant, certain acts performed at defendant[s’] direction or knowledge and consent. Therefore, each defendant individually responds for his own acts and omissions in light of his own duties. See Rizzo v. Goode, 423 U.S. 362, 370, 96 S.Ct. 598, 46 L.Ed. 2d 561 (1976); Monell v. New York Dept. of Social Services, 436 U.S. 658, 98 S. Ct. 2018, 56 L.Ed.2d 611 (1978). Plaintiffs must show that defendant’s actions were in fact the cause of the alleged constitutional deprivation. Gagliardi v. Sullivan, 513 F.3d 301, 306 (1st Cir.2008) (citing Rodriguez-Cirilo v. Garcia, 115 F.3d 50, 52 (1st Cir.1997)). A plaintiff is required to allege personal action or inaction by each defendant within the scope of their responsibility that would make each of them personally answerable in damages pursuant to section 1983. See Pinto v.Nettleship, 737 F. 2d 130, 133 (1st Cir. 1984). 1. There are no plausible allegations that implicate § 1983 claim In respect with Plaintiffs Fifth Amendment and Fourteenth Amendment property seizure and takings claims, there are no plausible allegation in the complaint that Codefendants engaged in action which would implicate a § 1983 claim. Basically, Plaintiffs are claiming violations of their rights under the Fifth and Fourteenth Amendments, by “taking” their property without due process of law and without just compensation. (See Amended Verified Complaint, Docket No. 4, p.63, ¶339) However, the facts in the complaint do not set forth a valid claim for the individual Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 12 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 13 plaintiffs because throughout the complaint the property that is allegedly seized is purportedly to be that of owners that are not the plaintiffs in this complaint. In anticipation of the execution of the PREPARA Contract, EPI negotiated a “UbD®/BDTM LICENSE AGREEMENT with Backward Design, the co-owner of the UbD® model trademark and other intellectual property with Authentic Education (the “UbD® License Agreement”). (See Amended Verified Complaint, Docket No. 4, p.39, ¶217). The complaint makes no mention that any of the property belongs to either personal capacity plaintiffs. Moreover, these allegations do not state a constitutional claim because they are of a contractual nature. In Redondo-Borges v. United States HUD, 421 F.3d 1 (1st Cir. 2005), this court noted that as a general matter,”[w]e have held with a regularity bordering on the echolalic that a simple breach of contract does not amount to an unconstitutional deprivation of property. . . . To hold otherwise would run the risk of transmogrifying virtually every dispute involving an alleged breach of contract by a state or a state agency into a constitutional case." Id. at 10. This principle is well-established in other circuits as well. These cases appear to rest on either of two distinct propositions. In the first category, some cases have held that not all contract rights constitute property protected by the Constitution. See, e.g., Linan-Faye Constr. Co. v. Hous. Auth. of Camden, 49 F.3d 915, 931-32 (3d Cir. 1995); Unger, 928 F.2d at 1399; Yatvin, 840 F.2d at 417. Other cases recognize that contract rights can be property for constitutional purposes, and are protected against government [*10] actions taken in the government's sovereign capacity, for example, by a statute eliminating certain contractual rights. See, e.g., Cienega Gardens v. United States, 331 F.3d 1319, 1353 (Fed. Cir. 2003) (holding that the Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 13 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 14 enactment of ELIHPA and LIHPRHA, which eliminated some contractual rights, in the circumstances of that case "effect[ed] a compensable taking"). A second category of cases holds that HN8 even if a private party's contract rights constitute property, the exercise of contractual rights by a governmental contracting-party does not give rise to a constitutional claim. See, e.g., B & B Trucking, 406 F.3d at 769; Hughes Commc'ns, 271 F.3d at 1070.Massó-Torrellas v. Municipality of Toa Alta, 2017 U.S. App. LEXIS 367, *9-10 (1st Cir. P.R. 2017) In the case at bar, Plaintiffs are attempting to stealthy sneak into a § 1983 claim in order to access federal jurisdiction. Even a generous reading of the complaint reflects that there are no specific facts that allow for an understanding that a constitutional right was violated in in order to invoke § 1983. No rights have been infringed. In Hughes Commc’ns Galaxy, Inc. v. United States, 271 F.3d 1060, 1070 (Fed. Cir.2001) (holding that “[t]aking claims rarely arise under government contracts because the Government acts in its commercial or proprietary capacity in entering contracts, rather than in its sovereign capacity. Accordingly, remedies arise from the contracts themselves, rather than from the constitutional protection of private property rights.”). Thus, unless every breach of every public contract is to be actionable as a violation of constitutional rights, it is necessary to distinguish between mere contract rights" and constitutional property rights (internal citations and quotation marks omitted)); Monolith Portland Midwest Co. v. Reconstruction Fin. Corp., 282 F.2d 439, 447 (9th Cir. 1960) (holding that "[t]ermination of the [government] contract . . . frustrated [appellant] in obtaining anticipated profits and advantages therefrom. But, . . . [f]rustration and appropriation are essentially different things. There was here no taking of [appellant's] property which entitled the Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 14 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 15 company to just compensation under the Fifth Amendment" (citation omitted)); Brasier v. United States, 223 F.2d 762, 766 (8th Cir. 1955) (holding that a termination of a government contract does not constitute "a taking of the plaintiff's property without just compensation or without due process of law"). Massó-Torrellas v. Municipality of Toa Alta, 2017 U.S. App. LEXIS 367, *9 (1st Cir. P.R. 2017) Additionally, Plaintiff's Fifth Amendment claims should be dismissed because the Fifth Amendment applies to actions by the federal government. It has long been established that the Fifth Amendment applies to actions of the federal government, not those of private individuals, nor of state governments. Public Utilities Commission v. Pollak, 343 U.S. 451, 72 S.Ct. 813, 96 L.Ed. 1068 (1952); Gerena v. Puerto Rico Legal Services, Inc., 697 F.2d 447, 449 (1983). There are no federal actors present as parties in this case, nor has any federal action or lack thereof been alleged. Therefore, because the Fifth Amendment is not applicable in the instant case, plaintiff’s Fifth Amendment claims should be dismissed. See also, Medina Díaz v. González Rivera, 371 F.Supp.2d 77, 83 (DPR 2005). Therefore, it is respectfully requested that this Honorable Court dismiss with prejudice the cause of action under the Fifth Amendment. Another aspect to the Fourteenth Amendment is substantive due process. To establish a violation of substantive due process rights as to these defendants their actions must be shown to be arbitrary, or conscience shocking, “in a constitutional sense." County of Sacramento v. Lewis, 523 U.S. 833, 847, 118 S. Ct. 1708, 140 L. Ed. 2d 1043 (1998). The substantive due process guarantee sets forth a shield to protect individuals from particularly offensive actions on the part of government officials, even when the government purports to employ neutral procedures in Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 15 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 16 carrying out their chosen personnel action. Daniels v. Williams, 474 U.S. 327, 331, 106 S. Ct. 662, 88 L. Ed. 2d 662 (1986). "In order to shock the conscience, conduct must at the very least be 'truly outrageous, uncivilized, and intolerable’. Hasenfus v. LaJeunesse, 175 F.3d 68, 72 (1st Cir. 1999). The courts have shown that conscience shocking conduct has been found in cases involving physical or psychological abuse, or significant interference with a protected relationship. See Rochin v. California, 342 U.S. 165, 72 S. Ct. 205, 96 L. Ed. 183 (1952) (forcibly pumping suspect's stomach for drugs); Harrington v. Almy, 977 F.2d 37 (1st Cir. 1992) (conditioning employment on taking highly intrusive physical test of sexual arousal); Grendell v. Gillway, 974 F.Supp 46 (D.Me. 1997) (officer told girl that her parents would be arrested and she would be in trouble if she did not inform officers her parents' drug use). Submission to a psychological examination was not shocking given the responsibility required of the Board and held that even if justification is “at the heart of the case” See Berthiaume v. Caron, 142 F.3d 12, 16 (1st Cir. Me. 1998) To establish a violation of substantive due process rights as to these defendants their actions must be shown to be arbitrary, or conscience shocking, “in a constitutional sense." County of Sacramento v. Lewis, 523 U.S. 833, 847, 118 S. Ct. 1708, 140 L. Ed. 2d 1043 (1998). It has been rejected by the First Circuit that the substantive due process "shock the conscience" caselaw does not apply in those cases that there has been a deprivation of property. Maldonado v. Fontanes, 568 F.3d 263 (1st Cir. P.R. 2009) The First Circuit expressed that they “..would be reluctant to conclude that deprivations of property cannot ever be so shocking in their effect on the person as to lead to a Fourteenth Amendment substantive due process Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 16 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 17 violation.” Id. At 272 The official conduct "most likely to rise to the conscience-shocking level" is "conduct intended to injure in some way unjustifiable by any government interest." Id. at 273 (Citing Chavez v. Martinez, 538 U.S. 760, 766, 123 S. Ct. 1994, 155 L. Ed. 2d 984 (2003)) Nothing alleged in the complaint in any way shocks the conscious or even suggests wrong doing. There being no factual averments to sustain a due process violation, this Honorable Court MUST DISMISS WITH PREJUDICE. 2. Claims against the Codefendants must be dismissed on Eleventh Amendment grounds The Eleventh Amendment to the United States Constitution provides: [t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State. U.S. Const. Am. XI. Although the Eleventh Amendment literally seems to apply only to suits against a State by citizens of another State, the Supreme Court has consistently extended the scope of this Amendment to suits by citizens against their own State. See Board of Trustees of the Univ. of Ala. v. Garrett, 121 S. Ct. 955, 962 (2001); see also Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 72-73 (2000); Hans v. Louisiana, 134 U.S. 1, 15 (1890). Even though the Commonwealth of Puerto Rico is not a state, it enjoys the protection of the Eleventh Amendment. See Jusino Mercado v. Commonwealth of Puerto Rico, 214 F.3d 34, 37 (1st Cir. 2000); Ortiz Feliciano v. Toledo Dávila, 175 F.3d 37, 39 (1st Cir. 1999); Futura Development v. Estado Libre Asociado, 144 F.3d 7,12-13 (1st Cir. 1998); Culebras Enters. Corp. v. Rivera Ríos, 838 F.2d 506, 516 (1st Cir. 1987); Ramírez v. Puerto Rico Fire Servs., 715 F.2d Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 17 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 18 694, 697 (1st Cir. 1984). The Eleventh Amendment bar extends to governmental instrumentalities, which are an arm or “alter ego” of the State. See Ainsworth Aristocrat Int’l Pty. Ltd. v. Tourism Co. of P.R., 818 F.2d. 1034, 1036 (1st Cir. 1987); Ochoa Realty Corp. v. Faría, 618 F. Supp. 434, 435 (D.P.R. 1985); Pennhurst State Sch. Hosp. v. Halderman, 465 U.S. 89, 100 (1984); Mt. Healthy City Sch. Dist. v. Doyle, 429 U.S. 274, 280- 281 (1977); Ursulich v. P.R. Nat’l Guard, 384 F. Supp. 736, 737-38 (D.P.R. 1974). In addition, the Eleventh Amendment also protects state officials in their official capacity. The rationale behind this extension of the Eleventh Amendment protection is that a claim against a state official in his or her official capacity, for monetary relief, is an action for the recovery of money from the State. Ford Motor v. Dept. of Treasury, 323 U.S. 459 (1945); Will v. Michigan Dept. of State Police, 109 S. Ct. 2304 (1989). Hence, a claim against a state official in his official capacity for monetary relief is, in essence, a claim against the State. “It is well settled ‘that neither a state agency nor a state official acting in his official capacity may be sued for damages in a section 1983 action,’” Wang v. New Hampshire Bd. of Registration in Medicine, 55 F.3d 698, 701 (1st Cir. N.H. 1995) (citing Johnson v. Rodriguez, 943 F.2d 104, 108 (1st Cir. 1991)); see also Bettencourt v. Bd. Of Registration In Med. Of Mass., 904 F.2d 772, 781 (1st Cir. 1990). Considering the above, Codefendants are entitled to Eleventh Amendment immunity as officers of the Commonwealth of Puerto Rico are entitled to Eleventh Amendment Immunity in their official capacities. Thus, this Honorable Court should DISMISS WITH PREJUDICE all money damages claims against the defendants in their official capacity. Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 18 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 19 3. Plaintiffs’ 42 U.S.C.S. § 1983 claims are preempted by the Copyright Act If by this stage this Honorable Court has not dismissed Plaintiffs’ Copyright claim, then Defendants move this court to dismiss the 42 U.S.C.S. § 1983 claim because they are preempted by the Copyright Act. 42 U.S.C.S. § 1983 does not create independent substantive rights, but, rather, supplies a vehicle by which a plaintiff may sue government actors acting under color of state authority who have deprived him or her of a constitutional or statutory right. Therefore, in order to state a claim under § 1983, a plaintiff must allege (1) the violation of a right protected by the Constitution or laws of the United States and (2) that the perpetrator of the violation was acting under color of law. Molinelli-Freytes v. Univ. of Puerto Rico, 727 F. Supp. 2d 60, 61 (D.P.R. 2010) 42 U.S.C.S. § 1983 does not create independent substantive rights, but, rather, supplies a vehicle by which a plaintiff may sue government actors acting under color of state authority who have deprived him or her of a constitutional or statutory right. Therefore, in order to state a claim under § 1983, a plaintiff must allege (1) the violation of a right protected by the Constitution or laws of the United States and (2) that the perpetrator of the violation was acting under color of law. Molinelli-Freytes v. Univ. of Puerto Rico, 727 F. Supp. 2d 60, 61 (D.P.R. 2010) The Copyright Act of 1976, as amended, 17 U.S.C.S. § 101 et seq., is intended to be a uniform body of law for the protection and enforcement of intellectual property. It seeks to achieve this goal by mandating that a copyright holder has the exclusive rights of reproduction, preparation of derivative works, distribution, performance, and display and that any act that is Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 19 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 20 inconsistent with a copyright holder's exclusive rights constitutes infringement. The persons whose rights are protected by the Copyright Act, therefore, are a select group who hold copyrights to intellectual property. This group is considerably more narrow than the general category of property owners protected by the Fourteenth Amendment. Molinelli-Freytes v. Univ. of Puerto Rico, 727 F. Supp. 2d 60, 61 (D.P.R. 2010) The Copyright Act of 1976, as amended, 17 U.S.C.S. § 101 et seq., provides a comprehensive and detailed damages scheme which limits a prevailing plaintiff in a copyright infringement case to either recovering actual damages or statutory damages, along with damages which a court may impose at its discretion where an infringement is committed willfully. 17 U.S.C.S. § 404. In contrast, a 42 U.S.C.S. § 1983 plaintiff may recover punitive damages where a defendant's conduct is shown to be motivated by evil motive or intent, or when it involves reckless or callous indifference to the federally protected rights of others. When the U.S. Congress enacted the Copyright Act of 1976, as amended, 17 U.S.C.S. § 101 et seq., it intended for the Act to preempt 42 U.S.C.S. § 1983 claims based upon the same actions underlying the Copyright Act claim. Molinelli-Freytes v. Univ. of Puerto Rico, 727 F. Supp. 2d 60, 61 (D.P.R. 2010) Therefore, as a suit for violation of due process rights under §1983 has no such registration requirement, allowing a plaintiff who has not registered to proceed with a §1983 claim for actions constituting copyright infringement would nullify the registration requirement in cases where the state is a defendant. Such a circumvention of the registration requirement would thus result in an enlargement of the group protected by the very Copyright Act which Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 20 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 21 specifies the rights granted to copyright holders. This weighs heavily towards a finding that Congress intended for the Act to preempt §1983 claims. See Dodd v. Ft. Smith School Dist., 666 F.Supp. 1278 (W.D.Ark.1987). Molinelli-Freytes v. Univ. of Puerto Rico, 727 F. Supp. 2d 60, 66 (D.P.R. 2010) In the instant case, Plaintiffs have brought suit under the Copyright Act and a Section 1983 claim. It is clear that the factors for determining whether plaintiffs who allege violations of a statute may bring an action under § 1983 in lieu of or in addition to an action under said statute, as enunciated by the Supreme Court, all weigh in favor of preemption in this case. Accordingly, Plaintiffs’ § 1983 claims are preempted by the Copyright Act. Consequently, this Honorable MUST DISMISS WITH PREJUDICE Plaintiffs’ claim under 42 U.S.C.S. § 1983 because they have failed to state a cognizable claim. D. Pendant Jurisdiction Codefendants move the court to defer any surviving supplemental jurisdiction to the state courts that are better suited to apply local state law to the facts of this case. Pendent jurisdiction exists whenever there is a claim arising under the Constitution, the Laws of the United States, and treaties made under their authority and the relationship between that claim and the state claim can be found to constitute, but one constitutional case; state claims must be linked to federal claim by a common nucleus of operative facts, and must be sufficiently substantial to confer federal court jurisdiction. United Mine Workers of America v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966) In deciding whether or not to retain jurisdiction on Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 21 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 22 state-law claims after a dismissal of all claims over which the trial court has original jurisdiction, the trial court must take into consideration concerns of comity, judicial economy, convenience and fairness. See Rodríguez v. Doral Mortgage Corp., 57 F.3d 1168, 1177 (1st Cir. 1995); Vera- Lozano v. Int’l Broad., 50 F.3d 67, 70 (1st Cir. 1995). District courts may decline to exercise supplemental jurisdiction over a claim if the district court has dismissed all claims over which it has original jurisdiction. 28 U.S.C. § 1367(c)(3); see also, Rodriguez v. Doral Mortgage Corp., 57 F.3d 1168, 1177 (1st Cir.1995);Newman v. Burgin, 930 F.2d 955, 963 (1st Cir.1991) (holding that “[t]he power of a federal court to hear and to determine state-law claims in non-diversity cases depends upon the presence of at least one “substantial” federal claim in the lawsuit.”). Medina-Medina v. Puerto Rico, 769 F. Supp. 2d 77, 82 (D.P.R. 2011) Therefore, if at this juncture there are any surviving Pendent state-law claim, this Honorable Court should dismissed with prejudice any Pendent state-law claims against the appearing defendants pursuant to 28 U.S.C. sec. 1367(c)(3). IV. CONCLUSION AND PRAYER WHEREFORE, without submitting to the jurisdiction of the Court and/or waiving any affirmative defenses, the appearing Defendants respectfully prays that this Honorable Court DISMISS the instant Complaint WITH PREJUDICE IN ITS ENTIRETY because Plaintiffs have failed to state a claim upon which relief can be granted. Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 22 of 23 MOTION TO DISMISS Editorial Panamericana, Inc. et al v. The Commonwealth of Puerto Rico, et al Civil No. 16-3086 (FAB) 23 IT IS HEREBY CERTIFY that on this same date I electronically filed the foregoing using the CM/ECF system which will send notification of such filing to all parties of record. RESPECTFULLY SUBMITTED In San Juan, Puerto Rico on this 9 th day of February, 2017. WANDA VÁZQUEZ GARCED Secretary of Justice WANDYMAR BURGOS VARGAS Acting Deputy Secretary in Charge of Litigation and Acting Director of Federal Litigation Division Department of Justice S/JOEL TORRES ORTIZ Joel Torres Ortiz U.S.D.C. NO. 302311 Federal Litigation Division Department of Justice P.O. Box 9020192 San Juan, P.R., 00902-0192 Tel. (787) 721-2900, ext. 2647,2650,2624,2606 Fax (787) 723-9188 joeltorres@justicia.pr.gov Case 3:16-cv-03086-FAB Document 12 Filed 02/09/17 Page 23 of 23