Case: 1:20-cv-00570 Document #: 129 Filed: 07/20/20 Page 1 of 21 PageID #:4520
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`Plaintiff,
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`v.
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`DISH NETWORK L.L.C.,
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`COX MEDIA GROUP, LLC et al.,
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`Defendants.
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`No. 20 C 570
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`Judge Thomas M. Durkin
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`MEMORANDUM OPINION AND ORDER
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`This case involves a contract dispute over the rates DISH Network must pay
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`to retransmit television stations that Defendant Terrier Media Buyer, Inc. purchased
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`from Defendant Cox Media Group. DISH moved for a preliminary injunction so that
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`it may continue to retransmit the stations at issue during this litigation at rates
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`previously agreed upon with Cox. R. 91. For the following reasons, DISH’s motion is
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`denied.
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`Background
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`The Court begins with a brief description of the parties. Plaintiff DISH
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`Network is a satellite multichannel video programming distributor. Defendant Cox
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`Media Group is a media conglomerate that owned the television broadcast stations
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`at issue in this case. R. 84 ¶ 2. Defendant NBI Holdings, LLC (“NBI”), through its
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`subsidiary Northwest Broadcasting, Inc. (“Northwest”), owned a different group of
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`television broadcast stations. Id. ¶ 40. Defendant Apollo Global Management
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`(“Apollo”) is a private equity firm and the parent company of Defendant Terrier Media
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`Buyer, Inc. (“Terrier”). Id. ¶ 46.
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`In March 2019, DISH entered into a three-year contract with Cox that
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`permitted DISH to retransmit 13 Cox television stations in ten major U.S. markets
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`(the “Cox Retransmission Agreement”). Id. ¶ 29. DISH had a separate retransmission
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`agreement with Northwest to retransmit 18 broadcast stations that was set to expire
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`on December 31, 2019 (the “Northwest Retransmission Agreement”). Id. ¶¶ 40, 42.
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`Under
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`the Cox and Northwest Retransmission Agreements, DISH paid
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`retransmission fees based on a predetermined monthly rate per DISH customer
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`receiving each Cox or Northwest station. Id. ¶ 32.
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`On February 14, 2019, Terrier entered into separate agreements to acquire the
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`Cox stations (the “Cox Purchase Agreement”) and the entities owning the Northwest
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`stations (the “Northwest Purchase Agreement”). R. 84 ¶¶ 47, 49. The strategy of these
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`transactions was widely reported: “Apollo would seek to use some of Northwest
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`Broadcasting’s contracts, which have higher fees than Cox’s, to hike up fees from the
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`cable operators[.]” R. 108-31 at 5 (Liana B. Baker, Greg Roumeliotis, Exclusive: Apollo
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`nears $3 billion deal to buy Cox TV stations - sources, REUTERS (Feb. 10, 2019)).
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`Apollo’s internal communications confirm that increasing the retransmission rates
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`was a significant part of its plan. See R. 95 at 10.
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`On March 4, 2019, the parties to the Cox and Northwest Purchase Agreements
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`filed public applications with the FCC seeking consent for the transactions. R. 108-
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`20. The Northwest application describes that “[i]n the first transaction, Terrier Media
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`Buyer, Inc. (“Terrier Media”) will acquire companies owning all of the television
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`stations owned by Northwest Broadcasting. After acquiring those companies, Terrier
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`Media will acquire companies owning all of Cox’s television stations[.]” Id. at 1. The
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`application further states that it “is anticipated that the Northwest Transaction and
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`the Cox Transaction will close in close succession. At the conclusion of the Northwest
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`Transaction and the Cox Transaction, all of the Northwest Stations, Cox Stations,
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`and other assets not regulated by the Commission will be held by subsidiaries of NBI,
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`which will be 100% owned by Terrier Media.” Id. at 2.
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`The transactions were designed to trigger the Cox Retransmission
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`Agreement’s “Station Change in Control” and the Northwest Retransmission
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`Agreement’s
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`“After-Acquired Station” provisions. The Cox Retransmission
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`Agreement provides that a “Station Change in Control” occurs either when 1) an
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`entity gains the ability to control a majority of the board or the voting interests for
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`the Cox stations or to direct the stations’ management; or 2) an entity becomes the
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`FCC-authorized assignee or transferee of the broadcast licenses of the Cox stations.
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`R. 95 at 10; R. 109-2 § 17(b). The impact such a change in control has on the
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`Agreement depends on the identity of the acquiring entity. If the acquiring entity has
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`a preexisting retransmission agreement with DISH, the Cox stations become subject
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`to that agreement, and if not, the Cox Retransmission Agreement continues to
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`control. R. 95 at 9-10; R. 109-2 § 17(b).
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`Meanwhile, the Northwest Retransmission Agreement’s “After-Acquired
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`Station” clause establishes that notwithstanding any preexisting agreement, the
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`Agreement’s terms will govern any “After-Acquired Station.” R. 84 ¶ 45; 109-1 § 17(c).
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`In turn, the Agreement defines “After-Acquired Station” as “a local television
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`broadcast station not listed in Exhibit A as of [June 6, 2018] . . . of which [Northwest
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`Broadcasting] (or a [Northwest Broadcasting] Affiliate) subsequently becomes the
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`owner or licensee. R. 109-1 § 17(c).
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`Thus, Terrier’s plan was first to acquire NBI and assume the Northwest
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`Retransmission Agreement. R. 108-2 ¶ 32(a). Next, Terrier would transfer the
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`ownership of Camelot Media Buyer (one of Terrier’s subsidiaries to which the Cox
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`Purchase Agreement had previously been assigned such that Camelot would directly
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`acquire the Cox stations) to NBI. Id. ¶¶ 9, 32(b). Finally, Camelot would acquire the
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`Cox stations. Id. ¶ 32(c). The relevant corporate ownership chart appears as follows:
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`R. 109 at 10.
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`Defendants contend that the Cox and Northwest transactions closed as
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`planned on December 17, 2019, and thus the Cox stations became After-Acquired
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`Stations governed by the rates set by the Northwest Retransmission Agreement.
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`DISH contends that the Cox transaction closed before the Northwest transaction, and
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`thus Terrier did not have a preexisting retransmission agreement when it acquired
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`Cox, and the Cox Retransmission Agreement’s rates remain in effect.
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` Beginning in December 2019, counsel for NBI informed DISH that the Cox
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`stations were subject to the Northwest Retransmission Agreement. R. 84 ¶ 61. After
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`DISH disagreed, Defendants began to run a crawl message on the Cox stations
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`stating that DISH would lose the stations on January 14, 2020 because “it has refused
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`to agree to reasonable terms for the valuable programming we provide.” Id. ¶ 68.
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`On January 15, 2020, DISH filed this case in the Circuit Court of Cook County
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`and moved for a TRO to prevent Defendants from interfering with its right to
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`retransmit Cox stations, which the state court granted ex parte.1 On January 24,
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`Defendants removed the case to federal court. DISH subsequently filed a motion to
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`remand, which this Court denied. See R. 57. On February 17, DISH moved for leave
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`to add nondiverse defendants to the case, and on February 19 the parties agreed to
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`1 The TRO states that “Defendants are temporarily enjoined from taking any action
`to interfere with performance of the Cox Retransmission Consent Agreement between
`DISH and Cox, dated March 31, 2019, which will remain in full force and effect until
`further order of this Court. Defendants, and those in active concert with them, are
`further enjoined from (i) prohibiting Plaintiff from retransmitting the Cox stations
`listed below, and/or (ii) otherwise interfering with Plaintiff’s right to retransmit those
`stations.” The TRO is available on the docket in the related case also before the Court,
`Terrier Media Buyer Inc. v. DISH Network L.L.C., No. 20 CV 583 (N.D. Ill.), R. 21-2.
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`5
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`extend the TRO indefinitely pending resolution of whether this Court had subject
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`matter jurisdiction. See R. 59.2 The Court denied DISH’s motion to add nondiverse
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`defendants on April 10 and concluded it had subject matter jurisdiction to hear this
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`case. The Court subsequently permitted the parties to undertake limited discovery
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`for purposes of DISH’s preliminary injunction motion. See R. 80; R. 83. That motion
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`was fully briefed as of June 26, 2020.
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`Legal Standard
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`A preliminary injunction is an “extraordinary remedy that may only be
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`awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v.
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`Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008). To prevail on a motion for a
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`preliminary injunction, “the moving party must make an initial showing that (1) it
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`will suffer irreparable harm in the period before final resolution of its claims; (2)
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`traditional legal remedies are inadequate; and (3) the claim has some likelihood of
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`success on the merits.” BBL, Inc. v. City of Angola, 809 F.3d 317, 323-24 (7th Cir.
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`2015) (citing Girl Scouts of Manitou Council, Inc. v. Girl Scouts of U.S. of Am., Inc.,
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`549 F.3d 1079, 1086 (7th Cir. 2008)). “If the moving party makes this showing, the
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`court weighs the factors against one another, assessing whether the balance of harms
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`favors the moving party or whether the harm to other parties or the public is
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`sufficiently weighty that the injunction should be denied.” Id. at 324 (citing ACLU of
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`Ill. v. Alvarez, 679 F.3d 583, 589 (7th Cir. 2012)). “This balancing involves a sliding
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`scale analysis: the greater [the movant’s] chance of success on the merits, the less
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`2 Defendant Cox Media Group took no position on extending the TRO.
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`strong a showing it must make that the balance of harm is in its favor.” Foodcomm
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`Intern. v. Barry, 328 F.3d 300, 303 (7th Cir. 2003) (citing Storck v. Farley Candy Co.,
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`14 F.3d 311, 314 (7th Cir. 1994)).
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`Analysis
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`I. Likelihood of Success on the Merits
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`In determining whether a party has a reasonable likelihood of success on the
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`merits, “the court must find that the petitioner’s chances are ‘better than negligible,’
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`no matter how heavily other equities weigh in her favor.” Kinney for & on Behalf of
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`N.L.R.B. v. Int’l Union of Operating Engineers, Local 150, AFL-CIO, 994 F.2d 1271,
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`1278 (7th Cir. 1993) (quoting Ill. Council on Long Term Care v. Bradley, 957 F.2d
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`305, 307 (7th Cir. 1992)). DISH asserts seven claims, including: a declaratory
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`judgment that the Cox Retransmission Agreement remains valid and enforceable
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`(Count I); specific performance of the Cox Retransmission Agreement (Count II);
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`breach of the Cox Retransmission Agreement against Cox and Camelot (Counts III
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`and IV); breach of duty of good faith and fair dealing against Cox (Count V); tortious
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`interference with the Cox Retransmission Agreement against all Defendants (Count
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`VI); and unfair competition against all Defendants (Count VII).
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`A. Contract Claims (Counts I-IV)
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`Turning first to the contract claims, DISH contends that the “only issue is
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`whether the Cox stations are after-acquired stations subject to the Northwest
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`retransmission agreement.” R. 95 at 15. The Cox Retransmission Agreement is
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`governed by New York law and the Northwest Retransmission Agreement is
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`governed by Colorado law. R. 109-1 at § 18(a) (Northwest); R. 109-2 § 18(a) (Cox). As
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`such, the Court will apply Colorado law to the extent DISH’s contract claims hinge
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`on the Northwest Agreement and New York law to the extent they hinge on the Cox
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`Agreement.
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`The Northwest Retransmission Agreement provides that “[n]otwithstanding
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`any then-existing agreement between DISH and any third party with respect to any
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`After-Acquired Station, an After-Acquired Station will be . . . governed by the terms
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`of this Agreement[.]” R. 109-1 § 17(c). The Agreement defines “After-Acquired
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`Station” as “a local television broadcast station not listed in Exhibit A as of [June 6,
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`2018] . . . of which Broadcaster (or a Broadcaster Affiliate) subsequently becomes the
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`owner or licensee.” Id. In turn, the Broadcaster is Northwest and a Broadcaster
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`“Affiliate” means “any person or entity that directly or indirectly (including through
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`one or more intermediaries) controls, is controlled by or is under common control with
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`[Northwest].” Id. § 1(a).
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`DISH does not dispute that NBI, as Northwest’s parent, is a Broadcaster
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`Affiliate, or that Terrier and the Camelot entities became Broadcaster Affiliates when
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`they acquired NBI. Rather, DISH argues that the Cox Retransmission Agreement
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`should continue to control because Terrier acquired the Cox stations before the
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`Northwest stations and thus did not have a preexisting retransmission agreement.
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`See R. 109-2 § 17(b)(v). Indeed, DISH continues, because the Cox transaction closed
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`first, the Northwest stations became After-Acquired Stations pursuant to the Cox
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`Retransmission Agreement. See id. § 17(d).
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`Section 2.3 of the Northwest Purchase Agreement states that “the closing of
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`the purchase and sale of the Interests . . . shall take place by electronic document
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`transfer (i.e., .pdf signature pages and fully executed documents exchanged via email)
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`immediately prior to . . . the closing of the [Cox] transactions.” R. 108-7 § 2.3.
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`Nevertheless, DISH points out that the email containing the executed documents for
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`the Cox transaction was sent before the email containing the executed documents for
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`the Northwest transaction. See R. 95-10 (Cox email); R. 95-11 (Northwest email). But
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`those emails expressly state that the signature pages “are being sent in escrow
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`pending our express authorization to release.” (emphasis added). Thus, the order in
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`which those emails were sent did not impact which transaction closed first.
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`Meanwhile, Defendants submitted affidavits from Aaron Sobel, a principal at
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`Apollo Global Management, and Brian Brady, a director at Terrier and the former
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`president of NBI, that a closing call occurred at 11:45 a.m. eastern on December 17,
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`2019 during which the parties confirmed that they were ready to close, the money
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`was ready to be wired, and all conditions had been satisfied. R. 108-3 ¶ 32; R. 108-2
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`¶ 34. Sobel and Brady state that they orally released the executed signature pages,
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`first for the Northwest Purchase Agreement and then for Cox Purchase Agreement.
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`R. 108-3 ¶¶ 32, 34; R. 108-2 ¶¶ 34, 37. DISH has offered nothing to suggest that this
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`is not the order in which the signature pages were released. And indeed, it would be
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`astonishing if the Defendants closed the Cox transaction first given that the entire
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`purpose of acquiring the stations depended on the opposite occurring.
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`DISH also argues that the Cox transaction closed first because one of the
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`conditions precedent to the Northwest Purchase Agreement was paying the debt of
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`the Northwest entities, and the Defendants’ flow-of-funds spreadsheet shows that the
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`Cox payments were completed first. See R. 95-9 at 3; R. 108-7 § 2.4.1(b). Specifically,
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`after the Northwest signature pages were released, Terrier initiated the wire transfer
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`of the debt payments. R. 109 at 18 (citing Sobel Dec. ¶ 36; Boyarsky Dec. ¶ 12). But
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`two of those payments had to be re-released 2.5 hours later due to a typo in the
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`routing number. R. 108-4 ¶ 13 (Boyarsky Dec.). In the interim, the Cox payments
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`were completed. Yet in arguing that this means the Cox transaction closed first, DISH
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`changes the terms of the Northwest Purchase Agreement. The agreement does not
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`state that the closing “shall take place” by the full amount of the required payments
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`being deposited in Northwest’s account (as discussed, the closing occurred when the
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`fully executed electronic documents were transferred). Rather, the agreement
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`provides that “[a]t the Closing, the Buyer shall deliver or cause to be delivered . . . [the
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`required payments].” R. 108-7 § 2.4.1 (emphases added). Defendants satisfied their
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`obligation to “cause to be delivered” the required payments by initiating the wire
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`transfer after the signed electronic documents were exchanged. It is irrelevant that
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`Cox ultimately received the money in its account first.
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`In the alternative, DISH contends that the transactions occurred concurrently,
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`and as such, Terrier did not have a preexisting agreement with either Northwest or
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`Cox when the stations were acquired. To support its position, DISH first relies on the
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`second prong of the “Station Change in Control” provision—i.e., when an entity
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`becomes the FCC-authorized assignee or transferee of the broadcast licenses of the
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`Cox stations. DISH contends that Apollo became the FCC-authorized assignee of the
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`Cox and Northwest stations at the same time because the FCC approved the
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`acquisitions of the groups by one decision. But the “Station Change in Control”
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`provision states that it applies when there is “a change in the ownership or license
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`status of [the stations], . . . the result of which is an entity or group of entities . . .
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`becoming the FCC-authorized assignee.” R. 109-2 § 17(b) (emphases added). The FCC
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`decision granted “consent to (1) the transfer of control of certain license subsidiaries
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`of NBI Holdings, LLC to Terrier Media Buyer, LLC; [and] (2) the transfer of control
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`of certain license subsidiaries of Cox Enterprises, Inc. to Terrier Media Buyer, LLC.”
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`R. 108-23 ¶ 45. But the actual change in the ownership or license status of the stations
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`did not occur until the closings on December 17. DISH’s argument thus falls flat.
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`DISH also contends that the Court should treat the acquisitions as a single
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`transaction even if Terrier technically acquired the Northwest stations moments
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`before the Cox stations. In support, DISH cites several cases in which courts
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`“collapsed” a series of transactions. See R. 95 at 18. But the “Station Change in
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`Control” provision expressly provides that it applies “whether pursuant to a single
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`transaction or series of transactions.” R. 109-2 § 17(b) (emphasis added). DISH offers
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`no reason to rewrite the express terms to which it agreed.
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`Finally, DISH argues that the parties never intended for the “Station Change
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`in Control” provision to permit an entity to acquire two sets of stations and then elect
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`the retransmission agreement with more favorable terms. As an initial matter, the
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`11
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`provision unambiguously allows for an acquiring entity to do exactly that. See Keiler
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`v. Harlequin Enters. Ltd., 751 F.3d 64, 69 (2d Cir. 2014) (“New York law is well settled
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`that a written agreement that is complete and unambiguous is to be interpreted
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`without the aid of extrinsic evidence and that industry practice may not be used to
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`vary the terms of such a contract.”). But regardless, DISH was aware that Apollo may
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`acquire the Cox and Northwest stations while it was still negotiating the Cox
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`Retransmission Agreement. Indeed, DISH concluded that should Apollo acquire both
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`entities the “most likely” scenario was that the Cox stations would “go under Apollo’s
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`Northwest [retransmission agreement]” and shorten the Cox stations term from
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`March 31, 2022 to December 31, 2019, the date on which Northwest’s retransmission
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`agreement was set to expire. R. 109-14 at 8. And DISH unsuccessfully attempted to
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`negotiate including language in the Cox Retransmission Agreement that would have
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`allowed for it to remain in effect notwithstanding any After-Acquired Station
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`provision in a different retransmission agreement. See R. 109-15 § 17(b)(iii) (DISH
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`3/25/19 Draft Cox Retransmission Agreement). DISH cannot now credibly claim that
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`it was blindsided by Defendants’ use of the provision.
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`In sum, Defendants submitted two affidavits stating that on a closing call
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`attended by representatives and lawyers for the parties and the multiple banks and
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`financial institutions involved, Terrier closed the Northwest transaction before
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`closing the Cox transaction. By doing so, it appears the transactions triggered the
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`Cox Retransmission Agreement’s “Station Change in Control” provision and the
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`Northwest Retransmission Agreement’s “After-Acquired Station” provision such that
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`12
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`the Northwest Agreement then governed the Cox stations. DISH has offered no
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`persuasive evidence based on the timing of the transactions or otherwise to call that
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`narrative into question. Nor does the Court find persuasive DISH’s arguments that
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`the transactions should be considered to have closed concurrently. It appears that
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`Defendants simply executed their plan as contemplated, and in a way that was
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`permitted under the Cox and Northwest Retransmission Agreements. That DISH
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`was economically disadvantaged by it does not mean Defendants’ actions were in
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`breach of contract. Accordingly, DISH has not demonstrated a reasonable likelihood
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`of success on the merits of its contract claims.
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`B. Breach of Duty of Good Faith and Fair Dealing, Tortious Interference, and Unfair
`Competition Claims (Counts V-VII)
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`The gravamen of DISH’s breach of good faith and fair dealing, tortious
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`interference, and unfair competition claims is that Defendants frustrated DISH’s
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`right to retransmit the Cox stations and then launched a PR campaign to conceal
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`their plan. R. 95 at 19-20. First, to the extent Defendants launched a concealment
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`campaign, those efforts were unsuccessful as DISH was already internally discussing
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`the effect of Apollo’s acquisition of Cox and Northwest prior to signing the Cox
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`Retransmission Agreement. See R. 109-14 at 8.
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`But more importantly, DISH has not adduced evidence in expedited discovery
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`to show that Defendants acted unlawfully. As Defendants point out in their response,
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`under New York law, “to have a cause of action for tortious interference of contract,
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`it is axiomatic that there must be a breach of that contract by the other party.” Aetna
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`Cas. & Sur. Co. v. Aniero Concrete Co., 404 F.3d 566, 589 (2d Cir. 2005) (quoting Jack
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`13
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`L. Inselman & Co., v. FNB Fin. Co., 364 N.E.2d 1119, 1120 (N.Y. 1977)). As previously
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`discussed, DISH has not shown a reasonable likelihood of success on its claim that
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`Cox breached the Retransmission Agreement, and thus its tortious interference claim
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`also seems unlikely to succeed.
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`Relatedly, an implied covenant of good faith and fair dealing “precludes each
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`party from engaging in conduct that will deprive the other party of the benefits of
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`their agreement.” Leberman v. John Blair & Co., 880 F.2d 1555, 1560 (2d Cir. 1989).
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`DISH contends that Cox breached this duty by helping the other Defendants thwart
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`“the purpose of the Cox Retransmission Agreement, which was to establish pricing
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`and other terms by which DISH would be able to retransmit the Cox Stations for the
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`full term of the Agreement.” R. 84 ¶ 114. To begin, DISH’s memorandum cites an
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`email from Northwest to Apollo discussing working together to “crush [Cox’s] soul.”
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`R. 95 at 19. This calls into question the extent to which Cox assisted Northwest and
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`Apollo at all. But regardless, “to simultaneously plead breach of contract and implied
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`covenant claims under New York law, a plaintiff must . . . base its implied covenant
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`theory on allegations that are distinct from the factual predicate for its contract
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`claims.” Great Lakes Reinsurance (UK) SE v. Herzig, 413 F. Supp. 3d 177, 184
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`(S.D.N.Y. 2019) (alteration in original) (quoting JPMorgan Chase Bank, N.A. v. IDW
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`Grp., LLC, 2009 WL 321222, at *5 (S.D.N.Y. Feb. 9, 2009)). Here, DISH’s implied
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`covenant claim is based on the same factual predicate as its breach of contract claims
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`– depriving DISH of its right to retransmit the stations – and thus is unlikely to
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`14
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`succeed. Compare R. 84 ¶¶ 97-104 (breach of contract claim), with id. ¶¶ 111-116
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`(breach of duty of good faith and fair dealing claim).
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`Finally, DISH’s unfair competition claim also appears to have little to no
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`chance of success. The “essence of an unfair competition claim is that the defendant
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`has misappropriated the labors and expenditures of another and has done so in bad
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`faith.” Carson Optical, Inc. v. Prym Consumer USA, Inc., 11 F. Supp. 3d 317, 329
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`(E.D.N.Y 2014) (quoting Coca-Cola N. Am. v. Crawley Juice, Inc., 2011 WL 1882845,
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`at *6 (E.D.N.Y. May 17, 2011)). DISH alleges that “Defendants have engaged in
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`unfair competition by knowingly and intentionally misappropriating [its] rights—
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`specifically by acting to deprive [it] of (i) its retransmission rights with respect to the
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`Cox stations and (ii) its rights under the change-in-control and assignment provisions
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`of the Cox Retransmission Agreement.” R. 84 ¶ 125. But DISH has failed to adduce
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`any evidence that Defendants acted in bad faith.3 The Cox Retransmission
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`Agreement expressly provides for what would transpire if the Cox stations were
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`acquired by an entity with an existing retransmission agreement. The Defendants
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`simply did what that provision allows. That Defendants availed themselves of it in a
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`way not contemplated by DISH (or at least in a way DISH hoped they would not) does
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`not alone establish bad faith. See Michele Pommier Models, Inc. v. Men Women NY
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`Model Mgmt., Inc., 14 F. Supp. 2d 331, 337 (S.D.N.Y. 1998), aff’d, 173 F.3d 845 (2d
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`Cir. 1999) (“a[n unfair competition] claim based only on allegations that a defendant’s
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`3 DISH’s discussion of bad faith in its memorandum is limited to a single conclusory
`sentence: “There is also evidence that Defendants’ misappropriation of DISH’s rights
`under the Cox Agreement was done in bad faith.” R. 95 at 20.
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`
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`action is ‘unfair’ is legally insufficient without a showing of bad faith.”) (quoting
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`Saratoga Vichy Spring Co. Inc. v. Lehman, 625 F.2d 1037, 1044 (2d Cir. 1980)).
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`
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`Accordingly, DISH has failed to demonstrate a reasonable likelihood of success
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`on its breach of good faith and fair dealing, tortious interference, and unfair
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`competition claims.
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`II.
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`Irreparable Harm and Inadequate Legal Remedies
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`
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`DISH’s failure to demonstrate a reasonable likelihood of success on the merits
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`alone is enough to deny its motion. See Adams v. City of Chicago, 135 F.3d 1150, 1154
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`(7th Cir. 1996). But DISH also has not shown it will suffer irreparable harm in the
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`period before final resolution of its claims, or that traditional legal remedies are
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`inadequate.
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`
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`The crux of DISH’s argument is that if the Court does not issue a preliminary
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`injunction, “the Cox stations will go dark,” and this will cause irreparable harm
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`because it will damage its goodwill, cause it to lose subscribers, and diminish its
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`ability to attract new customers. R. 95 at 21. But Defendants cannot prevent DISH
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`from retransmitting the stations. They go dark only if DISH so chooses.4 DISH
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`contends that this presents a “Hobson’s choice” because retransmitting the stations
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`without consent could result in large copyright damages and jeopardize its statutory
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`4 DISH contends in its preliminary injunction motion that Defendants have the
`ability shut off two of the 13 stations because Defendants deliver them to DISH by
`fiber-optic cable. R. 95 at 23; R. 96-16 (Boddie Dec. ¶ 34). Defendants state in their
`response that this is incorrect, and that they have no ability to prevent DISH from
`retransmitting any of the Cox stations. R. 109 at 22-23 (citing Brady Dec. ¶ 49). DISH
`does not appear to contest this in its reply.
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`license to retransmit local broadcast stations. But the Cox Retransmission
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`Agreement grants DISH consent to retransmit the stations through 2022. 109-2 §
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`3(a). DISH thus only faces potential copyright liability if it is wrong that the
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`Agreement remains in effect.5 For purposes of a preliminary injunction, DISH cannot
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`credibly claim both that it has a likelihood of success on the merits (i.e., that the Cox
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`Retransmission Agreement is valid and enforceable) and that copyright damages
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`constitute a “likely” source of irreparable harm. See Whitaker v. Kenosha Unified Sch.
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`Dist. No. 1 Bd. of Educ., 858 F.3d 1034, 1044 (7th Cir. 2017) (“The moving party must
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`demonstrate that he will likely suffer irreparable harm absent obtaining preliminary
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`injunctive relief.”) (emphasis added).
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`
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`Putting that aside, DISH also ignores that it can avoid a blackout by
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`negotiating with Terrier and paying presumably higher retransmission rates during
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`the pendency of this litigation. Simply put, DISH is effectively choosing to black out
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`the stations rather than incurring the extra costs that would be required to reach a
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`new agreement. And when assessing irreparable harm, “self-inflicted wounds are not
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`irreparable injury. Only the injury inflicted by one’s adversary counts[.]” Second City
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`Music, Inc. v. City of Chicago, 333 F.3d 846, 850 (7th Cir. 2003). To be sure, “the
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`question of whether an injury is readily avoidable and truly self-inflicted if not
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`avoided—and thus not irreparable harm—depends on the particular circumstances
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`of the case.” Stuller, Inc. v. Steak N Shake Enterprises, Inc., 695 F.3d 676, 679 (7th
`
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`5 Nor has DISH identified a single instance in which the FCC stripped a party of its
`statutory license in similar circumstances.
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`
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`Cir. 2012). But the well-capitalized DISH does not contend that paying higher rates
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`(either by incurring them itself or passing them to its customers) jeopardizes its
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`corporate viability. See id. (threatening termination of a restaurant’s franchise
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`agreement if it did not adopt a policy that would make it impossible for the restaurant
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`to operate is not a true choice). Nor has DISH introduced evidence that Defendants’
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`demands are extortionate. If DISH believes the rates Defendants are seeking are too
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`high, it can refuse to strike a deal and opt for a blackout.6 That is no different than
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`the choice DISH makes numerous times each year in standard retransmission
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`agreement negotiations with broadcasters. See R. 108-3 (Brady Dec. ¶ 53) (listing the
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`stations DISH has blacked out); R. 108-32 (series of articles discussing recent DISH
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`retransmission fee disputes).
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`
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`Even if a blackout was DISH’s only alternative – i.e., it does not have a true
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`choice in the matter – it has not shown it will suffer irreparable harm. DISH argues
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`that a blackout will cause “many subscribers” to permanently switch to a new
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`provider. R. 95 at 21. To support its claim, DISH cites a 2011 FCC order that discusses
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`the effect of blackouts on DISH’s subscribers in various designated market areas
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`(“DMAs”) from December 1, 2008 to December 1, 2009. The order states that “[d]ue
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`to the loss of a broadcast affiliate signal, DISH lost a statistically significant
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`[REDACTED] of its subscribers in a six month period. Even six months after the
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`programming was restored, DISH subscriber levels in the treatment group DMAs
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`6 Presumably, any difference between the Cox Retransmission Agreement rates and
`new rates the parties agreed to in the interim could later be recovered as damages.
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`remained below the pre-dispute levels.” Applications of Comcast Corp., Memorandum
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`Opinion and Order, 26 FCC Rcd. 4238, Appen