Mostly Media v. U.S. West Communications, 98-2687NE

• Court: U.S. Court of Appeals — Eighth Circuit
• Writing for the Court: RICHARD S. ARNOLD
• Citation: Mostly Media v. U.S. West Communications, 186 F.3d 864 (8th Cir. 1999)
• Decision Date: 21 April 1999
• Docket Number: No. 98-2687NE,98-2687NE
• Parties: (8th Cir. 1999) Mostly Media, Inc., a Nebraska Corporation; Pixel Image Transformatte Inc., a Nebraska Corporation; and Imageware, Inc., a Nebraska Corporation,doing business as Cottonwood Communications, Inc., Appellants, v. U.S. West Communications; U.S. Marketing Resources Group, Inc., On doing business as U.S. West Direct; U.S. West; U.S. West Communications Group, Inc.; Interactive Video .Enterprises, Inc.; U.S. West Interactive Services, Inc.; U.S. West Multimedia Communications, Inc.; U.S. West Multimedia Services Group, Inc.; U.S. West Advanced Technologies, Inc.; U.S. West Business Resources, Inc., Colorado Corporations; U.S. West Enhanced Services, Inc., a Washington Corporation; and U.S. West MultimediaServices of Omaha, Inc., Appellees. Submitted:

Page 864

186 F.3d 864 (8th Cir. 1999)

Mostly Media, Inc., a Nebraska Corporation; Pixel Image Transformatte Inc., a Nebraska Corporation; and Imageware, Inc., a Nebraska Corporation,doing business as Cottonwood Communications, Inc., Appellants, v. U.S. West Communications; U.S. Marketing Resources Group, Inc., On doing business as U.S. West Direct; U.S. West; U.S. West Communications Group, Inc.; Interactive Video .Enterprises, Inc.; U.S. West Interactive Services, Inc.; U.S. West Multimedia Communications, Inc.; U.S. West Multimedia Services Group, Inc.; U.S. West Advanced Technologies, Inc.; U.S. West Business Resources, Inc., Colorado Corporations; U.S. West Enhanced Services, Inc., a Washington Corporation; and U.S. West MultimediaServices of Omaha, Inc., Appellees.

No. 98-2687NE

United States Court of Appeals FOR THE EIGHTH CIRCUIT

Submitted: April 21, 1999

Filed: August 6, 1999

Appeal from the United States District Court for the District of Nebraska

Before RICHARD S. ARNOLD and WOLLMAN,¹ Circuit Judges, and WOLLE,² District Judge.

RICHARD S. ARNOLD, Circuit Judge.

This appeal arises from a lawsuit brought in 1994 against U.S. West and several of its affiliates. The appellants, Mostly Media, Inc., Pixel Transformatte, Inc., and Imageware, Inc., allege that U.S. West violated antitrust laws, discriminated against them in violation of the Federal Communications Act of 1934, and negligently manipulated their telephone lines. The District Court ³ granted U.S. West's motion for summary judgment on the antitrust claims, and the remaining claims were tried to a jury. At the conclusion of the plaintiffs' case, U.S. West moved for judgment as a matter of law, and the District Court granted the motion. We affirm.

I.

We review briefly the events at the center of this dispute. Mostly Media and the other appellant corporations sought to participate in a video dialtone trial conducted by U.S. West in Omaha, Nebraska, in 1995 and 1996. The trial was the result of a decision by the Federal Communications Commission to allow telephone companies to provide interactive television programming to consumers' homes. Mostly Media, a company that produces television programming, alleges that U.S. West excluded it from the trial by refusing to provide technical information and by requiring a $100,000 letter of credit, and that U.S. West discriminated against it in favor of a U.S. West partner. See 47 C.F.R. 64.702 (1998). Mostly Media also claims that U.S. West violated the Sherman Antitrust Act by monopolizing an essential facility. See 15 U.S.C. 2 (1994). Finally, Mostly Media alleges that U.S. West acted negligently in providing its telephone service. Specifically, Mostly Media claims incoming calls rolled over to an unknown destination when its telephone lines were busy or went unanswered, and that this went on for 18 months, causing significant injury to its business.

II.

We have examined carefully the issue of damages in this case, and we conclude, as the District Court did, that Mostly Media cannot prevail because it did not establish sufficient proof of its damages. With respect to the allegations concerning antitrust violations and the video dialtone trial, Mostly Media must have been able to prove, to a reasonable degree of certainty, that its involvement in the trial would have been profitable. Although inferences may be used to establish the precise amount of injury, speculation is not permitted.

Mostly Media presented several theories to prove its injuries. First, Laurie Dahlgren, an owner of one of the plaintiff corporations, testified that Mostly Media. projected revenues of more than $4.4 million in the first year of operating one of three digital channels it had proposed, $2.4 million of which represented profit. Her testimony was supported, in the main, by Dr. Jerome Sherman, an economist who testified on behalf of the plaintiffs, although Dr. Sherman estimated the profit at $1.7 million.

Mostly Media sought to compare itself to RSVP Information, Inc., a company that entered into a joint venture with U.S. West. According to Mostly Media, RSVP participated in the video dialtone trial in a manner substantially similar to the manner in which it would have participated, had U.S. West not acted illegally in excluding it. The plaintiffs introduced a preliminary business plan prepared for RSVP. Dr. Sherman, who reviewed the plan, testified that the estimated value of the joint venture was more than $8.5 million. In addition, Dr. Sherman testified that RSVP realized an immediate benefit of $505,000 from the joint venture. This theory is based upon evidence that U.S. West, which invested more than $252,000 in the joint venture, owned a third of the business, while RSVP, which invested about $35,000, owned two-thirds of the business....