DISH Network Corporation et al v. Arch Specialty Insurance Company et al

Filing 162

ORDER denying 157 Motion to Stay. Discovery due by 7/27/2012. Dispositive Motions due by 8/24/2012, by Judge John L. Kane on 7/12/12.(sgrim)

UNITED STATES DISTRICT COURT
DISTRICT OF COLORADO
Judge John L. Kane
Civil Action No. 09-cv-00447-JLK
DISH NETWORK CORPORATION, and
DISH NETWORK LLC,
Plaintiffs,
v.
ARCH SPECIALTY INSURANCE COMPANY,
ARROWOOD INDEMNITY COMPANY,
TRAVELERS INDEMNITY COMPANY OF ILLINOIS,
XL INSURANCE AMERICA, INC., and
NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH, PA,
Defendants.

ORDER
Kane, J.
This matter is currently before me on Plaintiffs’ Motion to Stay Proceedings (doc. 157).
Based on the forthcoming discussion, Plaintiffs’ motion is DENIED.
Background
The instant controversy arises out of a patent infringement action pending against
Plaintiffs in the Central District of California (“Katz lawsuit”). Plaintiffs filed this suit, seeking
to establish that the commercial general liability policies issued by Defendants give rise to a duty
to defend and indemnify them against a claim of patent infringement. The parties agreed to
simplify the case by proceeding in multiple phases, first addressing whether the Katz lawsuit
triggered the Defendant Insurers’ duty to defend DISH.
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On August 19, 2010, I granted Defendant Insurers summary judgment, finding that the
underlying claims for patent infringement did not fall potentially within the “advertising injury”
coverage contained in the relevant commercial general liability policies. On appeal, the Tenth
Circuit reversed my ruling and remanded this case for further proceedings. After reviewing the
Tenth Circuit’s opinion and its mandate, I found it proper to allow Defendants to raise additional
defenses preserved in their Answers to Plaintiffs’ Complaint, but not previously raised in their
initial motions for summary judgment.
Plaintiffs object to my interpretation of the Tenth Circuit’s opinion and mandate, and
they have filed a petition seeking a writ of mandamus requesting that the Tenth Circuit direct me
to enter judgment in their favor on the duty of the primary insurers to defend. They have filed
the instant motion, seeking a stay of these proceedings pending the Tenth Circuit’s resolution of
their mandamus petition.
Discussion
In order to demonstrate that a stay of these proceedings is appropriate, Plaintiffs must
establish: (1) the threat of irreparable harm if the stay is not granted; (2) the absence of harm to
opposing parties if the stay is granted; (3) any risk of harm to the public interest; and (4) the
likelihood of success on appeal. Fed. Trade Comm’n v. Mainstream Marketing Servs., Inc., 345
F. 3d 850, 852 (10th Cir. 2003). I address each seriatim.
Threat of Irreparable Harm if the Stay is Not Granted
In the absence of a stay, Plaintiffs will be forced to continue litigating whether a coverage
exclusion, or other affirmative defense, obviates the potential duty to defend arising from the
advertising injury coverage of Defendants’ commercial general liability policies. Plaintiffs

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assert this will impose an “onerous financial burden,” and is contrary to Colorado law. If, as
Plaintiffs argue, the Tenth Circuit has definitively determined that the primary insurers have a
duty to defend, this injury would indeed result. This factor weighs in favor of the requested stay.

Harm to Opposing Parties
Neither party suggests, and I fail to find, that any harm to Defendants would result were I
to grant the requested stay. This factor weighs in favor of the requested stay.
Risk of Harm to Public Interest
Plaintiffs argue that the public has a significant interest in avoiding the costs imposed by
unnecessary, duplicitous litigation. If, as Plaintiffs argue, the Tenth Circuit has definitively
determined that the primary insurers have a duty to defend, these interests would be harmed. As
Plaintiffs note, however, the public also has an interest in the timely determination of this matter.
Although the Tenth Circuit has set this matter for briefing, neither I nor the parties can anticipate
when the Tenth Circuit will actually rule on Plaintiffs’ petition. An indefinite stay does not
serve the public’s interest in the “speedy” determination of this case. Accordingly, this factor
weighs neither in favor of nor against the requested stay.
Likelihood of Success on Appeal
Although, Plaintiffs argue the likelihood of success requirement should be somewhat
relaxed, they have failed to establish that the three harm factors tip decidedly in their favor.
Mainstream Marketing Servs., Inc., 345 F.3d at 852. Thus, I must determine whether Plaintiffs

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are likely to succeed on the merits of their mandamus petition.1
Notwithstanding Plaintiffs’ argument to the contrary, I remain firmly convinced that the
Tenth Circuit’s reversal and remand does not definitively resolve whether the primary insurers
have a duty to defend in this case. Further proceedings to determine the applicability of any
policy exclusions or other affirmative defenses are consistent with the Tenth Circuit’s mandate.
This factor weighs against the requested stay.
Conclusion
Plaintiffs have failed to demonstrate that a stay of these proceedings pending the Tenth
Circuit’s resolution of their mandamus petition is appropriate. Accordingly, their Motion to Stay
Proceedings (doc. 157) is DENIED. Because of the delay in these proceedings occasioned by
Plaintiffs’ motion, the deadlines in this case shall be re-set as follows:
Discovery Cut-Off:

July 27, 2012

Dispositive Motion Deadline:

August 24, 2012

Dated: July 12, 2012

BY THE COURT:
/s/ John L. Kane
Senior U.S. District Court Judge

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Even were I to apply a relaxed standard, Plaintiffs’ arguments do not present
“questions going to the merits so serious, substantial, difficult, and doubtful as to make the issue
ripe for litigation and deserving of more deliberate investigation.” Mainstream Marketing
Servs., Inc., 345 F.3d at 852-53.
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