Free Motion for Order - District Court of Colorado - Colorado

Case 1:03-cv-00607-JLK

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UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-cv-0607-JLK DOMINION VIDEO SATELLITE, INC., Plaintiff, v. ECHOSTAR SATELLITE L.L.C. f/k/a ECHOSTAR SATELLITE CORP., Defendant. ______________________________________________________________________________ MOTION TO CONFIRM SUPPLEMENTAL ARBITRATION AWARD ______________________________________________________________________________ Plaintiff Dominion Video Satellite, Inc. ("Dominion") pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 9 and 13 ("FAA"), hereby petitions this Court to confirm the Final Order and Award On Motion for Supplemental Relief ("Supplemental Award") issued by the American Arbitration Association ("AAA") on April 28, 2004 (Exhibit 1 hereto), and enter the Supplemental Award as a Judgment. As required by the FAA, the entire procedural history of this case and the parties' arbitration is set out below. For the Court's convenience, however, the procedural history is subdivided, with the facts occurring since the last proceeding before this Court contained in the section entitled "Procedural History Since Final Award," beginning on page 5. Procedural History Before Final Award 1. On April 9, 2003, Dominion initiated this action by filing a Complaint against

Defendant EchoStar Satellite L.L.C. f/k/a EchoStar Satellite Corp. ("EchoStar"), along with a

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Motion for Preliminary Injunction. Dominion requested that this Court enjoin EchoStar from broadcasting Daystar and FamilyNet, two predominantly Christian-religious television channels, on EchoStar's Direct Broadcast Satellite ("DBS") service, known as the DISH Network. 2. This Court granted Dominion's motion, but the Tenth Circuit Court of Appeals

reversed, finding that Dominion had failed to prove irreparable harm sufficient to support a preliminary injunction. See Dominion Video Satellite, Inc. v. Echostar Satellite Corp., 356 F.3d 1266 (10th Cir. 2004). 3. On July 29, 2003, Dominion filed a Demand for Arbitration (Exhibit 2 hereto)

against EchoStar in an effort to resolve the disputed matters that had been presented to this Court, as well as other disputes Dominion had with EchoStar concerning the proper interpretation of the July 18, 1996 "Direct Broadcast Service Transponder Lease, Channel Use and Programming Agreement" ("Agreement") between the parties. 4. Section 16 of the Agreement mandates that EchoStar and Dominion arbitrate all

disputes arising out of the Agreement. (See Exhibit 3 hereto.) 5. The first arbitration issue concerned EchoStar's broadcast of Christian channels

on the DISH Network in violation of Section 8.1 of the Agreement, which gives Dominion the exclusive right to broadcast predominantly Christian channels on its DBS service known as Sky Angel. Dominion sought injunctive relief directing that EchoStar immediately cease

broadcasting those channels and a declaration prohibiting EchoStar from broadcasting such channels in the future. Dominion also sought damages from EchoStar for its past wrongful broadcasts.

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6.

The second arbitration issue concerned EchoStar's broadcast of ChristianDominion sought declaratory relief concerning the

religious specials and one-time events.

meaning of Section 8.4(d) and injunctive relief prohibiting EchoStar from broadcasting such programming in the future. 7. The third arbitration issue concerned the meaning of Agreement Section 8.4(a),

which creates an exception to the exclusivity provisions for educational programming. Dominion sought declaratory relief from the arbitration panel establishing that Section 8.4(a) applies only to instructional-academic programming. 8. The fourth arbitration issue concerned EchoStar's refusal to cooperate with

Dominion's efforts to take over provisioning for Sky Angel programming.1 Dominion sought injunctive relief directing that EchoStar facilitate Dominion's control over provisioning. 9. The fifth arbitration issue concerned EchoStar's refusal to provide Dominion with

a comprehensive list of customers who have been activated to receive Sky Angel programming. Dominion sought injunctive relief compelling EchoStar to provide this information. 10. The sixth arbitration issue concerned EchoStar's wrongful broadcast of offensive

programming to Sky Angel subscribers. Purportedly in an effort to market DISH Network, EchoStar broadcasts such programming to Sky Angel customers, although they have not purchased any DISH Network programming. Dominion sought injunctive relief directing that EchoStar cease such broadcasts. 11. In addition to the six arbitration issues, EchoStar challenged Dominion's Dominion, therefore, sought

contractual right to monetary damages under the Agreement.
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Provisioning refers to the activation, deactivation and reactivation of an individual customer's set-top receiver so that it will unscramble and permit viewing of designated broadcasts.

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declaratory relief that the Agreement does not prohibit the parties from seeking monetary damages arising out of a breach. 12. After filing its July 29, 2003 Demand for Arbitration, the AAA assigned Kristine

Lindemann as the case manager and docketed the case as No. 77 181 00326 03. Pursuant to § 16 of the Agreement, both EchoStar and Dominion selected a party arbitrator, and the two party arbitrators selected a neutral arbitrator. 13. Dominion selected Michael L. Beatty, Esq. of The Beatty Law Firm, P.C., 216

16th Street, Suite 1100, Denver, Colorado 80202, to serve as its party arbitrator. (Exhibit 4 hereto.) EchoStar selected Cecil E. Morris, Jr., Esq. of Pendleton, Friedberg, Wilson &

Hennessey, P.C. 303 E. 17th Ave., Suite 1000, Denver Colorado, 80203, to serve as its party arbitrator. (Exhibit 5 hereto.) 14. In a letter from the AAA dated September 17, 2003, the AAA noted that the party

arbitrators had been unable to agree on a neutral arbitrator. (Exhibit 6 hereto.) Accordingly, on September 29, 2003, the AAA appointed Samuel D. Cheris, Esq., Senior Vice President, Secretary, and General Counsel of Relera, Inc., to act as a neutral arbitrator. (Exhibit 7 hereto.) Neither party objected to the appointment of Mr. Cheris. 15. On February 11, 2004, EchoStar moved that Cheris, Beatty, and Morris (the

"Panel") preclude Dominion from presenting evidence of the damage it suffered from EchoStar's breach of the Agreement. (Exhibit 8 hereto.) On February 13, 2004, the Panel bifurcated the hearing, holding that it would address issues of liability and whether Dominion was contractually entitled to damages at an initial hearing, and, if necessary, would hold a supplemental hearing to determine the proper amount of damages. (Exhibit 9 hereto.)

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16.

The Panel conducted the initial arbitration hearing between March 1 and 11, 2004,

in Denver, Colorado. On April 15, 2004, the Panel issued an Interim Award. The Interim Award found in Dominion's favor on certain of the claims, ordered injunctive and declaratory relief in favor of Dominion, ruled that Dominion was contractually entitled to seek damages and set a discovery and hearing schedule and a remedies hearing. 17. On May 20, 2004, Dominion moved the Panel for a partial final order that carved

out certain of the Interim Award's directives to EchoStar and for which an additional remedies hearing was unnecessary. (Exhibit 10 hereto). On July 8, 2004, the Panel granted Dominion's motion, and entered the Partial Final Award. (Exhibit 11 hereto.) 18. On July 12 through 14, 2004, the Panel conducted an evidentiary hearing in

Denver, Colorado on the appropriate remedies for EchoStar's breach of the Agreement. Dominion and EchoStar presented fact and expert testimony relating to the proper remedies, both injunctive and legal, for EchoStar's breach. 19. On July 15, 2004, Dominion moved this Court for an order confirming the Partial

Final Award, which EchoStar opposed. Procedural History Since Final Award 20. On September 10, 2004, the Panel issued the attached Final Award. (Exhibit 12

hereto.) The Final Award found EchoStar in breach of certain provisions of the Agreement, and ordered various injunctive and monetary relief, including an injunction directing EchoStar to immediately cease broadcasting Daystar, FamilyNet and a third Christian-religious station, Educating Everyone and monetary damages for its past broadcast of those stations. In the Final

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Award, the Panel also retained jurisdiction for 90 days "to address matters arising from [the] award or other continuing issues, if any."2 21. Ignoring the directives in the Final Award, EchoStar continued to broadcast

FamilyNet until September 20, 2004 and Daystar until October 21, 2004. Moreover, after October 21, 2004, EchoStar continued to broadcast Daystar into certain geographic markets in violation of the Agreement. 22. On December 3, 2004, Dominion filed a Motion for Supplemental Relief with the

Panel seeking additional damages for EchoStar's continued broadcast of FamilyNet and Daystar after the date of the Final Award, injunctive relief prohibiting EchoStar from broadcasting Daystar into certain geographic markets in violation of the Agreement, and additional relief concerning activations, preview programming and costs. (Exhibit 13 hereto.) 23. After briefing and a telephonic hearing, the Panel issued its Supplemental Award,

granting Dominion additional damages for EchoStar's continued broadcast of FamilyNet and Daystar, and enjoining EchoStar from broadcasting Daystar into certain geographic markets in violation of the Agreement. (See Exhibit 1 hereto.) 24. Section 16.8(e) of the Agreement states that "[t]he award rendered by the

arbitrators shall be binding on the parties, shall be final, and may be entered in accordance with applicable law and in any court having jurisdiction thereof." Argument 25. This Court has jurisdiction to confirm the Supplemental Award under 28 U.S.C.

§ 1332(a)(1), because the Agreement allows for confirmation and, as explained in Dominion's

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On October 22, this Court entered the Partial Final Award and Final Award as a Judgment.

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Complaint, the action involves citizens of different states and the amount in controversy exceeds $75,000, exclusive of interest and costs.3 26. This Court is the proper venue to confirm the Supplemental Award because the

award was made in Denver. The venue provision of the FAA states that the parties may specify the confirming court in their arbitration agreement, but if no court is specified, then "application may be made to the United States Court in and for the District within which such award was made." 9 U.S.C. § 9. 27. With regard to confirmation, the FAA states that, if parties to an arbitration

agreement agree that the judgment of a court shall be entered upon the arbitration award, then the parties may apply to a court for an order confirming the award within one year of the date of the award, and the court "must grant such an order unless the award is vacated, modified or corrected" as permitted under 9 U.S.C. §§ 10 and 11. Id. WHEREFORE, Dominion respectfully requests that this Court grant Dominion's Motion to Confirm Final Arbitration Award and enter the Final Award as a Judgment.

The Supreme Court has explained that the FAA does not create an independent jurisdictional basis for confirmation of arbitration awards by federal district courts. Allied-Bruce Terminix Cos.. v. Dobson, 513 U.S. 265, 291 (U.S. 1995).

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Dated: August 12, 2005 Respectfully submitted, s/Thomas D. Leland Thomas D. Leland, Esq. Allan L. Hale, Esq. Hale Friesen, LLP 1430 Wynkoop Street, Suite 300 Denver, Colorado 80202 Tel.: (720) 904-6000 Email: [email protected] And Mark D. Colley, Esq. Holland & Knight LLP 2099 Pennsylvania Ave., N.W. Suite 100 Washington, DC 20006 Tel.: (202) 955-3000 Email: [email protected] Co-Counsel for Plaintiff Dominion Video Satellite, Inc.

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CERTIFICATE OF COMPLIANCE In accordance with D.C.COLO.L.R. 7.1A, the undersigned contacted Richard Olsen, Esq., counsel for Defendant EchoStar, to ask whether EchoStar would consent to the relief requested by this motion. EchoStar's counsel would not consent, and therefore this motion is necessary.

s/Thomas D. Leland Thomas D. Leland, Esq.

DATED: August 12, 2005

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CERTIFICATE OF SERVICE I certify that on August 12, 2005, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system which will send notification of such filing to the following email addresses: Ross W. Wooten: [email protected] Todd A. Jansen: [email protected]

s/Thomas D. Leland Thomas D. Leland Attorney for Plaintiff Dominion Video Satellite, Inc. HALE FRIESEN LLP 1430 Wynkoop Street, Suite 300 Denver, CO 80202 Telephone: (720) 904-6026 Fax: (720) 904-6006 Email: [email protected]

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