Misut v. Curtana Holdings LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
MUAMER MISUT, 	§
§
Plaintiff-Counterdefendant, 	§
§
VS. 	§ 	Civil Action No. 3:25-CV-2006-D
§
CURTANA HOLDINGS LLC d/b/a 	§
BUY WHOLESALE CABINETS; 	§
DUYEN PHAN, individually, and 	§
DOES 1-10 INCLUSIVE, 	§
§
Defendants-Counterplaintiffs, 	§
§
VS. 	§
§
NELSON CABINETRY LLC and 	§
NKB TX LLC, 	§
§
Counterclaim Defendants. 	§
MEMORANDUM OPINION
AND ORDER
In this copyright infringement action, counterclaim defendants Muamer Misut
(“Misut”), Nelson Cabinetry LLC (“Nelson Cabinetry”), and NKB TX LLC (“NKB”) move
under Fed. R. Civ. P. 12(b)(1) to dismiss the counterclaims of counterplaintiffs Duyen Phan
(“Phan”) and Curtana Holdings LLC (“Curtana”). 	For the reasons that follow, the court
grants the motion and also grants Phan and Curtana leave to replead.
I
Misut is the owner and operator of Nelson Cabinetry and NKB. Nelson Cabinetry and
NKB are online retail businesses that sell kitchen cabinets on their websites. Misut holds
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copyrights in 15 photographs of cabinets sold through Nelson Cabinetry’s website. Phan is
the manager of Curtana, which is also an online retail business that sells kitchen cabinets on
its website.
In late 2020 Misut or Nelson Cabinetry1 and Curtana entered into an oral agreement
to share warehouse space to store their cabinet inventory. The parties agreed to split the cost
of renting the warehouse. 	According to Phan, the parties also agreed to freely share
photographs of their cabinets, along with other resources and information. Misut maintains
that the parties agreed to share photographs of the inventory stored at the warehouse, which
is different from the copyrighted photographs at issue in this lawsuit.
In May 2022 Misut registered 15 photographs of cabinets with the U.S. Copyright
Office. 	Misut used these copyrighted photographs on Nelson Cabinetry’s website.
According to Misut, in the middle of 2022, he stopped paying rent to Curtana for the
warehouse because the “space became unusable.” Misut Decl. (ECF No. 27-1) 3. Misut
posits, for example, that Curtana often failed to pay the warehouse’s electricity bill. Phan
counters that Curtana fulfilled its obligation to pay half of the rent and made the warehouse
available to Misut. Curtana ultimately terminated the warehouse lease because of Misut’s
decision to stop paying his portion of the rent.
In August 2022 Misut discovered that Curtana was using his copyrighted photographs
on its website. 	Phan avers that Curtana was using Misut’s photographs pursuant to the
1It is unclear from the parties’ declarations whether Misut and Curtana or Nelson
Cabinetry and Curtana entered into the agreement to share the warehouse space.
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agreement that the parties reached in 2020.
Misut filed this copyright infringement action against Phan, Curtana, and 10 Doe
defendants. 	Phan and Curtana, in turn, sued Nelson Cabinetry and NKB, and asserted
counterclaims against Misut, Nelson Cabinetry, and NKB for breach of contract, promissory
estoppel, and quantum merit arising out of Misut’s failure to pay his share of the warehouse
rent. 	Misut, Nelson Cabinetry, and NKB now move to dismiss under Rule 12(b)(1),
contending that the court does not have supplemental jurisdiction over the counterclaims.
The court is deciding the motion on the briefs, without oral argument.
II
“Federal courts are courts of limited jurisdiction, and absent jurisdiction conferred by
statute, lack the power to adjudicate claims.” Stockman v. Fed. Election Comm’n, 138 F.3d
144, 151 (5th Cir. 1998). 	The court “must presume that a suit lies outside this limited
jurisdiction, and the burden of establishing federal jurisdiction rests on the party seeking the
federal forum.” Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th Cir. 2001). If subject
matter jurisdiction is lacking, the court must dismiss the suit. See Stockman, 138 F.3d at 151.
A party can challenge subject matter jurisdiction by making a facial attack or a factual
attack. See Paterson v. Weinberger, 644 F.2d 521, 523 (5th Cir. May 1981). A party can
make a factual attack on subject matter jurisdiction by submitting evidence, such as affidavits
or testimony. 	See id. 	“[W]hen a factual attack is made upon federal jurisdiction, no
presumptive truthfulness attaches to the [party’s] jurisdictional allegations, and the court is
free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.”
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Evans v. Tubbe, 657 F.2d 661, 663 (5th Cir. Unit A Sept. 1981). If the movant provides
evidence factually attacking subject matter jurisdiction, the nonmovant must submit evidence
and prove by a preponderance of the evidence that the court has jurisdiction. See Paterson,
644 F.2d at 523.
III
The parties contest whether the court has supplemental jurisdiction over the breach
of contract, promissory estoppel, and quantum merit counterclaims of Phan and Curtana.2
A
Courts may exercise supplemental jurisdiction over state-law claims that form part of
the “same case or controversy” with a claim over which the court has original jurisdiction.
See 28 U.S.C. § 1367(a). “The question under § 1367(a) is whether the supplemental claims
are so related to the original claims . . . that they ‘derive from a common nucleus of operative
fact.’” 	Halmekangas v. State Farm Fire & Cas. Co., 603 F.3d 290, 293 (5th Cir. 2010)
(quoting Mendoza v. Murphy, 532 F.3d 342, 346 (5th Cir.2008)); see also United Mine
Workers of Am. v. Gibbs, 383 U.S. 715, 725 (1966) (“The state and federal claims must
derive from a common nucleus of operative fact.”).
B
The counterclaims that Phan and Curtana allege are not sufficiently related to the
original claim to satisfy § 1367(a). Phan and Curtana contend that the claims arise out of the
2The parties do not dispute that this court has jurisdiction over the original claim for
copyright infringement under 28 U.S.C. § 1331 .
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parties’ intertwined business relationship. But the parties’ business relationship does not
create a sufficient basis for the exercise of supplemental jurisdiction. See CheckPoint Fluidic
Sys. Int’l, Ltd. v. Guccione, 2012 WL 195533, at *6 (E.D. La. Jan. 23, 2012) (“Nor does the
ongoing and dispute-ridden relationship between the parties create a sufficient basis for the
exercise of supplemental jurisdiction.”). 	A review of the elements required to prove the
copyright infringement claim and the counterclaims shows that these claims do not arise from
a common nucleus of operative facts. See Insuremax Ins. Agencies, Inc. v. Shanze Enters.,
Inc., 2013 WL 4014476, at *2 (N.D. Tex. Aug. 7, 2013) (Lynn, J.) (relying on this type of
analysis to determine whether the court could exercise supplemental jurisdiction over a
counterclaim). To prevail on his copyright infringement claim, Misut will need to introduce
evidence that he possessed a valid copyright, that Phan and Curtana copied Misut’s protected
work, and that the infringing work is substantially similar to the copyrighted material. See
Batiste v. Lewis, 976 F.3d 493, 502 (5th Cir. 2020) (“[A] claim for copyright infringement
has three elements: ‘(1) ownership of a valid copyright; (2) factual copying; and (3)
substantial similarity.’” (quoting Armour v. Knowles, 512 F.3d 147, 152 (5th Cir. 2007) (per
curiam)). By contrast, the breach of contract, promissory estoppel, and quantum merit claims
will turn principally on the promises that the parties made to split the cost of renting the
warehouse and the parties’ actions related to those promises. 	See Orthoflex, Inc. v.
ThermoTek, Inc., 983 F.Supp.2d 866, 872 (N.D. Tex. 2013) (Fitzwater, C.J.) (breach of
contract); English v. Fischer, 660 S.W.2d 521, 524 (Tex. 1983) (promissory estoppel);
Infra-Pak (Dall.), Inc. v. Carlson Stapler & Shippers Supply, Inc., 803 F.2d 862, 865 (5th
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Cir. 1986) (quantum merit). Accordingly, Phan and Curtana have failed to establish that the
conduct forming the basis of the copyright infringement claim and the counterclaims is so
related that they derive from a common nucleus of operative facts. See Rolls-Royce Corp.
v. Heros, Inc., 576 F.Supp.2d 765, 793 (N.D. Tex. 2008) (Fitzwater, C.J.) (declining to
exercise supplemental jurisdiction where federal- and state-law claims involved “unrelated
issues by reason of the distinct elements of the[] different causes of action”).3
Phan and Curtana also appear to contend that, because they have asserted an implied
license as an affirmative defense to Misut’s copyright infringement claim, the copyright
infringement claim and the counterclaims arise from a common nucleus of operative facts.
There does seem to be some overlap between the implied license defense and the
counterclaims. The parties agree that the rent-sharing agreement, which is at the center of
the counterclaims, was made alongside their agreement to permit Curtana to use at least some
photographs of the cabinets that belong to Misut. Moreover, Phan and Curtana maintain that
Misut’s practice of sharing photographs, along with other resources, under the parties’
agreements informs whether there was an implied license to use the copyrighted photographs.
Section 1367, however, “speak[s] only of the relationship between claims and
contain[s] no reference to the relationship between an affirmative defense and a purported
counterclaim.” Ader v. SimonMed Imaging Inc., 324 F.Supp.3d 1045, 1051 (D. Ariz. 2018);
3Nor do Phan and Curtana maintain that there is a causal relationship between the
counterclaims and the copyright infringement claim, i.e., that the counterclaims caused the
infringing act, or vice versa. See Insuremax Ins. Agencies, Inc., 2013 WL 4014476, at *3.
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see Baisden v. I’m Ready Prods., Inc., 693 F.3d 491, 499 (5th Cir. 2012) (explaining that “the
existence of a license authorizing the use of copyrighted material is an affirmative defense
to an allegation of infringement” regardless of whether “a plaintiff can meet [the] elements”
of copyright infringement). Phan and Curtana do not cite any authority that suggests that the
court may consider whether the relationship between the affirmative defense and the
counterclaims suffices to confer supplemental jurisdiction over the counterclaims. To the
contrary, many courts have concluded that the correct inquiry under § 1367 is whether the
claims are related, without reference to any affirmative defense raised. See, e.g., Hill v. Neb.
Furniture Mart or TXFM, Inc., 2024 WL 3589275, at *5 (E.D. Tex. June 21, 2024), rec.
adopted, 2024 WL 3585590 (E.D. Tex. July 30, 2024); Lawrence & Assocs., Inc. v. Amdocs
Champaign, Inc., 2007 WL 390732, at *3 (E.D. Mo. Jan. 31, 2007); Castillo v. J.P. Morgan
Chase Bank, N.A., 2020 WL 496072, at *3 (N.D. Cal. Jan. 30, 2020); Ensz v. Chase Bank
USA NA, 2019 WL 136982, at *3 (N.D. Iowa Jan. 7, 2019). Because Phan and Curtana have
failed to meet their burden to establish that the copyright infringement claim and the
counterclaims arise from a common nucleus of operative facts, the court grants the Rule
12(b)(1) motion to dismiss the counterclaims.4
4Because the court concludes that Phan and Curtana have not established that the
claims arise from a common nucleus of operative facts, it declines to address the parties’
arguments concerning § 1367(c). See Kiser v. Moyal, 2024 WL 4229936, at *14 (M.D. La.
Sept. 18, 2024) (“[T]he discretionary grounds for declining to exercise supplemental
jurisdiction found in § 1367(c) are not relevant until the existence of jurisdiction is
established pursuant to § 1367(a) (emphasis omitted)).
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IV
Although the court is dismissing Phan and Curtana’s counterclaims, it will grant them
leave to replead. See Shah v. Univ. of Tex. Sw. Med. Sch., 54 F.Supp.3d 681, 707 (N.D. Tex.
2014) (Fitzwater, C.J.) (“Because the court’s usual practice when granting a motion to
dismiss is to permit a plaintiff at least one opportunity to replead, the court will give Shah
an opportunity to amend his complaint.” (citing In re Am. Airlines, Inc., Priv. Litig., 370
F.Supp.2d 552, 567-68 (N.D. Tex. 2005) (Fitzwater, J.)). They must file an amended answer
no later than 21 days after the date this memorandum opinion and order is filed.
* 	* 	*
For the reasons explained, the court grants the Rule 12(b)(1) motion to dismiss and
grants Phan and Curtana leave to replead.
SO ORDERED.
March 30, 2026.
_________________________________
SIDNEY A. FITZWATER
SENIOR JUDGE
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