Fox Corporation et al v. Arroyo Rodriquez

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IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
Fox Corporation, et al.,
Plaintiffs,
v.
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§
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§
Civil No. 4:25-cv-4650
Laura Paola Arroyo Rodriguez,
Defendant.
MEMORANDUM ORDER AND OPINION
Before the Court are several motions: Defendant Laura Paola Arroyo Rodriquez’s
Motion to Compel Joinder, Doc. 17; Plaintiffs Fox Corporation, Fox Media LLC, and Fox
Sports en Español LLC’s Motion to Modify Preliminary Injunction, Doc. 37; and
Defendant’s Motion to Stay, Doc. 51. All three of these motions are denied.
The parties’ joint request for a status conference to discuss these motions, Doc. 65,
is denied as moot. However, if it would be helpful to the parties moving forward, upon
motion of any party, the Court can schedule a status conference to discuss any other issues
in the case.
Plaintiffs’ Motion for Protective Order, Doc. 61, is hereby referred to Magistrate
Judge Yvonne H. Ho for further adjudication. See 28 U.S.C. § 636(b)(1)(A).
I. FACTUAL AND PROCEDURAL BACKGROUND
This case arises of out a dispute that is being litigated in the United States District
Court for the Southern District of New York. Fox Corporation et al. v. Media Deportes
Mexico, No. 25-cv-6703 (S.D.N.Y. Aug. 14, 2025). In that case, Plaintiffs sued Media
United States District Court
Southern District of Texas
ENTERED
June 16, 2026
Nathan Ochsner, Clerk
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Deportes Mexico, a Mexican broadcasting company, for misappropriation of intellectual
property and other related causes of action. Id. And as part of that case, Plaintiffs obtained
a contempt judgment against the president of Media Deportes Mexico, Manuel Arroyo. Id.,
Doc. 45.
Plaintiffs brought this case to void a transfer of Texas real property from Arroyo to
his sister, Defendant Laura Paola Arroyo Rodriguez. Doc. 1. Plaintiff argues that
Defendant transferred the property just after the contempt judgment was entered in an effort
to shield the asset from Plaintiffs. Doc. 27 at 3 (First Amended Complaint). The Court
granted Plaintiffs an ex parte Temporary Restraining Order, in which the Court
“exercise[d] in rem jurisdiction over the property,” “voided” the transfer of title, enjoined
“[a]ny transfer or encumbrance” of the property, and ordered the property to be “preserved
in a constructive trust for Plaintiffs.” Doc. 3 at 6. The parties then agreed to a preliminary
injunction with similar terms. Doc. 22.
After the injunction was entered, Plaintiffs filed a separate case in this district to
register the contempt judgment from the Southern District of New York. See Fox Corp. et
al. v. Arroyo, No. 4:25-mc-2271 (S.D. Tex. Nov. 11, 2025).
Before the entry of the preliminary injunction, Defendant moved to join her brother
as a necessary party. Doc. 17. Then, Plaintiffs moved to modify the preliminary injunction
and asked the Court to allow them to record a lien against, and force the sale of, the property
to collect on the contempt judgment while this case remains ongoing. Doc. 37. After that,
in the judgment registration case in this district, Defendant’s brother moved to vacate the
contempt judgment against him in the underlying case, see Doc. 2, Fox Corp. v. Arroyo,
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No. 4:25-mc-2271 (S.D. Tex. Nov. 11, 2025), and Plaintiff then moved to stay this case
pending the resolution of that motion, Doc. 52.
II. LEGAL STANDARD
A. Joinder
Under Federal Rule of Civil Procedure 19, “[a] person who is subject to service of
process and whose joinder will not deprive the court of subject-matter jurisdiction must be
joined as a party if” one of two conditions is met. First, such a party must be joined if “in
that person’s absence, the court cannot accord complete relief among existing parties.” Fed.
R. Civ. P. 19(a)(1)(A). Second, such a party must be joined if he “claims an interest relating
to the subject of the action and is so situated that disposing of the action in the person’s
absence may: (i) as a practical matter impair or impede the person’s ability to protect the
interest; or (ii) leave an existing party subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations because of the interest.” Fed. R. Civ. P.
19(a)(1)(B).
B. Modification of Preliminary Injunction
A party seeking a preliminary injunction must establish the following elements:
“(1) a substantial likelihood of success on the merits, (2) a substantial threat that plaintiffs
will suffer irreparable harm if the injunction is not granted, (3) that the threatened injury
outweighs any damage that the injunction might cause the defendant, and (4) that the
injunction will not disserve the public interest.” Nichols v. Alcatel USA, Inc., 532 F.3d 364,
372 (5th Cir. 2008). “A preliminary injunction is an extraordinary remedy and should only
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be granted if the plaintiffs have clearly carried the burden of persuasion on all four
requirements.” Id. (internal quotation marks omitted).
Modification of a previously granted preliminary injunction falls within the
continuing jurisdiction of a district court, and “the court is authorized to make any changes
in the injunction that are equitable in light of subsequent changes in the facts or the law, or
for any other good reason.” Canal Auth. of State of Fla. v. Callaway, 489 F.2d 567, 578
(5th Cir. 1974) (citation omitted).
C. Stay
“The power to stay a matter is incidental to the power inherent in every court to
control the disposition of the causes on its docket with economy of time and effort for itself,
for counsel and for litigants.” Langiano v. City of Fort Worth, Texas, 131 F.4th 285, 290
(5th Cir. 2025) (quoting Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)). In deciding
whether to stay a case, the Court must “weigh competing interests and should only grant a
stay when special circumstances exist, such as the need to avoid substantial and irreparable
prejudice.” Id. at 291 (internal quotation marks and citations omitted).
Plaintiffs argue that whether to stay the case is governed by Nken v. Holder, 556
U.S. 418 (2009). Doc. 57 at 7. But Nken is about whether to stay final judgment in a case
pending appeal, not whether to stay one case pending another case’s disposition. Id. at 421.
And in cases involving stays for a related case, courts that have considered whether to
apply the Landis test or the Nken test “have overwhelmingly concluded that the Landis test
or something similar governs.” Kuang v. U.S. Dep’t of Defense, No. 18-cv-3698-JST, 2019
WL 1597495 (N.D. Cal. Apr. 15, 2019) (collecting cases).
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III. ANALYSIS
First, the Court denies Defendant’s motion to join her brother as a necessary party
because he does not claim an interest in the property and because the Court can administer
complete relief without him. See Fed. R. Civ. P. 19(a). Second, the Court declines to modify
the preliminary injunction because doing so would not preserve the status quo. And finally,
the Court declines to stay the case because moving forward at this stage will not cause
harm.
A. Joinder
Defendant argues that her brother is a necessary party because the Court cannot
accord complete relief without his presence in the case. Doc. 18 at 3. The Court disagrees.
First, Defendant’s view is that her brother has already transferred the property to
her, so Defendant has not shown that her brother actually claims an interest in the disputed
real property. Rule 19(a)(1)(B), which only applies to a third party who “claims an interest
relating to the subject of the action,” thus does not apply.
Second, Defendant’s brother is not necessary to “accord complete relief among
existing parties.” Fed. R. Civ. P. 19(a)(1)(A). In fraudulent transfer cases, “the weight of
authority is that a transferor is indispensable only where he has retained an interest in the
conveyed property.” Takiguchi v. MRI Int’l, Inc., Case No. 2:13-CV-01183-JAD-VCF,
2015 WL 13677808, at *2 (D. Nev. Jan. 23, 2015) (collecting cases). As one court
explained, “[i]n a suit to set aside a fraudulent conveyance, the grantor is not an
indispensable party defendant where he has retained no interest, either legal or equitable,
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in the property conveyed.” Allan v. Moline Plow Co., 14 F.2d 912, 915 (8th Cir. 1926)
(citation omitted).
There are two reasons for this rule. First, “[t]he property in such a case has
irrevocably passed from the grantor’s control [and] he cannot be prejudiced by a decree
which subject[s] such property to the payment of his debts.” Id. (citation omitted). And
second, the grantor “cannot enjoy any of the fruits of a successful prosecution of the suit
to set aside the fraudulent conveyance, for, after the creditor’s demand is satisfied, the
remainder of the fund goes to the fraudulent grantee.” Id. (citation omitted).
The same principles apply here. Under “the law of Texas . . . if a fraudulent
conveyance of real property is established, as between the grantor and grantee the grantor
no longer has any right in or claim to the fraudulently conveyed property. United States v.
Simmons, No. 4:13-CV-066-A, 2013 WL 5873366, at *1 (N.D. Tex. Oct. 31, 2013) (citing
Stevens v. Cobern, 213 S.W. 925, 926 (Tex. 1919)). “[T]itle passes to the vendee in the
fraudulent conveyance, as against the debtor and his estate.” Douglas v. First Nat. Bank,
40 S.W.2d 801, 802 (Tex. 1931). It follows that after the defrauded creditor claims his
portion, “any such vendee would receive any excess in the value of the property conveyed.”
Id.
This rule and these reasons apply here and show why Defendant’s brother is not a
necessary party. If Plaintiffs are ultimately entitled to relief, the Court will be able to accord
complete relief without Defendant’s brother by simply declaring the transfer fraudulent as
to the creditors. Because “title passes to the vendee in the fraudulent conveyance as against
the debtor,” Douglas, 40 S.W.2d at 802, any remaining claim to, or interest in, the property
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would belong to Defendant, not her brother. In other words, either the conveyance was
lawful, in which case Defendant alone holds title to the property, or the transfer was
fraudulent, meaning only Plaintiffs (as creditors) and Defendant (as the vendee/grantee)
will maintain an interest in it. Regardless, Defendant’s brother will not be affected by the
lawsuit, so the Court can accord complete relief without his participation. So, because he
will not be affected by the lawsuit, the Court can “accord complete relief among existing
parties” without him. Fed. R. Civ. P. 19(a)(1)(A).
Defendant argues that “contracting parties [are] indispensable in actions to enforce
or cancel contracts,” and cites several cases in support of that argument. Doc. 18 at 4. But
that principle applies where the necessary party retains an interest in the contract or
instrument such that it is impossible for the court to accord complete relief without having
the necessary party present. For example, Defendant relies on Tucker v. National Linen
Service Corp., 200 F.2d 858, 863 (5th Cir. 1953). Doc. 18 at 4. But in that case, the third
parties were necessary because Plaintiffs sought “equitable relief by way of cancellation of
certificates standing in the names of persons not parties to the suit.” Tucker, 200 F.2d at
863. None of Defendant’s cases address a situation like this one, in which the absent party
does not currently maintain an interest in the property and does not stand to gain any
through disposition of the case.
Because he claims no interest in the property, and because the Court can order
complete relief without him in the case, the Court declines to join Defendant’s brother.
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B. Modification of Preliminary Injunction
The Court declines to modify the preliminary injunction so as to allow Plaintiffs to
levy the property to collect on the contempt judgment. “The purpose of a preliminary
injunction is merely to preserve the relative positions of the parties until a trial on the merits
can be held.” Jonibach Mgmt. Tr. v. Wartburg Enters., Inc., 750 F.3d 486 (5th Cir. 2014)
(quoting Univ. of Tex. v. Camenisch, 451 U.S. 390, 395 (1981)). Allowing Plaintiffs to
seek execution now would not preserve the status quo.
C. Stay
In Plaintiffs’ case registering the judgment from the Southern District of New York,
Defendant’s brother has filed a motion to vacate the Southern District of New York’s
judgment. Doc. 2, Fox Corp. v. Arroyo, No. 4:25-mc-2271 (S.D. Tex. Nov. 11, 2025).
Defendant asks this Court to stay this case pending the result of that motion. Doc. 51.
In deciding whether to stay a case, the Court must “weigh competing interests and
should only grant a stay when special circumstances exist, such as the need to avoid
substantial and irreparable prejudice.” Langiano, 131 F.4th at 290 (citation omitted).
Here, a stay harms Plaintiffs by preventing them from going forward with their case,
and Defendant fails to show any resulting prejudice. Defendant argues that it will be
harmed by being deprived of the property. Doc. 51 at 6–7. But if the case moves forward,
Plaintiffs will not be able to immediately force the property’s sale or effectuate a
conveyance of title. Rather, the Court’s preliminary injunction will remain in place, under
which the property will be “preserved in a constructive trust.” Doc. 3 at 6; Doc. 22. Because
the status of the property cannot even potentially change until later in the case, Defendant
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has not shown any hardship or inequity from moving forward at this time. For this reason,
exercising its discretion, the Court declines to stay the case. This denial is without prejudice
to the filing of a later motion to stay.
IV. CONCLUSION
For these reasons, Defendant’s motion to join is DENIED, Plaintiff’s motion to
modify the preliminary injunction, Doc. 37, is DENIED, and Defendant’s motion to stay,
Doc. 51, is DENIED.
SO ORDERED.
________________________
Nicholas J. Ganjei
United States District Judge
SIGNED at Houston, Texas, on the 16th day of June, 2026.
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