Dominion Video v. Echostar Satellite Corp., No. 03-1274.
| Decision Date | 29 January 2004 |
| Docket Number | No. 03-1303.,No. 03-1274. |
| Citation | 356 F.3d 1256 |
| Parties | DOMINION VIDEO SATELLITE, INC., Plaintiff-Appellee, v. ECHOSTAR SATELLITE CORPORATION and Echosphere Corporation, Defendants. Word of God Fellowship, Incorporated, a Georgia Corporation, doing business as Daystar Television Network, Intervenor-Appellant, and Trinity Christian Center of Santa Ana, Inc., doing business as Trinity Broadcasting Network; Trinity Broadcasting of Arizona; Trinity Broadcasting of Florida, Inc.; Trinity Broadcasting of Indiana, Inc.; Trinity Broadcasting of New York, Inc.; Trinity Broadcasting of Oklahoma City, Inc.; Trinity Broadcasting of Texas; Trinity Broadcasting of Washington; Tri-State Christian TV, Inc.; TCT of Michigan, Inc.; Radiant Life Ministries, Inc.; Faith Broadcasting Network; Familynet, Inc., Amici Curiae. Dominion Video Satellite, Inc., Plaintiff-Appellee, v. Echostar Satellite Corporation and Echosphere Corporation, Defendants-Appellants. Word of God Fellowship, Incorporated, a Georgia Corporation, doing business as Daystar Television Network, Intervenor, and Trinity Christian Center of Santa Ana, Inc., doing business as Trinity Broadcasting Network; Trinity Broadcasting of Arizona; Trinity Broadcasting of Florida, Inc.; Trinity Broadcasting of Indiana, Inc.; Trinity Broadcasting of New York, Inc.; Trinity Broadcasting of Oklahoma City, Inc.; Trinity Broadcasting of Texas; Trinity Broadcasting of Washington; Tri-State Christian TV, Inc.; TCT of Michigan, Inc.; Radiant Life Ministries, Inc.; Faith Broadcasting Network; Familynet, Inc., Amici Curiae. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Donald M. Barnes of Porter, Wright, Morris & Arthur, LLP, Washington, DC, (Salvatore A. Romano and Brian M. Castro of Porter, Wright, Morris & Arthur, LLP, Washington, DC; Thomas E. Downey, Jr., of Downey & Knickerehm, P.C., Denver, CO; and John Lynch, Jr. of Adams Lynch & Loftin P.C., Bedford, TX, with him on the briefs), for Intervenor-Appellant Word of God Fellowship, Incorporated, in No. 03-1274.
Ross W. Wooten of T. Wade Welch & Associates, Houston, TX ( , for Defendants-Appellants EchoStar Satellite Corporation and Echosphere Corporation in No. 03-1303.
Mark D. Colley of Holland & Knight LLP, Washington, DC (Thomas D. Leland of Holland & Knight LLP, Washington, DC; and Allan L. Hale and Scott A. Hyman of Hale Hackstaff Friesen, LLP, Denver, CO, with him on the briefs), for Plaintiff-Appellee, Dominion Video Satellite, Inc., in Nos. 03-1274 and 03-1303.
Colby M. May and James M. Henderson, Sr., filed an amicus curiae brief on behalf of Trinity Christian Center of Santa Ana, Inc., et al.
John T. Schmidt, Conrad M. Shumadine, Gary A. Bryant and Michael R. Katchmark of Willcox & Savage, P.C., filed an amicus curiae brief on behalf of FamilyNet, Inc.
Before SEYMOUR, MURPHY and HARTZ, Circuit Judges.
This appeal arises out of a contract dispute between EchoStar Satellite Corporation and Echosphere Corporation (EchoStar) and Dominion Video Satellite, Inc. (Dominion). Asserting EchoStar was violating its contract, Dominion moved for a preliminary injunction to prevent EchoStar from taking further action and to preserve the status quo while the merits of the case were being decided. In the course of these proceedings, Word of God Fellowship, Inc., d/b/a Daystar Television Network (Daystar), brought a motion to intervene as an interested party under Federal Rule of Civil Procedure 24. The district court denied Daystar's motion, granted Dominion's request for a preliminary injunction, and ordered the parties to begin arbitration proceedings pursuant to their contract. We granted EchoStar's motion to stay temporarily the district court's injunction pending appeal. Both EchoStar and Daystar challenge the district court's rulings on appeal.1 We reverse the district court's entry of a preliminary injunction and deem Daystar's appeal moot.2
EchoStar and Dominion both operate direct broadcast satellite systems (DBS) regulated and licensed by the Federal Communications Commission (FCC). EchoStar's DBS network is broadcast as the DISH Network, and Dominion's network is called SkyAngel. Through the SkyAngel network, which is in part comprised of twenty television channels, Dominion provides predominately Christian programming to its viewers. Conversely, the DISH Network broadcasts an extensive variety of programming which is not limited to any specific genre and offers over 150 channel options to subscribers.
EchoStar has a satellite from which it broadcasts its DISH Network programming. That satellite contains more transponders than EchoStar is permitted to use under its FCC license.3 In order to enlarge its broadcast capabilities from this satellite, EchoStar entered into a contract (the Agreement) with Dominion under which Dominion leased eight transponders from EchoStar's satellite, and then subleased six of those transponders back to EchoStar along with the accompanying FCC license rights Dominion held. EchoStar was thereby able to increase its broadcast scope, and SkyAngel was able to broadcast via the satellite. As a result of this arrangement, SkyAngel subscribers are required to purchase DISH-brand equipment in order to receive Dominion's broadcasting from the EchoStar satellite. Consequently, both EchoStar and Dominion compete for the same customer market: individuals who wish to receive satellite-television programming and who are willing to buy DISH-brand equipment. Recognizing this potential for competition and acknowledging Dominion's interest in providing programming to a specific sub-set of satellite-television viewers — those who wish to watch only Christian-themed broadcasting — the parties included a programming exclusivity clause in the Agreement. Under the terms of the clause, Dominion has the exclusive right to transmit Christian programming from EchoStar's satellite, while EchoStar may broadcast everything except predominantly Christian programming.4
The Agreement also states that should either party breach the agreement, money damages would be insufficient, the harm from the breach would be irreparable, and the non-breaching party would have the right to obtain specific performance or injunctive relief.5 The Agreement stipulated that "[a]t the election of either party, any matter not resolved amicably between the parties to the satisfaction of both parties, shall be subject to mandatory binding arbitration, and the other party shall submit to arbitration." Aple.App., doc. 2 at 59.
Despite the terms of the agreement, EchoStar began broadcasting two predominantly Christian channels on the DISH Network: Daystar and FamilyNet. EchoStar rejected Dominion's assertions that the broadcasts violated the exclusivity clause in the Agreement, contending it was acting in compliance with FCC regulations requiring DBS operators to set aside four percent of their available channel capacity for public interest programming. See 47 U.S.C. § 335(b); 47 C.F.R. § 25.701(c). Dominion disagreed and sued to enjoin EchoStar from broadcasting Daystar and FamilyNet pending arbitration between the parties. In the course of these proceedings, Daystar sought to intervene as an interested party. The district court denied Daystar's motion to intervene, granted Dominion's request for a preliminary injunction, and ordered the parties to submit to arbitration. Both EchoStar and Daystar now appeal.
EchoStar contends the district court erred by granting Dominion's request for a preliminary injunction. "We will not set aside a preliminary injunction `[u]nless the district court abuses its discretion, commits an error of law, or is clearly erroneous in its preliminary factual findings....'" SCFC ILC, Inc. v. Visa USA, Inc., 936 F.2d 1096, 1098 (10th Cir. 1991) (citing Hartford House, Ltd. v. Hallmark Cards, 846 F.2d 1268, 1270 (10th Cir.1988)).
It is well established that in order to obtain a preliminary injunction, the moving party must establish four factors: (1) it will suffer irreparable harm if the injunction is not granted, (2) its threatened injury outweighs the harm caused to the opposing party as a result of the injunction, (3) the injunction is not adverse to the public interest, and (4) it has a substantial likelihood of success on the merits of the case. Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d 1234, 1246 (10th Cir.2001). In examining these factors, courts have consistently noted that "[b]ecause a showing of probable irreparable harm is the single most important prerequisite for the issuance of a preliminary injunction, the moving party must first demonstrate that such injury is likely before the other requirements for the issuance of an injunction will be considered." Reuters Ltd. v. United Press Int'l, Inc., 903 F.2d 904, 907 (2d Cir.1990) (internal quotations omitted); see also Bandag, Inc. v. Jack's Tire & Oil, Inc., 190 F.3d 924, 926 (8th Cir.1999) (per curiam); Shred-It USA, Inc. v. Mobile Data Shred, Inc., 202 F.Supp.2d 228, 233 (S.D.N.Y.2002); Paradise Distribs., Inc. v. Evansville Brewing Co., Inc., 906 F.Supp. 619, 622 (N.D.Okla. 1995). Likewise, because "a preliminary injunction is an extraordinary remedy, the right to relief must be clear and unequivocal." SCFC ILC, Inc., 936 F.2d at 1098 (internal citation omitted).
In granting Dominion's request for a preliminary injunction against EchoStar, the district court found, in part, that Dominion had suffered irreparable harm as a result of EchoStar's alleged breach of the Agreement. The court based its determination on two intertwined grounds. First, it gave great weight to section 12.3.1 of the parties' Agreement, in which EchoStar and Dominion agreed that any violation of their contract would constitute irreparable injury and would therefore...
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