Stokes v. Dish Network LLC

Filing 35

ORDER entered by Judge Nanette Laughrey. DISH's Motion to Dismiss, 16 , is denied with respect to Counts I and II and granted with respect to Counts III through VI. This matter is certified for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). (Cross, Ashley)

IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF MISSOURI
CENTRAL DIVISION
NEIL STOKES and CRAIG FELZIEN, on
)
behalf of themselves and all others similarly )
situated,
)
)
Plaintiffs,
)
)
v.
)
)
DISH NETWORK L.L.C., a Colorado
)
Limited liability corporation,
)
)
Defendant.
)

Case No. 2:14-cv-04338-NKL

ORDER
Before the Court is Defendant DISH Network’s Motion to Dismiss Plaintiff Neil Stokes’
claims arising out of an interruption of his satellite television service. [Doc. 16]. For the reasons
set forth below, DISH’s Motion to Dismiss is denied as to Counts I and II and granted with
respect to Counts III through VI.
I.

Background
Defendant DISH Network is a Colorado corporation that markets and sells satellite

television access packages nationwide. The programming packages DISH markets and sells
include different combinations of channels depending on the package. Plaintiffs Neil Stokes, in
2008, and Craig Felzien, in 2000, (collectively Plaintiffs) ordered and selected one of DISH’s
programming packages. Immediately after installing the satellite equipment in Plaintiffs’ homes,
a DISH representative presented them with a Subscription Agreement. The Subscription
Agreement is comprised of the Digital Home Advantage Plan Agreement (Plan Agreement) and
the Residential Customer Agreement (RCA).
The Plan Agreement, which Plaintiffs signed, contains the following relevant provisions:
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This agreement (the “Agreement”) sets forth the terms and
conditions of the Digital Home Advantage promotion. Additional
terms and conditions of service are contained in the Residential
Customer Agreement provided to you in your receiver User’s
Guide and made available at www.dishnetwork.com.
BY SIGNING BELOW YOU ACKNOWLEDGE AND AGREE
THAT YOU HAVE RECEIVED, READ, UNDERSTAND, AND
AGREE TO BE BOUND BY ALL OF THE TERMS AND
CONDITIONS OF THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION, THE TERMS AND CONDITIONS
SET FORTH ON ITS SECOND PAGE, AND THE
RESIDENTIAL CUSTOMER AGREEMENT, WHICH IS
INCORPORATED HEREIN BY REFERENCE, AND THAT
THE FOLLOWING TERMS WERE DISCLOSED TO YOU
PRIOR TO LEASE:
...
WE RESERVE THE RIGHT TO CHANGE PRICES,
PACKAGES, AND PROGRAMMING AT ANY TIME,
INCLUDING WITHOUT LIMITATION, DURING ANY
TERM AGREEMENT PERIOD TO WHICH YOU HAVE
AGREED.
...
[Doc. 4-1].
Plaintiffs also received the RCA after installation of the satellite equipment. The RCA,
which was located in the back of a 156-page Satellite Receiver User’s Guide, contains the
following relevant provisions:
1. THE DISH NETWORK SERVICE
...
I. Changes in Services Offered. We may add, delete, rearrange
and/or change any and all programming . . . including without
limitation, during any term commitment period to which you have
agreed. . . . In the event that we delete, rearrange or change any
programming . . . we have no obligation to replace or supplement
such programming . . . . You are not entitled to any refund because
of a deletion, rearrangement or change of any programming . . . .
[Doc. 4-3, p. 3].
3. CANCELLATION OF SERVICE
2

...
D. No Credits. If your Services are cancelled or disconnected for
any reason, you still must pay all outstanding balances
accrued . . . . Except in certain limited circumstances, charges for
Services, once charged to your account, are non-refundable, and no
refunds or credits will be provided in connection with the
cancellation of Services. . . .
[Doc. 4-3, p. 5].
7. LIMITATION OF OUR LIABILITY
A. INTERRUPTIONS AND DELAYS. NEITHER WE NOR
OUR THIRD-PARTY BILLING AGENTS . . . WILL BE
LIABLE FOR ANY INTERRUPTION IN ANY SERVICE OR
FOR ANY DELAY OR FAILURE TO PERFORM, INCLUDING
WITHOUT LIMITATION: IF SUCH INTERRUPTION, DELAY
OR FAILURE TO PERFORM ARISES IN CONNECTION WITH
THE TERMINATION OR SUSPENSION OF DISH
NETWORK’S ACCESS TO ALL OR ANY PORTION OF
SERVICES; THE RELOCATION OF ALL OR ANY PORTION
OF THE SERVICES TO DIFFERENT SATELLITE(S); A
CHANGE IN THE FEATURES AVAILABLE WITH YOUR
EQUIPMENT; ANY SOFTWARE OR OTHER DOWNLOADS
INITIATED BY US; OR ANY ACTS OF GOD, FIRES,
EARTHQUAKES, FLOODS . . . OR ANY OTHER CAUSE
BEYOND OUR CONTROL.
...
F. DAMAGES LIMITATION. NEITHER WE NOR OUR
THIRD-PARTY BILLING AGENTS . . . SHALL HAVE ANY
LIABILITY WHATSOEVER FOR ANY SPECIAL, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR RELATING TO: . . . OUR FURNISHING OR
FAILURE TO FURNISH ANY SERVICES . . . TO YOU; OR
ANY FAULT, FAILURE, DEFICIENCY OR DEFECT IN
SERVICES . . . FURNISHED TO YOU.
[Doc. 4-3, pp. 7-8].
The programming package selected and paid for by Stokes was the “America’s Top 120,”
which included channels such as CNN, Headline News, CNN en Espanol, the Cartoon
Network/Adult Swim, Turner Classic Movies, truTV, Boomerang, and The Hub (collectively,
Turner Programming) and FOX News Channel and FOX Business Network (collectively, FOX

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News Programming). Felzien selected “America’s Top 250,” which also included Turner and
FOX News Programming. DISH did not provide Turner Programming from October 21, 2014,
to November 20, 2014. DISH has not provided FOX News Programming since December 21,
2014, but continues to advertise and sell programming packages that purport to include FOX
News Programming. DISH refused to provide Plaintiffs a full credit and/or reduction in DISH’s
monthly fees or any other monetary relief for the lost programming and refused to permit
subscribers with packages containing this programming to terminate their contract with DISH
without a termination fee. Plaintiffs now seek compensation, declaratory judgment, and
injunctive relief arising out of the following claims: (I) breach of contract; (II) breach of the
covenant of good faith and fair dealing; (III) unjust enrichment; (IV) Colorado Consumer
Protection Act; (V) Missouri Merchandising Practices Act; and (VI) declaratory judgment.
II.

Discussion
A. Counts I-II: Breaches of Contract and the Covenant of Good Faith and Fair Dealing
Plaintiffs allege DISH breached its contract with them by agreeing to provide Turner and

FOX News Programming to them in exchange for a payment, collecting that payment from them,
and failing to provide the programming. [Doc. 4, ¶¶ 63-63]. Plaintiffs further allege DISH
breached the covenant of good faith and fair dealing by collecting money from them for
programming that it did not provide and refusing to provide Plaintiffs a credit for that failure. Id.
at ¶¶ 67-68.
At the outset of this discussion, the Court notes that it has previously interpreted the same
Subscription Agreement (comprised of the Plan Agreement and the RCA) under very similar
facts and arguments in Padberg v. DISH Network, LLC, 2012 WL 2120765 (W.D. Mo. 2012),
and denied a similar Motion to Dismiss filed by DISH. Accordingly, the Court will first discuss

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its decision in Padberg and then address any new arguments presented by DISH in this case. In
Padberg, the plaintiff alleged, among other claims, breach of contract and breach of the covenant
of good faith and fair dealing arising out of DISH’s failure to provide FX and regional sports
channels from October 1, 2010, to October 29, 2010, and its refusal to compensate subscribers
who paid for those channels but did not receive access to them. Id. at *1-2. Like in this case,
DISH filed a Motion to Dismiss and argued that the express terms of the Subscription Agreement
– which were identical to the terms in this case – contradicted the plaintiff’s breach of contract
and good faith and fair dealing claims. DISH argued that the express terms of the Subscription
Agreement permitted DISH to change prices, packages and programming at any time and to add,
delete, rearrange and/or change any and all programming without providing supplemental
programming or a refund to subscribers. Id. at *3. The plaintiff argued that if the Court
interpreted the Subscription Agreement to give DISH discretion to change his programming at
any time, then his agreement with DISH was illusory, and therefore unenforceable, because the
agreement entitled DISH to collect monthly payments from him regardless of whether DISH
supplied him with any satellite programming and allowed DISH to do so without providing any
recompense to him. Id.
This Court concluded that the agreement was not illusory because although the
Subscription Agreement granted DISH the discretion to change the plaintiff’s programming at
any time, under Colorado law, 1 the Subscription Agreement contained an implied duty of good
faith and fair dealing. Id. Pursuant to that implied duty, DISH’s discretion to add, delete or
change programming must be exercised reasonably. Id. This Court further concluded that the
implied duty of good faith and fair dealing did not contradict the express terms of the

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Like in Padberg, Colorado law applies in this case as well. The Subscription Agreement, which is enforceable,
provides that Colorado law governs, and neither Party appears to contest this conclusion.

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Subscription Agreement because although a provision in the Subscription Agreement prohibited
refunds (RCA, § 1.I, [Doc. 4-3, p. 3]), that provision did not mean a credit going forward for lost
programming or a future change in price reflecting the lost services was not within the
reasonable expectations of the parties. Id. at *4.
DISH also argued that Section 7 of the RCA precluded the plaintiff from pursuing a claim
for the breach of a duty of good faith and fair dealing. Again, Section 7.A provides:
7. LIMITATION OF OUR LIABILITY
A. INTERRUPTIONS AND DELAYS. NEITHER WE NOR
OUR THIRD-PARTY BILLING AGENTS . . . WILL BE
LIABLE FOR ANY INTERRUPTION IN ANY SERVICE OR
FOR ANY DELAY OR FAILURE TO PERFORM, INCLUDING
WITHOUT LIMITATION: IF SUCH INTERRUPTION, DELAY
OR FAILURE TO PERFORM ARISES IN CONNECTION WITH
THE TERMINATION OR SUSPENSION OF DISH
NETWORK’S ACCESS TO ALL OR ANY PORTION OF
SERVICES; THE RELOCATION OF ALL OR ANY PORTION
OF THE SERVICES TO DIFFERENT SATELLITE(S); A
CHANGE IN THE FEATURES AVAILABLE WITH YOUR
EQUIPMENT; ANY SOFTWARE OR OTHER DOWNLOADS
INITIATED BY US; OR ANY ACTS OF GOD, FIRES,
EARTHQUAKES, FLOODS . . . OR ANY OTHER CAUSE
BEYOND OUR CONTROL.
The Court stated that while at first blush Section 7.A seems to say that DISH cannot be held
liable for any interruption or delay of any or all programs for any period of time or for a failure
to perform, “[s]uch an interpretation would of course render the contract illusory.” Id. However,
the Court looked at Section 7.A in context with the entire contract and concluded that two
additional parts of the contract demonstrated that the parties did not intend DISH to have the
“extreme and unexpected breadth of discretion” suggested by the first clause in Section 7.A
limiting liability for interruptions, delays and failure to perform. Id. The Court stated:
Of primary importance is the last phrase in that same sentence. It
says: “or any other cause beyond our reasonable control.”
[Exhibit 4 at 8]. This suggests that Dish Network’s liability is
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limited only when the circumstances are beyond Dish Network’s
control, a concept completely consistent with the duty of the good
faith and fair dealing and most likely to reflect the intentions of the
parties at the time the agreement was formed. Further, it is an
interpretation that prevents the contract from being illusory.
Second, the last paragraph of Section 7 of the Residential
Customer Agreement limits damages “for furnishing or failing to
furnish any service”. It provides that there will be “no special,
indirect, incidental or consequential damages” for failing to furnish
services. If Dish Network had no liability for “failure to perform”
or for interruptions of services over which it had control, there
would be no need to talk about how damages will be limited when
services are not provided. Therefore, it is logical to interpret the
Residential Customer Agreement to mean that Dish Network’s
liability was limited when an interruption in service or a failure to
perform was caused by events beyond the control of Dish
Network.
Id. The Court concluded that it could not say the plaintiff’s breach of contract and good faith and
fair dealing claims were implausible, “because the operative question is whether it was
reasonable for Dish Network to stop providing the Fox channel, keep the payments it would have
been paying previously for the channel and provide no recompense to its customers.” Id. at *5.
In DISH’s present Motion to Dismiss, DISH repeats many of the arguments it made
previously in Padberg. Compare Padberg v. DISH Network, LLC, 2:11-cv-04035-NKL, [Docs.
19, 35], with Stokes v. DISH Network, LLC, 2:14-cv-04338-NKL, [Docs. 17, 23]. For the
purpose of efficiency, the Court will not repeat its reasoning for why those arguments – applied
to the same contract as in Padberg – are equally unavailing here. Nonetheless, DISH argues that
this Court cannot simply re-issue the Padberg opinion in this case because DISH has raised or
emphasized important arguments for the first time in this case.
DISH does not point out which arguments in this case are “new” or “emphasized.”
However, upon review of DISH’s arguments in Padberg and in this case, a few arguments
appear to be new to this case.

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First, DISH argues that Section 7.A limits DISH’s liability regardless of whether an
interruption in service, delay, or failure to perform was within or beyond, DISH’s reasonable
control. In support of this argument, DISH argues that Section 7.A is written in the disjunctive
(it uses “or”) and that the phrase “or any other cause beyond our reasonable control” applies only
to the last scenario in the paragraph (acts of god, fires, earthquakes, floods, etc.). However, this
Court’s previous interpretation of Section 7.A. in Padberg involved the same clause written in
the same manner, including the disjunctive form and the existence of semi-colons. Compare
Compare Padberg v. DISH Network, LLC, 2:11-cv-04035-NKL, [Docs. 1-4, 106], with Stokes v.
DISH Network, LLC, 2:14-cv-04338-NKL, [Doc. 1-3]. Interpreting Section 7.A to absolve DISH
of liability for interruptions in any service for a delay or for a failure to perform regardless of
whether the loss was within its control would render the contract illusory. See Padberg, 2012
WL 2120765 at *4. Further, as this Court has previously reasoned, if Section 7.A absolved
DISH of all liability, there would be no need for Section 7.F which limits the types of damages
available to a subscriber arising out of DISH’s failure to furnish services or DISH’s fault, failure,
deficiency or defect in services.
Next, DISH argues that interpreting 7.A to apply to circumstances both within and beyond
DISH’s reasonable control does not render Section 7.F meaningless. Instead, DISH suggests that
Section 7.A – titled “Interruptions and Delays” – is intended to apply only to temporary or partial
interruptions in service and that “its plain terms . . . set forth discrete and temporally-limited
examples of such interruptions and delay.” [Doc. 23, p. 10]. DISH contends Section 7.A
“disclaims DISH’s liability for short-term interruptions or delays, not a wholesale failure to
perform.” Id. at 11 (emphasis in original). It follows, DISH argues, that “[w]hile Section 7.A
disclaims all liability for temporary interruptions or delays, Section 7.F limits DISH’s liability to

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only direct damages under any scenario, even if DISH utterly fails to provide any services
whatsoever.” Id. (emphasis in original). Therefore, DISH reasons, Sections 7.A and 7.F may be
harmonized without interpreting Section 7.A to absolve DISH’s liability for only those instances
where interruptions in service, delay, and a failure to perform were beyond its reasonable
control.
This argument fails for two reasons. First, DISH has previously argued that the “failure to
perform” language in Section 7.A. only relates to interruptions and delay and not a separate
failure to perform. See Padberg v. DISH Network, LLC, 2:11-cv-04035-NKL, [Doc. 74, pp. 1214]. This Court rejected that argument, concluding that Section 7.A precludes liability for a
failure to perform, “separate and distinct from interruptions and delays” (when the failure is
within DISH’s reasonable control). Padberg, 2012 WL 2120765 at *4 (citing Chandler-McPhail
v. Duffey, 194 P.3d 434, 437 (Colo. App. 2007) (“[C]ourts should seek to give effect to all
provisions so that none will be rendered meaningless.”). Second, DISH’s interpretation that
Section 7.A applies to “temporary” or “short-term” interruptions and delays is not supported by
the plain language of Section 7.A. Nowhere in Section 7.A are the words “temporary” or “shortterm” used. To the contrary, Section 7.A states, in part, that DISH will not be liable for a
“failure to perform, including without limitation: . . . if such failure to perform arises in
connection with the termination or suspension of DISH Network’s access to all or any portion of
services.” (emphasis added). Section 7.A differentiates between termination and suspension of
services, which suggests the Parties contemplated both DISH’s permanent (termination) and
short-term (suspension) loss of access to programming. Further, the examples are not all
“temporally-limited” as DISH suggests. For example, a change in the features available with a
subscriber’s equipment or a software download initiated by DISH could permanently alter

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certain Services (defined as “video, audio, data, interactive and other programming services . . .”
[Doc. 4-3, Section 1.A]) provided. For these reasons, DISH’s alternative interpretation of
Sections 7.A and 7.F is unpersuasive, and the Court will not interpret those provisions in a
different manner than it did in Padberg based on those arguments.
Next, DISH argues that “Plaintiffs want to supplement the Subscri[ption] Agreement by
adding an entitlement to a ‘credit’ in the event of a temporary service interruption” but that ‘the
contract says nothing at all about Plaintiffs’ entitlement to a ‘credit.’” [Doc. 23, p. 12]. DISH
also contends that the contract expressly prohibits a “refund” and that the “credit” Plaintiffs seek
“is a refund in everything but name.” [Doc. 17, p. 18]. However, as this Court previously
pointed out in Padberg, the section of the RCA that addresses cancellation of services (Section
3.D) specifically prohibits both “credits” and “refunds” while the section dealing with changes in
programming (Section 1.I) only prohibits “refunds.” Padberg, 2012 WL 2120765 at *4. This
suggests that other remedies, such as a credit, are available when DISH exercises its discretion to
change or delete programming in an unreasonable way. Id. Further, DISH, as the author of the
RCA, is the Party who differentiated between a credit and refund in its form contract and cannot
now argue that the distinction is meaningless. See Chandler-McPhail v. Duffey, 194 P.3d at 437.
DISH also cites to McClamrock v. DISH Network, LLC, 2011 WL 7430006 (N.D. Ga.
2011), in support of its Motion to Dismiss. However, DISH previously cited to McClamrock in
Padberg, and the Court finds it no more convincing now than it did then. See Padberg v. DISH
Network, LLC, 2:11-cv-04035-NKL, [Docs. 64, 74, p. 12]. However, because the Court did not
expressly address McClamrock in its Order denying DISH’s Motion to Dismiss in Padberg, the
Court will do so now. In McClamrock, the plaintiff filed suit against DISH alleging breach of
contract arising out of DISH’s failure to provide access to FOX Sports South programming for a

10

28-day period in October 2010. McClamrock, 2011 WL 7430006 at *1. The terms of the
Subscription Agreement in that case were nearly identical to the terms at issue in this case.
DISH argued that under the terms of the RCA, it was entitled to summary judgment because the
RCA permitted DISH to “add, delete, rearrange and/or change any and all programming”
without providing a refund to customers. Id. at *3. The plaintiff argued that despite the terms in
the RCA, DISH was not entitled to summary judgment because the court should consider the
course of dealing between the parties, because the terms in the RCA were inconsistent with
another agreement signed by the plaintiff, and because the RCA was unconscionable and
therefore, unenforceable. Id. The district court concluded that the course of dealing between the
parties should not be considered because it directly contradicted and negated a portion of the
RCA. Id. at *6. The district court further concluded that the RCA did not conflict with another
limited liability provision signed by the plaintiff, and that even if there was a conflict, the
plaintiff failed to explain how DISH’s limited liability for occurrences beyond its control
affirmatively imposed liability for its failure to provide programming for 28 days, even if this
failure was within DISH’s control. Id. The court also reasoned that even if the failure to provide
programming was within DISH’s reasonable control, other portions of the 2009 RCA still
immunized DISH from liability, particularly, the provision allowing DISH to “add, delete,
rearrange and/or change programming” without supplementing the programming or providing a
refund. Id. at *6-7. The district court also concluded that the RCA was not unconscionable.
Aside from respectfully disagreeing with the Georgia district court’s interpretation of the
Subscription Agreement, the Court finds this case distinguishable from McClamrock in at least
two important ways. First, in McClamrock, the plaintiff conceded that “the RCA contains an
unlimited disclaimer which otherwise would absolve DISH of all failures to deliver, including

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those failures it controls” but argued the RCA’s terms were superseded by terms in another form
signed by the plaintiff. See Pl.’s Sugg. in Opp. to Mtn. to Dismiss in McClamrock v. DISH
Network LLC, 10-cv-03593-CAP (N.D. Ga.) [Doc. 20, p. 10] (emphasis in original). However,
in this case, Plaintiffs do not concede that the RCA provides an unlimited disclaimer of liability.
Rather, Plaintiffs allege and argue, and the Court agrees, that although the RCA grants DISH the
discretion to change programming at any time, under Colorado law, that discretion is subject to
an implied duty of good faith and fair dealing. There is no discussion in McClamrock about the
duty of good faith and fair dealing. In fact, Plaintiffs in this case separately allege breach of the
implied covenant of good faith and fair dealing while in McClamrock the only claim was breach
of contract. Plaintiffs also argue that Section 7.A of the RCA is not an unlimited disclaimer and
that it must be read in conjunction with Section 7.F. As discussed above, the Court agrees.
Second, the plaintiff in McClamrock alleged DISH breached its contract by failing or refusing to
deliver programming but alleged no facts to support how they failed or refused to deliver
programming. Amended Compl., McClamrock v. DISH Network LLC, 10-cv-03593-CAP (N.D.
Ga.) [Doc. 4, ¶¶ 21-24]. In this case, Plaintiffs allege that DISH knew and understood its
carriage agreements with Turner Broadcasting System and FOX would expire but chose not to
renew the agreements. [Doc. 4, ¶¶ 40-41, 44-45]. For these reasons, the Court does not find the
Georgia district court’s interpretation of the Subscription Agreement controlling.
Finally, in its written briefs in support of dismissal, DISH argues the Subscription
Agreement cannot be illusory because DISH performed – at least in part – under the Subscription
Agreement by providing hundreds of channels to Plaintiffs during the interruption. DISH argues
that its contract performance defeats any claim that the contract is illusory under the facts

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alleged. [Doc. 17, p. 21]. In support of this argument, DISH cites to O’Hara Group Denver,
LTD. V. Marcor Housing Sys., Inc., 595 P.2d 679 (Colo. 1979).
In O’Hara, a buyer entered into two contracts for the purchase of commercial properties.
O’Hara, 595 P.2d at 681. As part of the agreements, the buyer placed money in an escrow
account to serve as liquidated damages in the event it did not honor its obligations under the
contract. When the buyer did not show up for the closing, the seller immediately made demand
for the liquidated damages placed in escrow. Id. at 682. The buyer argued the seller was not
entitled to liquidated damages because, among other reasons, the contracts at issue were illusory
for lack of sufficient consideration and therefore, unenforceable. Id. at 683. The buyer pointed
to the terms of the agreements which stated that if the seller failed or refused to perform, the
agreements would be null and void with neither party having any further obligations thereunder.
Id. The buyer argued this clause deprived the buyer of any legal remedy and therefore
“render[ed] [the seller’s] promise to perform illusory and, hence, insufficient consideration to
support a contract.” Id. at 684. The Colorado trial court held that the seller’s right to refuse to
perform its obligations under the agreements to purchase was limited by an implicit requirement
that it act in “good faith,” thereby creating sufficient consideration. Id. On appeal, the Supreme
Court of Colorado stated that it “need not decide whether such a requirement limited [the
seller’s] freedom of action” because “certain actions taken by [the seller] pursuant to the
contracts provided sufficient consideration to validate those agreements.” Id. Specifically, the
seller withheld the commercial properties from the market for eleven months, granted the buyer
two extensions to the closing date, and allowed the buyer to enter on the properties in order to
conduct engineering studies. Id. The Supreme Court of Colorado reasoned that “[b]y these

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actions, [the seller] incurred a sufficient detriment to provide consideration for the contracts to
purchase.” Id.
O’Hara stands for the principle that a contract is not illusory for lack of consideration
once the party with the purportedly unlimited right to refuse performance has at least partially
performed. In other words, the Supreme Court of Colorado concluded that the seller’s actions
provided sufficient consideration to create binding contracts and therefore, pursuant to those
contracts, the seller was entitled to the liquidated damages held in escrow. During oral
argument, however, DISH attempted to expand the scope of O’Hara when it asserted that
according to O’Hara, once there is no concern regarding whether a contract is illusory, a court
need not conduct a good faith and fair dealing analysis. See [Doc. 32, p. 10]. 2 But O’Hara
stands for no such thing. The O’Hara court did not conclude that the doctrine of good faith and
fair dealing did not apply to the contract or should not be considered. Rather, for the sole
purpose of determining whether sufficient consideration existed to create an enforceable
contract, the Supreme Court of Colorado determined that it “need not decide whether [the
doctrine of good faith and fair dealing] limited [the seller’s] freedom of action that consideration
for its promise was present” because the seller’s actions were sufficient evidence of “detriment.”
Id. at 684. Once the Supreme Court of Colorado determined the contract was enforceable, it did
not go on to interpret the contract or the scope of the seller’s right to refuse to perform under that
contract because there was no further allegation that the seller breached the contract by refusing

2

DISH’s counsel stated,
The point of the O’Hara case is that in that case the real estate contract allows
the seller to refuse to perform and the trial court said, That sounds illusory to me
so I’m going to impose the duty of good faith on the exercise of that refusal.
The Colorado Supreme Court says, No, no, because there was partial
performance under the contract, you cannot be concerned about illusory and
therefore you do not need to impose good faith because the seller’s actions
under it provided sufficient consideration. You stop there. When you don’t
have illusory, you stop. You don’t have to go to the discretionary paragraph.

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to perform. Instead, the buyer argued no contract existed in an attempt to avoid paying
liquidated damages required by that contract. But in this case, even if the Subscription
Agreement is not illusory for lack of sufficient consideration because DISH provided hundreds
of channels during the black out, Plaintiffs are still alleging that DISH breached its contract with
them by taking money for programming it did not provide and then refusing to credit them for
that loss. DISH disputes that it owed a credit at all because according to its interpretation of the
Subscription Agreement, it has total discretion to change or delete programming without
providing recompense to the Plaintiffs. The Court agrees that DISH has discretion to change or
delete programming under the terms of the Subscription Agreement, but that discretion is limited
by the doctrine of good faith and fair dealing.
As in Padberg, this Court cannot say that Plaintiffs’ Counts I and II are implausible. The
operative question is whether it was reasonable for DISH to stop providing Turner and FOX
News Programming, keep the payments it would have been paying previously to the providers
for those channels, and provide no recompense to its customers. Such a fact question cannot be
resolved by a motion to dismiss and is a question for the jury.
B. Non-Contract Claims
1. Unjust Enrichment
In the event the Court finds the Subscription Agreement unenforceable because it is
illusory, lacking in mutuality, or unconscionable, Plaintiffs seek alternative relief through an
unjust enrichment claim. Plaintiffs allege DISH was unjustly enriched by collecting and
retaining fees from Plaintiffs for Turner and FOX News Programming in months where Plaintiffs
did not have access to Turner and FOX News Programming. “In general, a party cannot recover
for unjust enrichment by asserting a quasi-contract when an express contract covers the same

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subject matter because the express contract precludes any implied-in-law contract.” Interbank
Invs. v. Eagle River Water & Sanitation Dist., 77 P.3d 814, 816 (Colo. App. 2003). As discussed
above, DISH’s conduct is expressly covered by a valid agreement between the parties (the
Subscription Agreement), and therefore, Plaintiffs cannot recover for unjust enrichment. Count
III is dismissed.
2. Count IV: Colorado Consumer Protection Act
In Count IV, Plaintiffs seek relief pursuant to the Colorado Consumer Protection Act
(CCPA) “[i]n the event the Court determines the Subscription Agreement is unenforceable . . . .”
[Doc. 19, p. 23]. Plaintiffs’ CCPA claim is two-pronged. First, Plaintiffs allege DISH violated
various sections of the CCPA when, in late 2014, it advertised that Turner and FOX News
Programming were included in various packages even though DISH knew the programming was
not available to DISH subscribers. See First Amend. Compl., [Doc. 4, ¶¶ 78-80]. Second,
Plaintiffs allege DISH failed to disclose in advertisements its right to change or delete
programming without a credit or monetary recompense, failed to disclose the relevant dates of its
license agreements with Turner Broadcasting and FOX, charged customers for programming
they did not receive, employed “bait and switch advertising,” and refused to allow customers to
cancel their contracts without a termination fee after Turner and FOX News Programming were
no longer available. Id. at ¶¶ 81-92.
To state a claim under the CCPA, a plaintiff must allege:
(1) that the defendant engaged in an unfair or deceptive trade practice;
(2) that the challenged practice occurred in the course of defendant’s business,
vocation, or occupation;
(3) that it significantly impacts the public as actual or potential consumers of
the defendant’s goods, services, or property;
(4) that the plaintiff suffered injury in fact to a legally protected interest; and
(5) that the challenged practice caused the plaintiff’s injury.

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Rhino Linings USA, Inc. v. Rocky Mount. Rhino Lining, Inc., 62 P.3d 142, 146-47 (Colo. 2003).
To establish a “deceptive trade practice,” Plaintiffs must allege that DISH “knowingly [made] a
false representation” and that “false representation must either induce a party to act, refrain from
acting, or have the capacity to attract consumers.”
Plaintiffs’ claim that in 2014 DISH continued to advertise Turner and FOX News
Programming despite the fact that DISH knew subscribers could no longer access this
programming meets Colorado’s definition of a “deceptive trade practice.” Advertising that a
satellite television package has certain programming – when it does not – is a false
representation that has “the capacity or tendency to attract customers.” Id. at 147. But while
Plaintiffs have sufficiently alleged an “unfair or deceptive trade practice,” Plaintiffs have not
alleged that this conduct, which occurred in 2014 and continues presently, injured them.
Plaintiffs did not allege that at the time they purchased their DISH service – or even renewed
their contracts with DISH – that DISH advertised Turner and FOX News Programming knowing
that it was not available and that they were thereby damaged as a result of this misrepresentation.
To the contrary, Plaintiffs allege in their Amended Complaint that they entered into contracts
with DISH in 2000 (Felzien) and 2008 (Stokes) but allege that Turner and FOX News
Programming did not become unavailable until late 2014. Plaintiffs also failed to allege
causation. Even if Plaintiffs were injured by paying for programming they did not receive,
Plaintiffs have not alleged that DISH’s misrepresentation related to the availability of this
programming in its advertisements caused that injury. Plaintiffs had contracts with DISH and
were obligated to pay for the programming packages they selected long before DISH advertised
programs to which it knew subscribers would not have access.

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As to Plaintiffs’ claims that DISH omitted material facts in their advertisements, charged
customers for programming they did not receive, and refused to allow Plaintiffs to terminate
their contracts without a termination fee, Plaintiffs concede that this Court has previously
determined that similar fraud claims against DISH failed because the alleged deception in
DISH’s advertising was remedied by the Subscription Agreement. Plaintiffs state that their
CCPA claim is a form of alternative relief in the event the Court determines the Subscription
Agreement is unenforceable. See [Doc. 19, p. 22]; see also Padberg v. DISH Network, LLC,
2012 WL 2120765 at *5 (W.D. Mo. 2012). However, as discussed above, the Court finds the
Subscription Agreement to be enforceable, and therefore, even if DISH engaged in deceptive
advertising, that deception was remedied by the express terms of the contract read and signed by
Plaintiffs before Plaintiffs incurred any of the damages alleged in the Amended Complaint.
Plaintiffs’ CCPA claims arising from misrepresentations in programming availability fail
for lack of injury and causation, and Plaintiffs’ CCPA claims arising from statements and
omissions in DISH’s advertising fail for lack of causation. Therefore, Count IV is dismissed.
3. Count V: Missouri Merchandising Practices Act
Plaintiffs allege that the conduct alleged to violate the CCPA also violates the Missouri
Merchandising Practices Act (MMPA). To state a claim under the MMPA, Plaintiffs must allege
they (1) purchased or leased merchandise (2) primarily for personal, family or household
purposes (3) suffered an ascertainable loss of money or property, real or personal, (4) as a result
of the use or employment by another person of a method, act or practice declared unlawful by
section 407.020 of the Missouri Revised Statutes. See Mo. Rev. Stat. § 407.025.
Plaintiffs’ MMPA claims fail for the same reasons as do their CCPA claims. With
respect to Plaintiffs’ claims that DISH advertised programming it knew subscribers would not

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have access to, Plaintiffs do not allege this conduct caused them to suffer “an ascertainable loss
of money or property.” Plaintiffs had contracts with DISH and were obligated to pay for the
programming packages they selected long before DISH advertised programs to which it knew
subscribers would not have access.
As to Plaintiffs’ claims arising from statements and omissions in DISH’s advertising, like
Plaintiffs’ CCPA claim, Plaintiffs concede that this Court has previously determined that similar
fraud claims against DISH under the MMPA failed because the alleged deception in DISH’s
advertising was remedied by the Subscription Agreement. Plaintiffs state that their MMPA
claim is a form of alternative relief in the event the Court determines the Subscription Agreement
is unenforceable. See [Doc. 19, p. 22]; see also Padberg, 2012 WL 2120765 at *6. However, the
Subscription Agreement is enforceable, so even if DISH engaged in deceptive advertising, that
deception was remedied by the intervening factor of Plaintiffs reading and signing the contract.
In other words, Plaintiffs cannot show an ascertainable loss “resulting from” DISH’s actions.
Plaintiffs’ MMPA claims arising from misrepresentations in programming availability
fail for lack of injury and causation, and Plaintiffs’ MMPA claims arising from statements and
omissions in DISH’s advertising fail for lack of causation. Therefore, Count V is dismissed.
4. Count VI: Declaratory Judgment
Plaintiffs also ask in the alternative to their breach of contract and breach of the covenant
of good faith and fair dealing claims that the Court declare the Parties’ rights on four aspects of
the Subscription Agreement. “[A]ny court of the United States . . . may declare the rights and
other legal relations of any interested party seeking such declaration.” 28 U.S.C. § 2201. “A
district court may exercise its discretion and determine that a declaratory judgment serves no
useful purpose.” Cincinnati Indem. Co. v. A & K Const. Co., 542 F.3d 623, 625 (8th Cir. 2008);

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see also In re Orion Pics. Corp., 4 F.3d 1095, 1100 (2d Cir. 1993) (explaining that a district
court may reject claims for declaratory judgment on issues also presented in a direct action).
Because the Court concludes that Plaintiffs’ request for declaratory judgment serves no identified
purpose separate from Plaintiffs’ enforcement of a contract claim, the Court declines to exercise
jurisdiction to make the declarations sought by Plaintiffs. Count VI is dismissed. 3
C. Certification for Interlocutory Appeal
The Court has concluded that it should sua sponte grant leave to both Parties to pursue an
interlocutory appeal of this Order pursuant to 28 U.S.C. § 1292(b). That statute provides, in part:
(b) When a district judge, in making in a civil action an order not
otherwise appealable under this section, shall be of the opinion that
such order involves a controlling question of law as to which there
is substantial ground for difference of opinion and that an
immediate appeal from the order may materially advance the
ultimate termination of the litigation, he shall so state in writing in
such order. The Court of Appeals which would have jurisdiction of
an appeal of such action may thereupon, in its discretion, permit an
appeal to be taken from such order, if application is made to it
within ten days after the entry of the order: Provided, however,
That application for an appeal hereunder shall not stay proceedings
in the district court unless the district judge or the Court of Appeals
or a judge thereof shall so order.
28 U.S.C. § 1292(b). “Section 1292(b) establishes three criteria for certification: the district
court must be of the opinion that (1) the order involves a controlling question of law; (2) there is
substantial ground for difference of opinion; and (3) certification will materially advance the
ultimate termination of the litigation.” Union County, Iowa v. Piper Jaffray & Co., Inc., 525 F.3d
643, 646 (8th Cir. 2008). A district court certifying an order for interlocutory appeal should be
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In a section titled “Relief Requested” at the end of the Amended Complaint, Plaintiffs request that the Court enjoin
DISH from (1) collecting monthly fees for programming which they paid for but which DISH did not provide; (2)
collecting cancellation fees from Plaintiffs; and (3) continuing to advertise and market programming packages as
containing FOX Channels, or any other channel DISH stops providing to subscribers. [Doc. 4, p. 24]. However,
there is no separate claim in Plaintiffs’ Amended Complaint laying out the reasons why an injunction would be
appropriate. Further, neither DISH nor Plaintiffs mention these requests in any portion of the briefing on the Motion
to Dismiss. Therefore, the Court will decline to address those requests at this time.

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careful to avoid piece-meal litigation and should consider whether certification would avoid
protracted and expensive litigation and whether the case is an exceptional one in which
immediate appeal is warranted. See White v. Nix, 43 F.3d 374, 376 (8th Cir. 1994).
The Court is of the opinion that this decision presents an “exceptional” case in which
immediate interlocutory appeal should be permitted. Controlling questions of law exist,
specifically, whether the Subscriber Agreement is illusory or whether under Colorado law, in
light of the express terms of Subscriber Agreement, the duty of good faith and fair dealing may
be applied to require DISH to provide subscribers with an automatic monetary credit or other
monetary relief when DISH deletes or changes programming for which subscribers have already
paid. It is also clear that there is substantial ground for a difference of opinion, as illustrated by
the contrast between this Court’s opinion and that of the United States District Court for the
Northern District of Georgia, which interpreted nearly identical terms in a similar lawsuit and
dismissed the lawsuit. See McClamrock v. DISH Network, LLC, 2011 WL 7430006 (N.D. Ga.
2011). Finally, and perhaps most compelling, certification will “materially advance the ultimate
termination of the litigation.” Padberg, which is nearly identical to this case, was filed in 2011
and is still ongoing. Throughout that litigation, the Parties disagreed as to the scope and
applicability of the duty of good faith and fair dealing and as is apparent by DISH’s Motion to
Dismiss in this case, the Parties still disagree as to the scope of that duty. Certification may
prevent years of protracted litigation including class certification and costly notice to millions of
potential class members. Certification in this case may also resolve issues in Padberg. This
matter will therefore be certified for interlocutory appeal pursuant to 28 U.S.C. § 1292(b) on the
following questions:

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Under Colorado law, is the Subscription Agreement between
Stokes and DISH, which is comprised of both a Digital Home
Advantage Plan Agreement and a Residential Customer
Agreement, illusory?; and
Under Colorado law, if the Subscription Agreement between
Stokes and DISH, which is comprised of both a Digital Home
Advantage Plan Agreement and a Residential Customer
Agreement, is not illusory, may, in light of the express terms of the
Subscription Agreement, the duty of good faith and fair dealing be
applied to require DISH to provide subscribers with any monetary
relief when it deletes or changes programming for which
subscribers have already paid?
While the interlocutory appeal is pending before the Eighth Circuit, all proceedings in
this case are stayed. If neither Party files an appeal within ten days of this Order, the stay will be
lifted both in this case and in Padberg. A new scheduling order will be issued in Padberg with
the August 17 trial date remaining the same.
III. Conclusion
For the reasons set forth above, DISH’s Motion to Dismiss is DISH’s Motion to Dismiss
is denied as to Counts I and II and granted with respect to Counts III through VI.

s/ Nanette K. Laughrey
NANETTE K. LAUGHREY
United States District Judge
Dated: July 15, 2015
Jefferson City, Missouri

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