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Dish Network, L.L.C. v. Wnet, Thirteen, Twentieth Century Fox Film Corporation

United States District Court, D. Colorado

April 24, 2014

DISH NETWORK, L.L.C., Petitioner,
v.
WNET, THIRTEEN, TWENTIETH CENTURY FOX FILM CORPORATION, WPIX, INC, UNIVISION TELEVISION GROUP, INC., THE UNIVISION NETWORK LIMITED PARTNERSHIP, and PUBLIC BROADCASTING SERVICE, Respondents.

ORDER

KRISTEN L. MIX, Magistrate Judge.

This matter is before the Court on Non-Party DISH Network LLC's Motion to Quash Subpoenas [#2][1] (the "Motion").[2] Respondents[3] filed an Opposition to Non-Party DISH Network LLC's Motion to Quash Subpoenas [#6] (the "Response"), and Movant filed a Reply in Support of Motion to Quash Subpoenas and in Response to Respondents' Opposition to Motion to Quash Subpoenas [#11] (the "Reply"). The Court held a hearing on the Motion on May 31, 2013, and allowed the parties to file additional briefs [#19]. Respondents filed WNET Plaintiffs' Brief Regarding Irreparable Harm and Market Harm [#20] ("Respondents' Brief") and Movant filed a Response to Respondents' Brief Regarding Irreparable Harm and Market Harm [#24] ("Movant's Brief"). The Court has reviewed the Motion, Response, Reply, Respondents' Brief, Movant's Brief, all supporting documents, the entire case file and applicable law, and is sufficiently advised in the premises. For the reasons set forth below, the Motion [#2] is GRANTED.

I. Summary of the Case

The Broadcasters served the subpoenas at issue on DISH in connection with discovery in a case pending in the United States District Court for the Southern District of New York. In that case, WNET v. Aereo, Inc ., No. 12 Civ. 1543 (AJN) (S.D.N.Y.), the Broadcasters sued Aereo for copyright infringement, among other claims.[4] "Aereo operates the Aereo.com website, which provides subscribers with over-the-air broadcast television (e.g., ABC, CBS, NBC, Fox and PBS) on internet-connected devices, such as personal computers, iPhones, and iPads." Memorandum [#2-1] at 7. Although "[a] billion dollar market exists for licenses to retransmit local broadcast channels, " the Broadcasters have not granted Aereo licenses or permission to transmit their copyrighted television programming, and Aereo does not pay the Broadcasters to transmit the programming over the internet. Respondents' Brief [#20] at 20. Hence, the Broadcasters allege "that by capturing and then retransmitting live broadcast television programming over the [i]nternet to subscribers, Aereo has infringed Respondents' public performance and reproduction rights under the Copyright Act." Id. at 7-8.

On the same day when the WNET case was filed, another group of copyright holders and broadcasters filed a parallel lawsuit against Aereo, also in the Southern District of New York. Am. Broad. Cos. v. Aereo, Inc ., No. 12 Civ. 1540 (AJN) (S.D.N.Y.).[5] Plaintiffs in the WNET case and the ABC case moved for a preliminary injunction prohibiting Aereo from enabling subscribers to stream live broadcast television over the internet. Although the court eventually found that the plaintiffs had established irreparable harm, it denied the preliminary injunction because plaintiffs had failed to establish a likelihood of success on the merits of their copyright infringement claims. Am. Broad. Cos., Inc. v. Aereo, Inc., 874 F.Supp.2d 373, 396 (S.D.N.Y. 2012). The Second Circuit affirmed. WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013).

In the meantime, before the New York court ruled on the joint motion for preliminary injunction, Twentieth Century Fox Film Corporation and its affiliates sued DISH in the Central District of California. Fox Broad. Co. Inc. v. DISH Network LLC, Case No. 12-04529 DMG (C.D. Cal.).[6] In that suit, Fox asserts that features on a DISH product known as "the Hopper" violate Fox's copyrights and breach DISH's retransmission consent agreement with Fox's television stations. Memorandum [#2-1] at 9. Fox sought a preliminary injunction against operation of the targeted features of the Hopper, which the California District Court denied in November of 2012. Fox Broad. Co. Inc. v. DISH Network, LLC, 905 F.Supp.2d 1088 (C.D. Cal. 2012). The Ninth Circuit affirmed. Fox Broad. Co., Inc. v. DISH Network LLC, ___ F.3d ___, 2014 WL 260572 (9th Cir. Jan. 24, 2014).

While the Fox suit was pending, DISH introduced a new version of the Hopper with advanced technology which allows DISH customers to remotely access live or recorded programming on their Hoppers with internet-connected devices, like laptops and smartphones. Memorandum [#2-1] at 9-10. In response, Fox amended its complaint and moved for a second preliminary injunction. The subpoenas at issue here were served on DISH 31 days before the date of the hearing on the second motion for preliminary injunction. The subpoena duces tecum had a return date of 17 days before the second preliminary injunction hearing, and the subpoena ad testificandum noticed DISH's deposition for two days before the hearing. Id. at 10. Fox is also a Respondent in this case and is represented by the same counsel in this case and the Fox case.[7]

Pay television providers like DISH "license the right to retransmit television programming to [their] subscribers. DISH has licenses with major over-the-air broadcast television networks, ABC, CBS, NBC, and Fox, that take the form of retransmission consent agreements entered into pursuant to statutory licenses in the Copyright Act." Memorandum [#2-1] at 8. Thus, the Broadcasters are content suppliers to DISH, which pays "retransmission fees" to the Broadcasters for the right to transmit television programming. Despite Aereo's unlicensed status, the Broadcasters are also content suppliers to Aereo. DISH and Aereo, however, are solely content distributors, and to that extent are competitors.

The subpoenas at issue here seek documents and testimony from DISH regarding its business dealings with Aereo. As explained by the Broadcasters, they seek agreements relating to any licensing or acquisition of Aereo or its technology by DISH, documents relating to the impact of Aereo on DISH's retransmission fees and on the broadcast industry, and documents regarding DISH's valuation of Aereo that would "reveal the intentions of DISH (which has an existing retransmission relationship with [the Broadcasters]) to replace the retransmission fees paid to [the Broadcasters] with Aereo." Response [#6] at 6; Exh. 2 to Motion [#2-4] at 6-7. Among the testimony sought is information regarding DISH's communications, negotiations and potential business arrangements with Aereo, including offers to purchase or expressions of interest in Aereo's assets, information regarding the potential impact of Aereo or a deal between DISH and Aereo on the Broadcasters and retransmission fees, and information about integration of Aereo's technology into DISH's devices. Exh. 3 to Motion [#2-5] at 6-7.

II. Standard of Review

Fed. R. Civ. P. 45(d)(3)(B)(I) permits the Court to quash a subpoena that requires disclosure of "trade secret or other confidential research, development, or commercial information." In cases where subpoenas are served on a non-party, the non-party has the burden of showing that the requested information is confidential commercial information. Such information is generally defined as "important proprietary information that the non-party has historically sought to maintain [as confidential]." In re Subpoena of DJO, LLC, ___ F.R.D. ___, 2014 WL 197721, at *3 (S.D. Cal. Jan. 15, 2014).

Fed. R. Civ. P. 45(d)(3)(C) permits the Court to nevertheless require production of confidential commercial documents or information pursuant to a subpoena if the requesting party "shows a substantial need for the testimony or material that cannot otherwise be met without undue hardship." In determining whether a subpoena imposes an undue burden, the court weighs the burden to the subpoenaed party against the value of the information to the requesting party. "Generally, this requires consideration of relevance, the need of the party for the documents, the breadth of the document request, the time period covered by it, the particularity with which the documents are described and the burden imposed." Id. at *2 (citing United States v. IBM, 83 F.R.D. 97, 104 (S.D.N.Y. 1979)).

III. Analysis

A. Confidential Commercial Information

As indicated above, DISH has the burden of establishing that the information sought is protected under Rule 45(d)(3)(B)(I). DISH asserts that the subpoenas seek confidential internal business strategies and commercially sensitive subject matter, like DISH's valuation of Aereo, the impact of Aereo on the fees DISH pays to the Broadcasters, and whether DISH wants to - and can - integrate Aereo into its own devices. Memorandum [#2-1] at 13-14. DISH points out that not only is Aereo its competitor, but the Broadcasters sit on the opposite side of the bargaining table from DISH when retransmission licenses and fees are negotiated. Further, Fox is DISH's opponent in on-going federal court litigation. Id. at 14-15. DISH implies that the relationships between the entities involved here render the information sought particularly sensitive. Id. DISH posits that the information sought is confidential precisely because it could be used by the Broadcasters to help them establish harm to their retransmission fee negotiations, including negotiations with DISH. Reply [#11] at 2. DISH asserts that to the extent it "may be engaged in business discussions with Aereo, DISH's own negotiating position would be harmed by production of its internal documents on those discussions to Aereo. " Id. (emphasis in original).

The Broadcasters do not seriously argue that the information sought here is not confidential commercial information. Instead, they assert that DISH has not met its burden of showing that disclosure of the information "will work a clearly defined and serious injury to the moving party." Response [#6] at 9. They argue that "courts regularly order the disclosure of confidential information where, as here, the need for such information outweighs the potential harm." Id. at 10. Finally, they assert that ...


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