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Dish Network LLC v. Open Orbit Corp.

United States District Court, D. Colorado

March 19, 2018

DISH NETWORK L.L.C., a Colorado limited liability company Plaintiff,
v.
OPEN ORBIT CORPORATION, a New York Company and SUJIT GHOSH, an individual resident of New York Defendants.

          MEMORANDUM OPINION AND ORDER

          LEWIS T. BABCOCK, JUDGE

         This case is before me on Plaintiff DISH Network LLC's amended application to confirm an arbitration award. (ECF No. 38.) DISH asks this Court to enforce an arbitration award against Defendant Sujit Ghosh even though he was not a party to the arbitration.

         After initially reviewing the application and Mr. Ghosh's pro se response, I entered a show cause order asking DISH to show cause why this case should not be sent to arbitration in light of an arbitration provision in the relevant contract between DISH and Mr. Ghosh. DISH argues that a second arbitration is not needed because of a prior arbitration award in its favor against Defendant Open Orbit Corporation and Mr. Ghosh's promise to guarantee Open Orbit's performance. (ECF No. 38-2 at 1.)

         I conclude that even though Mr. Ghosh was not a party to the arbitration between DISH and Open Orbit, the award can be enforced against him under the unique factual circumstances of this case. I thus GRANT DISH's application.

         I. BACKGROUND

         DISH operates a direct broadcast satellite system and broadcasts movies, sports, and general entertainment programming to consumers who pay a subscription fee to DISH. Open Orbit was an authorized retailer for DISH, meaning it was allowed to market, promote, and solicit orders for DISH.

         To become a retailer for DISH, Open Orbit signed a “DISH Network Retailer Agreement, ” which set forth the terms of the relationship between DISH and Open Orbit. (ECF No. 38-1.) To “induce [DISH] to enter into the DISH Network Retailer Agreement” with Open Orbit, Mr. Ghosh signed a personal guaranty in which he “personally, unconditionally and irrevocably guarantee[d] the full and timely performance of and by [Open Orbit] for all purposes under the Retailer Agreement.” (ECF No. 38-2 at 1.)

         In July 2015, DISH initiated arbitration against Open Orbit for various violations of the retailer agreement. A few months later, Mr. Ghosh asked the arbitrator to remove his name from the pending arbitration because he was neither an officer nor a shareholder of Open Orbit and to “nullify” his personal guaranty. (ECF No. 38-3.) The arbitrator denied Mr. Ghosh's request to nullify his personal guaranty, as well as his repeated requests for reconsideration. (ECF Nos. 38-3, 38-4, 38-5.) However, the arbitrator recognized that Mr. Ghosh was “not a party to this arbitration.” (ECF No. 38-3.)

         In June 2016, the arbitrator held an evidentiary hearing regarding DISH's claims against Open Orbit. Neither Mr. Ghosh nor Open Orbit appeared at the hearing. After the hearing, the arbitrator awarded DISH $220, 609.54, comprised of $177, 817.24 in actual damages and $42, 792.30 in administrative expenses, costs and attorneys' fees. (ECF No. 38-7 at 2.) The arbitrator also awarded post-judgment interest. Id. The award was “in favor of Claimant DISH Network L.L.C., as against Respondent Open Orbit Corporation.” (Id.)

         DISH filed a motion to confirm the arbitration award with this Court under the Federal Arbitration Act (ECF No. 1), and Mr. Ghosh filed a motion for relief from the award (ECF No. 7). Magistrate Judge Shaffer recommended granting the motion to confirm the arbitration award against Open Orbit and entering default judgment against Open Orbit, which had not appeared in this Court to defend the case. (ECF No. 28.) With respect to Mr. Ghosh, Magistrate Judge Shaffer recommended granting his motion (in pertinent part) and dismissing the claim against him under Federal Rule of Civil Procedure 12(b)(6) without prejudice. (Id.) Judge Shaffer reasoned that because Mr. Ghosh was not a party to underlying arbitration and because DISH had not argued the award should be enforced against him as a non-party, its application to enforce the award against Mr. Ghosh was deficient. (Id. at 2-8). I accepted Judge Shaffer's recommendations in full. (ECF No. 31.)

         DISH then filed an amended application to enforce the award, arguing that in light of Mr. Ghosh's personal guaranty, this Court should enforce the arbitration award against him even though he was not a party to the underlying arbitration. Mr. Ghosh opposed the amended application. After reviewing those materials, I entered a show cause order directing DISH to address why the case should not be sent back to arbitration, consistent with arbitration provision in the personal guaranty signed by both DISH and Mr. Ghosh. (ECF No. 42.) Both DISH and Mr. Ghosh responded to the show cause order. (ECF Nos. 43-44.)

         II. ANALYSIS

         Confirming an arbitration award is usually perfunctory. As provided in section nine of the Federal Arbitration Act (“FAA”), a party submits an application, the district court reviews the award, and the district court “must” grant the application except in unusual circumstances:

If the parties in their agreement have agreed that a judgment of the court shall be entered upon the award made pursuant to the arbitration, and shall specify the court, then at any time within one year after the award is made any party to the arbitration may apply to the court so specified for an order confirming the award, and thereupon the court must grant such an order unless ...

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