Terrier Media Buyer, Inc. v. DISH Network L.L.C.
MEMORANDUM Opinion and Order: Terrier Media Buyer, Inc. sued DISH Network for copyright infringement. DISH moved to dismiss. R. 36 . DISH's motion is granted. Terrier's claim is dismissed without prejudice. If Terrier believes it has a cla im for copyright damages outside of the period of the TRO, it may move for leave to file an amended complaint by October 5, 2020. The motion should attach a redlined comparison between the current complaint and the proposed amended complaint, and sho uld be supported by a brief of no more than five pages describing how the proposed amended complaint cures the deficiencies identified here. If no motion is filed by October 5, 2020, the case will be dismissed with prejudice. Signed by the Honorable Thomas M. Durkin on 9/14/2020. Mailed notice. (ecw, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
TERRIER MEDIA BUYER, INC., d/b/a COX
No. 20 C 583
Judge Thomas M. Durkin
DISH NETWORK, L.L.C.,
MEMORANDUM OPINION AND ORDER
Terrier Media Buyer, Inc. sued DISH Network for copyright infringement.
DISH moved to dismiss. R. 36. DISH’s motion is granted.
A Rule 12(b)(6) motion challenges the “sufficiency of the complaint.” Berger v.
Nat. Collegiate Athletic Assoc., 843 F.3d 285, 289 (7th Cir. 2016). A complaint must
provide “a short and plain statement of the claim showing that the pleader is entitled
to relief,” Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with “fair notice” of
the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
This standard “demands more than an unadorned, the-defendant-unlawfullyharmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed
factual allegations” are not required, “labels and conclusions, and a formulaic
recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
The complaint must “contain sufficient factual matter, accepted as true, to ‘state a
claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly,
550 U.S. at 570). “‘A claim has facial plausibility when the plaintiff pleads factual
content that allows the court to draw the reasonable inference that the defendant is
liable for the misconduct alleged.’” Boucher v. Fin. Sys. of Green Bay, Inc., 880 F.3d
362, 366 (7th Cir. 2018) (quoting Iqbal, 556 U.S. at 678). In applying this standard,
the Court accepts all well-pleaded facts as true and draws all reasonable inferences
in favor of the non-moving party. Tobey v. Chibucos, 890 F.3d 634, 646 (7th Cir. 2018).
In June 2018, DISH Network and Northwest Broadcasting, Inc. entered into
an agreement that permitted DISH to retransmit various local television stations to
its subscribers (the “Northwest Retransmission Agreement”). R. 35 ¶ 19. The
Northwest Retransmission Agreement included an “After-Acquired Stations”
provision. Id. ¶ 20. That provision provides that any broadcast station acquired by
Northwest or its affiliates would be governed by the Northwest Retransmission
Agreement notwithstanding any other retransmission agreement the station had
with DISH. Id.
On December 17, 2019, Terrier Media Buyer acquired Northwest’s parent
company NBI Holdings, and NBI subsequently acquired 13 local television stations
from Cox Enterprises (the “Cox stations”). Id. ¶¶ 21-22. 1 The Cox stations had
previously been governed by a separate retransmission agreement with DISH (the
“Cox Retransmission Agreement”). Id. ¶ 24. The Cox Retransmission Agreement
The order in which these acquisitions closed is the subject of much dispute in the
related case pending before this Court, DISH Network L.L.C. v. Cox Media Group,
LLC et al., 20-cv-570 (N.D. Ill.). For purposes of this motion, the Court accepts the
version of events detailed in Terrier’s complaint.
included a “Station Change in Control” provision that provided for the termination of
the Agreement if the Cox stations became governed by a different retransmission
agreement. Id. Under that provision and the Northwest Retransmission Agreement’s
After-Acquired Stations provision, the Cox stations became subject to the Northwest
Retransmission Agreement and the Cox Retransmission Agreement terminated. Id.
The Northwest Retransmission Agreement was to expire on December 31,
2019. Id. ¶ 26. After several extensions during the parties’ negotiations regarding the
rates DISH would have to pay in a new retransmission agreement, the Northwest
Retransmission agreement expired at 7:00 p.m. on January 18, 2020. Id. As of that
time, Terrier withheld its consent for DISH to retransmit the Cox stations. Id.
On January 15, 2020, DISH obtained a temporary restraining order ex parte
in Illinois state court that enjoined Terrier from prohibiting DISH from
retransmitting the Cox stations. Id. ¶ 27. After hearing argument from the parties
several days later, the state court entered an order on January 24 extending the TRO
against Terrier. Id. ¶ 28. 2 On the same day that order was issued, Terrier filed this
copyright infringement lawsuit. Id. ¶ 30. Terrier also sent a letter to DISH stating
that any retransmission of the Cox stations after the January 18 expiration of the
Northwest Retransmission Agreement is a knowing and willful infringement of the
copyrights of that television programming. Id. ¶ 32. DISH continued to retransmit
Also on January 24, Terrier removed the case to federal court. At a status hearing
on February 20, the parties agreed to extend the TRO. See 20-cv-570, R. 60. This
Court subsequently denied DISH’s motion for a preliminary injunction and dissolved
the TRO. See R. 129.
the Cox stations after the expiration of the Northwest Retransmission Agreement.
Id. ¶¶ 31, 34. DISH moved to dismiss Terrier’s copyright infringement claim.
To state a claim for copyright infringement, Terrier must allege two elements:
“(1) ownership of a valid copyright, and (2) copying of constituent elements of the
work that are original.” Muhammad-Ali v. Final Call, Inc., 832 F.3d 755, 760 (7th
Cir. 2016) (quoting Peters v. West, 692 F.3d 629, 632 (7th Cir. 2012)). DISH does not
contend that Terrier has failed to adequately allege those elements. Rather, DISH
argues that it has a valid license to retransmit Terrier’s copyrighted works. The
existence of a license is an affirmative defense to a claim of copyright infringement.
Id. at 761 (quoting I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996)). Generally,
“[c]omplaints need not anticipate or plead around affirmative defenses.” Leavell v.
Kieffer, 189 F.3d 492, 494 (7th Cir. 1999) (citing Gomez v. Toledo, 446 U.S. 635, 640
(1980)). However, a motion to dismiss based on an affirmative defense may be granted
when “the allegations of the complaint itself set forth everything necessary to satisfy
the affirmative defense[.]” United States v. Lewis, 411 F.3d 838, 842 (7th Cir. 2005).
The sole issue here is whether DISH had consent to retransmit the Cox
stations. Section 122 of the Copyright Act establishes a statutory license for satellite
carriers to retransmit copyrighted programming embedded in a television broadcast
station’s signal into the station’s local market. 17 U.S.C. § 122(a)(1). However, the
license is conditioned upon satellite carriers’ compliance “with the rules, regulations,
or authorizations of the Federal Communications Commission governing the carriage
of television broadcast station signals.” Id. § 122(a)(1)(B). FCC rules prohibit
retransmitting a station’s signal without the broadcaster’s consent. See 47 C.F.R. §
76.64; 47 U.S.C. § 325(b). If a satellite carrier retransmits local broadcast signals
without consent in violation of the FCC’s rules and regulations, it cannot avail itself
of the statutory license and is liable for copyright infringement. 17 U.S.C. 122(d).
DISH argues that it is clear from the face of the TRO, which Terrier references
in the complaint, that it had consent to retransmit the Cox stations. R. 21-2 ¶ 2. 3 The
Court finds this argument persuasive. The complaint alleges that Terrier began
withholding its consent to retransmit the Cox stations on January 18, 2020. But the
TRO, which was entered January 15, states that the Cox Retransmission Agreement
remains “in full force and effect until further order of this Court.” Id. Because the Cox
Retransmission Agreement gave DISH consent to retransmit the Cox stations, see R.
35 ¶ 24, and the TRO expressly kept that agreement in full force and effect, DISH
had consent to retransmit the stations during the period in which Terrier alleges
Terrier argues that the TRO was not intended to prevent it from seeking
copyright damages. To support its position, Terrier points to paragraph 5 of the TRO,
which states that: “[t]his Order does not prevent any Defendant [including Terrier]
The Court may consider the TRO and the TRO hearing transcript without
converting DISH’s motion to dismiss into a motion for summary judgment both
because they are matters of public record and because they are critical to the
complaint and referred to in it. See Geinosky v. City of Chicago, 675 F.3d 743, 746 n.1
(7th Cir. 2012).
from asserting a right to monetary relief for copyright infringement or Plaintiff from
asserting any defenses thereto.” R. 21-2 ¶ 5. This language makes clear that the TRO
does not enjoin Terrier from filing a lawsuit. See also R. 21-9 at 68:9-12 (“I’m not
trying to prevent the defendants from having access to the federal courts or to this
court in the [copyright] counterclaim.”); id. at 34:21-35:5 (Q: “I don’t think, Judge,
that you intended in your TRO to say to the defendants, ‘You don’t have a right to go
to federal court and say, copyright damages.’ I don’t think you intended that --” A:
“You can be assured I didn’t say that, and I would never -- I don’t think it’s enforceable
to begin with, and I would never suggest that. You can do what you want.”). But nor
does the TRO prevent DISH “from asserting any defenses thereto,” including that it
had consent to retransmit the stations because the TRO kept the Cox Retransmission
Agreement in full force and effect.
Terrier contends that it would be nonsensical for the TRO to permit it to file a
lawsuit but prevent it from arguing DISH lacked consent to retransmit. But the TRO
does not prevent Terrier from making that argument any more than it guarantees it
will be successful. Indeed, while Terrier would have the Court interpret the TRO as
permitting it to recover copyright damages during the TRO’s pendency, the TRO
expressly states that “[t]he court takes no position as to the effect of this Temporary
Restraining Order in any such copyright infringement lawsuit, including one
asserting any claim for damages based on a finding of infringement during the period
of the Temporary Restraining Order.” R. 21-2 ¶ 5 (emphasis added).
Importantly, in granting the TRO, the state court wanted to prevent DISH
from having to choose between stopping its retransmission of the Cox stations or
facing potentially ruinous copyright damages. The court explained that DISH “could
lose the ability to retransmit any broadcasting station signal anywhere due to an
alleged and feared copyright infringement . . . they’d be out of their minds to try and
[retransmit the stations] and risk that kind of a damage because . . . they could lose
up to $250 million plus another $35 million every six months in damages. Damages
for copyright infringement, therefore, could be draconian and affect DISH’s ability to
compete in the marketplace, if at all.” R. 21-9 at 60:18-61:9. If the TRO permitted
Terrier to collect copyright damages during its pendency, it would render
meaningless the court’s reason for granting it.
Terrier contends that if the TRO prevents it from recovering copyright
damages during its pendency, it would impermissibly “override” its copyright rights
and “exempt DISH from [its] obligations under federal law.” R. 41 at 16. But if DISH
is correct that the Cox Retransmission Agreement remains valid and enforceable (as
reflected in the TRO keeping that agreement in full force and effect), then DISH is
complying with its obligation to get consent to retransmit the stations (and paying
Terrier for that right). R. 21-7 at 18:21-24; R. 21-9 at 13:7-9. Rather, Terrier’s actual
argument appears to be that its copyright rights would be violated if it cannot pursue
damages and the TRO was entered erroneously – that is, the Cox Retransmission
Agreement terminated and so DISH did not have consent to retransmit the Cox
stations during the period the TRO was in effect. But an erroneously entered TRO
does not give rise to a separate cause of action for conduct that the TRO permits. See
In re UAL Corp., 412 F.3d 775, 779 (7th Cir. 2005) (“A person injured by the issuance
of an injunction later determined to be erroneous has no action for damages absent a
bond.”) (quoting W.R. Grace & Co v. Rubber Workers, 461 U.S. 757, 770 n.14 (1983));
see also Coyne-Delaney Co., Inc. v. Capital Dev. Bd. of State of Ill., 717 F.2d 385, 39394 (7th Cir. 1983). 4 This is for good reason; to permit a party to be sued for relying on
a court order would be a grave miscarriage of justice. In sum, because the TRO
ordered that the Cox Retransmission Agreement remained in full force and effect,
DISH had consent to retransmit the Cox stations during the its pendency. And
because Terrier bases its copyright claim on DISH not having had consent to
retransmit the stations during that period, its claim fails.
For the reasons stated, DISH’s motion to dismiss  is granted.
Nevertheless, it is unclear from the record whether DISH continued to retransmit the
Cox stations after this Court dissolved the TRO. For this reason, Terrier’s claim is
dismissed without prejudice. If Terrier believes it has a claim for copyright damages
outside of the period of the TRO, it may move for leave to file an amended complaint
by October 5, 2020. The motion should attach a redlined comparison between the
current complaint and the proposed amended complaint, and should be supported by
The state court did not require DISH to post a bond, see R. 21-9 at 68:16-18, and
Terrier did not raise the issue when that case was removed to federal court. This is
perhaps in part because DISH represents that it has continued to pay Terrier (and
its affiliates) the monthly retransmission fees required under the Cox Retransmission
Agreement while the TRO remained in effect.
a brief of no more than five pages describing how the proposed amended complaint
cures the deficiencies identified here. If no motion is filed by October 5, 2020, the case
will be dismissed with prejudice.
Honorable Thomas M. Durkin
United States District Judge
Dated: September 14, 2020
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?