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Broadcast Music, Inc. v. Mooney Hollow Saloon LLC

United States District Court, N.D. Iowa, Eastern Division

September 3, 2014

BROADCAST MUSIC, INC.; COTILLION MUSIC, INC.; TERRY STAFFORD MUSIC CO.; HOUSE OF CASH, INC.; WBM/HOUSE OF GOLD MUSIC, INC. d/b/a WARNER HOUSE OF MUSIC; POMMARD PUBLISHING CO.; SUNFLOWER COUNTY SONGS; UNIVERSAL — SONGS OF POLYGRAM INTERNATIONAL, INC.; SONY/ATV SONGS LLC d/b/a SONY/ATV TREE PUBLISHING, Plaintiffs,
v.
MOONEY HOLLOW SALOON LLC d/b/a MOONEY HOLLOW SALOON/MOONEY HOLLOW BARN and KEVIN R. PETESCH, individually, Defendants.

ORDER DENYING MOTION TO DISMISS

JON STUART SCOLES, Chief Magistrate Judge.

This matter comes before the Court on the Motion to Dismiss Civil Action Against Kevin R. Petesch, Individually (docket number 38) filed by Defendant Kevin R. Petesch on July 15, 2014, and the Resistance (docket number 46) filed by the Plaintiffs on August 1. Pursuant to Local Rule 7.c, the motion will be decided without oral argument.

I. BACKGROUND

On December 9, 2013, Plaintiffs (referred to collectively as "BMI") filed a verified complaint against Defendants Mooney Hollow Saloon LLC and Kevin R. Petesch, individually. BMI claims Defendants willfully violated Plaintiffs' copyrights. Specifically, BMI asserts that on March 11, 2012, five copyrighted songs were publicly performed at the Mooney Hollow Saloon/Mooney Hollow Barn.

The complaint asserts that Defendant Kevin R. Petesch is president of Mooney Hollow Saloon, LLC, with "primary responsibility for the operation and management" of the establishment known as Mooney Hollow Saloon/Mooney Hollow Barn.[1] The complaint further alleges that Petesch "has the right and ability to supervise the activities" of the LLC and has a "direct financial interest" in the company.[2] In his answer filed on July 14, Petesch denies that he is president of the company with primary responsibility for its operation and management. Petesch admits that he is a member of the LLC, but his answer is unclear regarding his responsibilities:

The Defendants admits that Defendants Kevin R. Petesch is a member of Defendants Mooney Hollow Saloon, LLC with the only member responsibility for the operation and management of that limited liability company in the management and sales operation of alcohol and not the Establishment known as Mooney Hollow Saloon/Mooney Hollow Barn.

Answer of Kevin R. Petesch (docket number 34) at 6, ¶ 16.

Petesch's response to paragraph 17 is equally confusing. First, Petesch admits that he is a member of the LLC and "has the rights and ability only to supervise the activities" of the LLC and has "a direct financial interest only in that limited liability company." In the following sentence, however, Petesch states" [t]he Defendants denies that Defendants Kevin R. Petesch as a member of the Mooney Hollow Saloon, LLC has a direct financial interest in the Establishment known as Mooney Hollow Saloon/Mooney Hollow Barn."[3]

In his "defenses, " Petesch asserts that "[t]he physical location and daily and weekly operation of Mooney Hollow Saloon, LLC doing business as Mooney Hollow Saloon was closed in March 2011."[4] In his "third defense, " Petesch admits that he is a member of Mooney Hollow Saloon, LLC and "is only responsible for the management and sales operation of Alcohol as licensed by the state of Iowa, Liquor License."

II. DISCUSSION

Petesch filed his motion to dismiss pursuant to FEDERAL RULES OF CIVIL PROCEDURE 12(b)(2)and 12(b)(6). Petesch asks that he be dismissed individually from this lawsuit. Petesch argues that a member of a limited liability company is not liable, solely by reason of being a member, for the obligations of the limited liability company. BMI responds that it "does not allege liability on the part of Mr. Petesch simply by virtue of his employment with Mooney Hollow Saloon." Rather, BMI claims that Petesch "is liable because of his own infringing activity."

FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) authorizes a pre-answer motion to dismiss for "failure to state a claim upon which relief can be granted."[5] When considering a motion to dismiss, the Court must "accept as true all factual allegations in the complaint and draw all reasonable inferences in favor of the nonmoving party." Richter v. Advance Auto Parts, Inc., 686 F.3d 847, 850 (8th Cir. 2012). Accordingly, for purposes of this motion, the Court accepts as true the allegations found in BMI's complaint.

The purpose of RULE 12(b)(6) is not to resolve factual issues, or decide the merits of the case, but is instead intended to test whether the plaintiffs have adequately pled a valid legal theory.

"To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (internal quotation omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to ...

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