Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 1 of 9 PageID #:645
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
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`
`TERRIER MEDIA BUYER, INC., d/b/a COX
`MEDIA GROUP
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`Plaintiff,
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`
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`DISH NETWORK, L.L.C.,
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`
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`
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`Defendant.
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`v.
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`
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`No. 20 C 583
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`Judge Thomas M. Durkin
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`
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`MEMORANDUM OPINION AND ORDER
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`Terrier Media Buyer, Inc. sued DISH Network for copyright infringement.
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`DISH moved to dismiss. R. 36. DISH’s motion is granted.
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`Legal Standard
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`
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`A Rule 12(b)(6) motion challenges the “sufficiency of the complaint.” Berger v.
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`Nat. Collegiate Athletic Assoc., 843 F.3d 285, 289 (7th Cir. 2016). A complaint must
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`provide “a short and plain statement of the claim showing that the pleader is entitled
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`to relief,” Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with “fair notice” of
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`the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
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`This standard “demands more than an unadorned, the-defendant-unlawfully-
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`harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed
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`factual allegations” are not required, “labels and conclusions, and a formulaic
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`recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
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`The complaint must “contain sufficient factual matter, accepted as true, to ‘state a
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`claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly,
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`
`
`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`
`TERRIER MEDIA BUYER, INC., d/b/a COX
`MEDIA GROUP
`
`
`Plaintiff,
`
`
`
`DISH NETWORK, L.L.C.,
`
`
`
`
`
`Defendant.
`
`v.
`
`
`
`
`
`
`
`No. 20 C 583
`
`Judge Thomas M. Durkin
`
`
`
`
`
`
`
`
`MEMORANDUM OPINION AND ORDER
`
`Terrier Media Buyer, Inc. sued DISH Network for copyright infringement.
`
`DISH moved to dismiss. R. 36. DISH’s motion is granted.
`
`Legal Standard
`
`
`
`A Rule 12(b)(6) motion challenges the “sufficiency of the complaint.” Berger v.
`
`Nat. Collegiate Athletic Assoc., 843 F.3d 285, 289 (7th Cir. 2016). A complaint must
`
`provide “a short and plain statement of the claim showing that the pleader is entitled
`
`to relief,” Fed. R. Civ. P. 8(a)(2), sufficient to provide defendant with “fair notice” of
`
`the claim and the basis for it. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
`
`This standard “demands more than an unadorned, the-defendant-unlawfully-
`
`harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). While “detailed
`
`factual allegations” are not required, “labels and conclusions, and a formulaic
`
`recitation of the elements of a cause of action will not do.” Twombly, 550 U.S. at 555.
`
`The complaint must “contain sufficient factual matter, accepted as true, to ‘state a
`
`claim to relief that is plausible on its face.’” Iqbal, 556 U.S. at 678 (quoting Twombly,
`
`
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 2 of 9 PageID #:646
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`550 U.S. at 570). “‘A claim has facial plausibility when the plaintiff pleads factual
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`content that allows the court to draw the reasonable inference that the defendant is
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`liable for the misconduct alleged.’” Boucher v. Fin. Sys. of Green Bay, Inc., 880 F.3d
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`362, 366 (7th Cir. 2018) (quoting Iqbal, 556 U.S. at 678). In applying this standard,
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`the Court accepts all well-pleaded facts as true and draws all reasonable inferences
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`in favor of the non-moving party. Tobey v. Chibucos, 890 F.3d 634, 646 (7th Cir. 2018).
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`Background
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`In June 2018, DISH Network and Northwest Broadcasting, Inc. entered into
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`
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`an agreement that permitted DISH to retransmit various local television stations to
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`its subscribers (the “Northwest Retransmission Agreement”). R. 35 ¶ 19. The
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`Northwest Retransmission Agreement included an “After-Acquired Stations”
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`provision. Id. ¶ 20. That provision provides that any broadcast station acquired by
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`Northwest or its affiliates would be governed by the Northwest Retransmission
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`Agreement notwithstanding any other retransmission agreement the station had
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`with DISH. Id.
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`
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`On December 17, 2019, Terrier Media Buyer acquired Northwest’s parent
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`company NBI Holdings, and NBI subsequently acquired 13 local television stations
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`from Cox Enterprises (the “Cox stations”). Id. ¶¶ 21-22.1 The Cox stations had
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`previously been governed by a separate retransmission agreement with DISH (the
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`“Cox Retransmission Agreement”). Id. ¶ 24. The Cox Retransmission Agreement
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`1 The order in which these acquisitions closed is the subject of much dispute in the
`related case pending before this Court, DISH Network L.L.C. v. Cox Media Group,
`LLC et al., 20-cv-570 (N.D. Ill.). For purposes of this motion, the Court accepts the
`version of events detailed in Terrier’s complaint.
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`
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`2
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 3 of 9 PageID #:647
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`included a “Station Change in Control” provision that provided for the termination of
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`the Agreement if the Cox stations became governed by a different retransmission
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`agreement. Id. Under that provision and the Northwest Retransmission Agreement’s
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`After-Acquired Stations provision, the Cox stations became subject to the Northwest
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`Retransmission Agreement and the Cox Retransmission Agreement terminated. Id.
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`¶¶ 23-25.
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`
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`The Northwest Retransmission Agreement was to expire on December 31,
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`2019. Id. ¶ 26. After several extensions during the parties’ negotiations regarding the
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`rates DISH would have to pay in a new retransmission agreement, the Northwest
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`Retransmission agreement expired at 7:00 p.m. on January 18, 2020. Id. As of that
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`time, Terrier withheld its consent for DISH to retransmit the Cox stations. Id.
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`
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`On January 15, 2020, DISH obtained a temporary restraining order ex parte
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`in Illinois state court that enjoined Terrier from prohibiting DISH from
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`retransmitting the Cox stations. Id. ¶ 27. After hearing argument from the parties
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`several days later, the state court entered an order on January 24 extending the TRO
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`against Terrier. Id. ¶ 28.2 On the same day that order was issued, Terrier filed this
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`copyright infringement lawsuit. Id. ¶ 30. Terrier also sent a letter to DISH stating
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`that any retransmission of the Cox stations after the January 18 expiration of the
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`Northwest Retransmission Agreement is a knowing and willful infringement of the
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`copyrights of that television programming. Id. ¶ 32. DISH continued to retransmit
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`2 Also on January 24, Terrier removed the case to federal court. At a status hearing
`on February 20, the parties agreed to extend the TRO. See 20-cv-570, R. 60. This
`Court subsequently denied DISH’s motion for a preliminary injunction and dissolved
`the TRO. See R. 129.
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`
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`3
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 4 of 9 PageID #:648
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`the Cox stations after the expiration of the Northwest Retransmission Agreement.
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`Id. ¶¶ 31, 34. DISH moved to dismiss Terrier’s copyright infringement claim.
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`Analysis
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`To state a claim for copyright infringement, Terrier must allege two elements:
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`
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`“(1) ownership of a valid copyright, and (2) copying of constituent elements of the
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`work that are original.” Muhammad-Ali v. Final Call, Inc., 832 F.3d 755, 760 (7th
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`Cir. 2016) (quoting Peters v. West, 692 F.3d 629, 632 (7th Cir. 2012)). DISH does not
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`contend that Terrier has failed to adequately allege those elements. Rather, DISH
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`argues that it has a valid license to retransmit Terrier’s copyrighted works. The
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`existence of a license is an affirmative defense to a claim of copyright infringement.
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`Id. at 761 (quoting I.A.E., Inc. v. Shaver, 74 F.3d 768, 775 (7th Cir. 1996)). Generally,
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`“[c]omplaints need not anticipate or plead around affirmative defenses.” Leavell v.
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`Kieffer, 189 F.3d 492, 494 (7th Cir. 1999) (citing Gomez v. Toledo, 446 U.S. 635, 640
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`(1980)). However, a motion to dismiss based on an affirmative defense may be granted
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`when “the allegations of the complaint itself set forth everything necessary to satisfy
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`the affirmative defense[.]” United States v. Lewis, 411 F.3d 838, 842 (7th Cir. 2005).
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`The sole issue here is whether DISH had consent to retransmit the Cox
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`stations. Section 122 of the Copyright Act establishes a statutory license for satellite
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`carriers to retransmit copyrighted programming embedded in a television broadcast
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`station’s signal into the station’s local market. 17 U.S.C. § 122(a)(1). However, the
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`license is conditioned upon satellite carriers’ compliance “with the rules, regulations,
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`or authorizations of the Federal Communications Commission governing the carriage
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`4
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 5 of 9 PageID #:649
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`of television broadcast station signals.” Id. § 122(a)(1)(B). FCC rules prohibit
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`multichannel video programming distributors
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`(“MVPDs”)
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`like DISH
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`from
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`retransmitting a station’s signal without the broadcaster’s consent. See 47 C.F.R. §
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`76.64; 47 U.S.C. § 325(b). If a satellite carrier retransmits local broadcast signals
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`without consent in violation of the FCC’s rules and regulations, it cannot avail itself
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`of the statutory license and is liable for copyright infringement. 17 U.S.C. 122(d).
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`DISH argues that it is clear from the face of the TRO, which Terrier references
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`in the complaint, that it had consent to retransmit the Cox stations. R. 21-2 ¶ 2.3 The
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`Court finds this argument persuasive. The complaint alleges that Terrier began
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`withholding its consent to retransmit the Cox stations on January 18, 2020. But the
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`TRO, which was entered January 15, states that the Cox Retransmission Agreement
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`remains “in full force and effect until further order of this Court.” Id. Because the Cox
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`Retransmission Agreement gave DISH consent to retransmit the Cox stations, see R.
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`35 ¶ 24, and the TRO expressly kept that agreement in full force and effect, DISH
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`had consent to retransmit the stations during the period in which Terrier alleges
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`copyright infringement.
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`Terrier argues that the TRO was not intended to prevent it from seeking
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`copyright damages. To support its position, Terrier points to paragraph 5 of the TRO,
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`which states that: “[t]his Order does not prevent any Defendant [including Terrier]
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`3 The Court may consider the TRO and the TRO hearing transcript without
`converting DISH’s motion to dismiss into a motion for summary judgment both
`because they are matters of public record and because they are critical to the
`complaint and referred to in it. See Geinosky v. City of Chicago, 675 F.3d 743, 746 n.1
`(7th Cir. 2012).
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`
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`5
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 6 of 9 PageID #:650
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`from asserting a right to monetary relief for copyright infringement or Plaintiff from
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`asserting any defenses thereto.” R. 21-2 ¶ 5. This language makes clear that the TRO
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`does not enjoin Terrier from filing a lawsuit. See also R. 21-9 at 68:9-12 (“I’m not
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`trying to prevent the defendants from having access to the federal courts or to this
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`court in the [copyright] counterclaim.”); id. at 34:21-35:5 (Q: “I don’t think, Judge,
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`that you intended in your TRO to say to the defendants, ‘You don’t have a right to go
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`to federal court and say, copyright damages.’ I don’t think you intended that --” A:
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`“You can be assured I didn’t say that, and I would never -- I don’t think it’s enforceable
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`to begin with, and I would never suggest that. You can do what you want.”). But nor
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`does the TRO prevent DISH “from asserting any defenses thereto,” including that it
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`had consent to retransmit the stations because the TRO kept the Cox Retransmission
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`Agreement in full force and effect.
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`Terrier contends that it would be nonsensical for the TRO to permit it to file a
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`lawsuit but prevent it from arguing DISH lacked consent to retransmit. But the TRO
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`does not prevent Terrier from making that argument any more than it guarantees it
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`will be successful. Indeed, while Terrier would have the Court interpret the TRO as
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`permitting it to recover copyright damages during the TRO’s pendency, the TRO
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`expressly states that “[t]he court takes no position as to the effect of this Temporary
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`Restraining Order in any such copyright infringement lawsuit, including one
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`asserting any claim for damages based on a finding of infringement during the period
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`of the Temporary Restraining Order.” R. 21-2 ¶ 5 (emphasis added).
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`6
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 7 of 9 PageID #:651
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`Importantly, in granting the TRO, the state court wanted to prevent DISH
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`from having to choose between stopping its retransmission of the Cox stations or
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`facing potentially ruinous copyright damages. The court explained that DISH “could
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`lose the ability to retransmit any broadcasting station signal anywhere due to an
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`alleged and feared copyright infringement . . . they’d be out of their minds to try and
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`[retransmit the stations] and risk that kind of a damage because . . . they could lose
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`up to $250 million plus another $35 million every six months in damages. Damages
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`for copyright infringement, therefore, could be draconian and affect DISH’s ability to
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`compete in the marketplace, if at all.” R. 21-9 at 60:18-61:9. If the TRO permitted
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`Terrier to collect copyright damages during its pendency, it would render
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`meaningless the court’s reason for granting it.
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`Terrier contends that if the TRO prevents it from recovering copyright
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`damages during its pendency, it would impermissibly “override” its copyright rights
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`and “exempt DISH from [its] obligations under federal law.” R. 41 at 16. But if DISH
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`is correct that the Cox Retransmission Agreement remains valid and enforceable (as
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`reflected in the TRO keeping that agreement in full force and effect), then DISH is
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`complying with its obligation to get consent to retransmit the stations (and paying
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`Terrier for that right). R. 21-7 at 18:21-24; R. 21-9 at 13:7-9. Rather, Terrier’s actual
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`argument appears to be that its copyright rights would be violated if it cannot pursue
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`damages and the TRO was entered erroneously – that is, the Cox Retransmission
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`Agreement terminated and so DISH did not have consent to retransmit the Cox
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`stations during the period the TRO was in effect. But an erroneously entered TRO
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`7
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 8 of 9 PageID #:652
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`does not give rise to a separate cause of action for conduct that the TRO permits. See
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`In re UAL Corp., 412 F.3d 775, 779 (7th Cir. 2005) (“A person injured by the issuance
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`of an injunction later determined to be erroneous has no action for damages absent a
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`bond.”) (quoting W.R. Grace & Co v. Rubber Workers, 461 U.S. 757, 770 n.14 (1983));
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`see also Coyne-Delaney Co., Inc. v. Capital Dev. Bd. of State of Ill., 717 F.2d 385, 393-
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`94 (7th Cir. 1983).4 This is for good reason; to permit a party to be sued for relying on
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`a court order would be a grave miscarriage of justice. In sum, because the TRO
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`ordered that the Cox Retransmission Agreement remained in full force and effect,
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`DISH had consent to retransmit the Cox stations during the its pendency. And
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`because Terrier bases its copyright claim on DISH not having had consent to
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`retransmit the stations during that period, its claim fails.
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` Conclusion
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` For the reasons stated, DISH’s motion to dismiss [36] is granted.
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`Nevertheless, it is unclear from the record whether DISH continued to retransmit the
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`Cox stations after this Court dissolved the TRO. For this reason, Terrier’s claim is
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`dismissed without prejudice. If Terrier believes it has a claim for copyright damages
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`outside of the period of the TRO, it may move for leave to file an amended complaint
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`by October 5, 2020. The motion should attach a redlined comparison between the
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`current complaint and the proposed amended complaint, and should be supported by
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`4 The state court did not require DISH to post a bond, see R. 21-9 at 68:16-18, and
`Terrier did not raise the issue when that case was removed to federal court. This is
`perhaps in part because DISH represents that it has continued to pay Terrier (and
`its affiliates) the monthly retransmission fees required under the Cox Retransmission
`Agreement while the TRO remained in effect.
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`8
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`Case: 1:20-cv-00583 Document #: 45 Filed: 09/14/20 Page 9 of 9 PageID #:653
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`a brief of no more than five pages describing how the proposed amended complaint
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`cures the deficiencies identified here. If no motion is filed by October 5, 2020, the case
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`will be dismissed with prejudice.
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`Dated: September 14, 2020
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`ENTERED:
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`______________________________
`Honorable Thomas M. Durkin
`United States District Judge
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`9
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