Muamer Misut v. Curtana Holdings LLC d/b/a Buy Wholesale Cabinets; Duyen Phan, individually, and Does 1-10 Inclusive v. Nelson Cabinetry LLC and NKB TX LLC

Opinion

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 The court returns to this copyright infringement action in which 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 dismisses the counterclaims without prejudice. I The relevant background facts of this case are largely set out in a prior memorandum opinion and order and need not be repeated at length for the purpose of deciding the pending

motion. See Misut v. Curtana Holdings LLC (Misut I), 2026 WL 860094, at *1 (N.D. Tex. Mar. 30, 2026) (Fitzwater, J.). After the court dismissed the counterclaims and granted Phan and Curtana leave to replead, id. at *3, they filed an amended answer. Phan and Curtana assert counterclaims against Misut, Nelson Cabinetry, and NKB for breach of contract,

promissory estoppel, quantum merit, unjust enrichment, and setoff and recoupment related to 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 these counterclaims.1 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

1Phan and Curtana also assert two declaratory judgment claims against Misut. Misut does not move to dismiss these claims. -2- 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.” 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, quantum merit, unjust enrichment, and setoff and

recoupment counterclaims of Phan and Curtana. 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 -3- derive from a common nucleus of operative fact.”). B Phan and Curtana contend that the amended answer clarifies that the copyright

infringement claim and the counterclaims arise from the parties’ “Integrated Cooperative Agreement.” P. Resp. (ECF No. 48) 5. According to Phan and Curtana, this agreement consisted of a warehouse rent sharing component and a cabinet photograph sharing component. They maintain that, “[b]ecause the same Integrated Cooperative Agreement

determines whether Misut licensed the photographs, the Contract Counterclaims and the Copyright Claims turn on a shared set of operative facts.” Id. at 7. Misut, Nelson Cabinetry, and NKB dispute the existence of an Integrated Cooperative Agreement, but nonetheless maintain that this agreement fails to provide a sufficient basis for the court to exercise supplemental jurisdiction over the counterclaims.

In Misut I the court explained that § 1367 “speak[s] only of the relationship between claims and contain[s] no reference to the relationship between an affirmative defense and a purported counterclaim.” Misut I, 2026 WL 860094, at *3 (alterations in original) (quoting Ader v. SimonMed Imaging Inc., 324 F.Supp.3d 1045, 1051 (D. Ariz. 2018)). The court also observed that many judges have “concluded that the correct inquiry under § 1367 is whether

the claims are related, without reference to any affirmative defense raised.” Id. (collecting cases). Here, whether the Integrated Cooperative Agreement authorized Phan and Curtana to use Misut’s copyrighted photographs is an affirmative defense. See Baisden v. I’m Ready Prods., Inc., 693 F.3d 491, 499 (5th Cir. 2012) (explaining that “the existence of a license -4- 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); see also Muhammad-Ali v. Final Call, Inc., 832 F.3d 755, 760-61 (7th Cir.

2016) (collecting cases) (explaining that “a plaintiff is not required to prove that the defendant’s copying was unauthorized in order to state a prima facie case of copyright infringement” and “the burden of proving that the copying was authorized lies with the defendant” as an affirmative defense).

Phan’s and Curtana’s basis for invoking supplemental jurisdiction appears to hinge on the relationship between their affirmative defenses and the counterclaims.2 But, once again, Phan and Curtana do not cite any authority that suggests that the court may consider whether the relationship between the affirmative defenses and the counterclaims suffices to confer supplemental jurisdiction over the counterclaims. See Ader, 324 F.Supp.3d at 1051

(declining to exercise supplemental jurisdiction over counterclaims in part because defendant failed to “point to any case law to support its argument that a relationship between affirmative defenses and counterclaims is sufficient to confer supplemental jurisdiction”). Accordingly, the court will limit its analysis to whether the counterclaims are part of the

2The declaration Phan and Curtana attached to their amended answer acknowledges as much. See Karahodza Decl. (ECF No. 42-1) 10-11 (“Any evaluation of whether Curtana Holdings’ use of the accused photographs was authorized, licensed, acquiesced in, or consistent with the parties’ course of dealing necessarily turns on the same facts, the same conduct, the same time period, the same witnesses, and the same documentary record as the resolution of Curtana Holdings’ claims that the Misut Parties failed to perform their obligations under that same arrangement.” (emphasis added)). -5- same case or controversy as the copyright infringement claim. See 28 U.S.C. § 1367(a) (“[D]istrict courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same

case or controversy . . . .” (emphasis added)). Turning to the relationship between the copyright infringement claim and the counterclaims, the court concludes that the counterclaims that Phan and Curtana allege are not sufficiently related to the copyright infringement claim to satisfy § 1367(a). To prevail

on his copyright infringement claim, Misut must 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. Misut I, 2026 WL 860094, at *2 (citing Batiste v. Lewis, 976 F.3d 493, 502 (5th Cir. 2020)). Phan and Curtana do not offer any meaningful analysis regarding how the operative facts needed to support the elements of their

counterclaims overlap with the operative facts needed to support the elements of Misut’s copyright infringement claim. 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”); Trench Tech Int’l, Inc. v. Tech Con Trenching, Inc., 2020

WL 11772529, at *3-4 (N.D. Tex. Mar. 20, 2020) (O’Connor, J.) (same). In fact, the counterclaims can be resolved without any consideration of whether Misut has successfully established the elements of his copyright infringement claim. See CheckPoint Fluidic Sys. Int’l, Ltd. v. Guccione, 2012 WL 195533, at *6 (E.D. La. Jan. 23, 2012) (declining to -6- exercise supplemental jurisdiction in part because “the success of defendant’s counterclaims does not depend at all on the success of plaintiff’s Lanham Act or unfair competition claims”); cf. Software Brokers of Am., Inc. v. Doticom Corp., 484 F.Supp.3d 1205, 1212

(S.D. Fla. 2020) (“That the misconduct arose out of the parties’ business relationship during the same time frame does not make the claims part of the same case or controversy, where the operative facts for each set of claims are distinct.” (citing Donahue v. Tokyo Electron Am., Inc., 2014 WL 12479285, at *8 (W.D. Tex. Sept. 2, 2014)). The only conceivable place

that the claims could overlap is with how a copyright infringement plaintiff may establish “factual copying.” “[A] plaintiff can raise an inference of factual copying from ‘(1) proof that the defendant had access to the copyrighted work prior to creation of the infringing work and (2) probative similarity.’” Batiste, 976 F.3d at 502 (quoting Positive Black Talk Inc. v. Cash Money Recs., Inc., 394 F.3d 357, 368 (5th Cir. 2004)). Evidence related to the cabinet

photograph sharing component of the Integrated Cooperative Agreement could be relevant to whether Phan and Curtana had access to the copyrighted work. But this hardly establishes that the claims share a common nucleus of operative facts in the context of this case. Misut’s complaint suggests that the copyrighted photographs were accessible because they were available online. Moreover, Misut appears to allege that the cabinet photographs used on

Curtana’s website are identical to Misut’s copyrighted photographs. See id. (“[A] plaintiff may raise an inference of factual copying without any proof of access if the works are ‘strikingly similar.’” (quoting Ferguson v. Nat’l Broad. Co., 584 F.2d 111, 113 (5th Cir. 1978)). The court also doubts that Misut would attempt to rely on an agreement that he -7- maintains did not exist and did not cover the photographs at issue in this lawsuit to establish that Phan and Curtana had access to the copyrighted work. Cf. Insuremax Ins. Agencies, Inc. v. Shanze Enters., Inc., 2013 WL 4014476, at *2 (N.D. Tex. Aug. 7, 2013) (Lynn, J.) (“The

Court doubts that Plaintiffs would rely on their own alleged misconduct to buttress their infringement claim. Even if they do, this is a peripheral point that joins the claims only at their edges.”). Accordingly, the court now reaches the same conclusion that it reached in Misut I.

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. IV Phan and Curtana also contend that the direct causal relationship between the claims

suffices to establish supplemental jurisdiction. They maintain that the breakdown in the rent sharing component of the Integrated Cooperative Agreement caused Misut to assert his copyright infringement claim. To support their contention that these allegations suffice to establish supplemental jurisdiction, Phan and Curtana rely on NatureSweet, Ltd. v. Mastronardi Produce, Ltd., 2013 WL 460068 (N.D. Tex. Feb. 6, 2013) (Fish, J.). In

Naturesweet Judge Fish held that the causal relationship between the counterclaims of tortious interference with a contract and unfair competition and the original claims for patent and trademark infringement sufficed to establish supplemental jurisdiction over the counterclaims. Id. at *6-7. There, the infringing acts that formed the core of the original -8- claims flowed from the counterclaims. See id. at *7. Even with this causal relationship, however, the issue of supplemental jurisdiction was a “close question.” Id. at *6; see also 13D Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 3567.1, at

356-57 (3d. ed. 2008) (noting that “a mere causal relationship between the two claims may not suffice” to establish supplemental jurisdiction). Phan and Curtana have failed to allege a causal relationship between the claims that is sufficient to establish supplemental jurisdiction. The parties’ evidence suggests that the

rent dispute and the copyright infringement claim arose independently. According to Phan’s declaration, Misut’s communications never connected his refusal to pay the rent to the alleged copyright infringement. Rather, Misut’s communications raised concerns regarding the parties’ “broader business relationship,” even after Misut discovered the copyright infringement and sent Curtana a cease-and-desist letter. See Phan Decl. (ECF No. 48-1) 3.

Misut’s declaration likewise explains that he stopped paying rent because the warehouse became unusable and that he brought this copyright infringement action after he discovered that Curtana was using his copyrighted material. Because the alleged causal relationship here falls short of the one deemed sufficient in Naturesweet, the court concludes that the claims are not sufficiently related to confer supplemental jurisdiction over the counterclaims.

V “[D]istrict courts often afford plaintiffs at least one opportunity to cure pleading deficiencies before dismissing a case, unless it is clear that the defects are incurable or the plaintiffs advise the court that they are unwilling or unable to amend in a manner that will -9- avoid dismissal.” In re Am. Airlines, Inc., Priv. Litig.,370 F.Supp.2d 552, 567-68 (N.D. Tex. 2005) (Fitzwater, J.) (quoting Great Plains Tr. Co. v. Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (Sth Cir.2002)). The court has already granted Phan and Curtana one opportunity to amend their answer. Moreover, the amended answer and the original answer were dismissed on similar grounds. Because the court has already permitted Phan and Curtana to amend once, and they are unable to cure the defects identified, the court denies Phan and Curtana leave to amend a second time. See, e.g., ABC Arbitrage Plaintiffs Grp. v. Tchuruk, 291 F.3d 336, 362 (Sth Cir. 2002) (concluding that district court did not abuse its discretion by denying leave to replead where court had already given plaintiffs an opportunity to do so). x Ok 8

For the reasons explained, the court grants the partial motion to dismiss and dismisses the counterclaims without prejudice. SO ORDERED. August 19, 2026.

Bilin, (Liye SENIOR JUDGE

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