List posts from certain category, by tag

Basically I need to get all posts from a particular category (or multiple categories), and list them out according to their tag.
In Category X, there are the following tags, and under each tag is the link to all the posts with that tag.
I have it MOSTLY working – except this is pulling ALL tags from ALL categories. Any way I can limit this output to just a particular category?

<?php
    //get all terms (e.g. categories or post tags), then display all posts in each term
    $taxonomy = 'post_tag';//  e.g. post_tag, category
    $param_type = 'tag__in'; //  e.g. tag__in, category__in
    $term_args=array(
      'orderby' => 'name',
      'order' => 'ASC'
    );
    $terms = get_terms($taxonomy,$term_args);
    if ($terms) {
      foreach( $terms as $term ) {
        $args=array(
          "$param_type" => array($term->term_id),
          'post_type' => 'post',
          'post_status' => 'publish',
          'posts_per_page' => -1,
          'caller_get_posts'=> 1
          );
        $my_query = null;
        $my_query = new WP_Query($args);
        if( $my_query->have_posts() ) {
          echo '<h2 class="tag">' . $term->name . '</h2><ul class="post">';
          while ($my_query->have_posts()) : $my_query->the_post(); ?>
            <li><a href="<?php the_permalink() ?>" rel="bookmark" title="Permanent Link to <?php the_title_attribute(); ?>"><?php the_title(); ?></a></li>
           <?php
          endwhile;
          echo '</ul>';
        }
      }
    }
    wp_reset_query();  // Restore global post data stomped by the_post().
    ?>

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