Radio Perry, Inc. v. Cox Commc'ns, Inc.

• Decision Date: 16 July 2013
• Docket Number: No. A13A0399.,A13A0399.
• Citation: 746 S.E.2d 670,323 Ga.App. 604
• Parties: RADIO PERRY, INC. v. COX COMMUNICATIONS, INC.
• Court: Georgia Court of Appeals

323 Ga.App. 604

746 S.E.2d 670

RADIO PERRY, INC.

v.COX COMMUNICATIONS, INC.

No. A13A0399.

Court of Appeals of Georgia.

July 16, 2013.

G. Grant Greenwood, Thomas C. James III, Atlanta, for Appellant.

Thomas MacIver Clyde, Atlanta, Robert R. Gunn II, Macon, for Appellee.

McFADDEN, Judge.

Radio Perry, Inc., the operator of a local commercial television station, WPGA, and cable operator Cox Communications, Inc. are engaged in a dispute about whether and on what terms Cox must carry WPGA's signal on its cable system. This dispute has resulted in proceedings before this court, the Superior Court of Bibb County, the federal district court, and the Federal Communications Commission (FCC). In the instant case, Radio Perry sought a declaratory judgment that a contract between it and Cox had “been cancelled for material and substantive breach on the part of Cox,” that Cox therefore had no basis under the contract to terminate carriage of WPGA, and that Cox must continue to carry WPGA on its system. The trial court granted Cox's motion to dismiss Radio Perry's complaint. It also denied Radio Perry's motion for continuing injunctive relief, finding that it lacked jurisdiction to grant the relief requested.

We find it possible that Radio Perry could introduce evidence within the framework of its complaint entitling it to the declaratory judgment. Accordingly, we reverse the trial court's dismissal of that complaint. We further find that the trial court erred in concluding that it lacked jurisdiction to grant Radio Perry the injunctive relief it sought. Accordingly, we vacate the trial court's denial of the request for a continuing injunction and remand for it to consider whether such relief is appropriate.

1. Motion to dismiss.

We review de novo the trial court's ruling on a motion to dismiss for failure to state a claim under OCGA § 9–11–12(b)(6). See Northway v. Allen, 291 Ga. 227, 229, 728 S.E.2d 624 (2012). The motion

should not be sustained unless (1) the allegations of the complaint disclose with certainty that the claimant would not be entitled to relief under any state of provable facts asserted in support thereof; and (2) the movant establishes that the claimant could not possibly introduce evidence within the framework of the complaint sufficient to warrant a grant of the relief sought. In deciding a motion to dismiss, all pleadings are to be construed most favorably to the party who filed them, and all doubts regarding such pleadings must be resolved in the filing party's favor.

Scouten v. Amerisave Mtg. Corp., 283 Ga. 72, 73(1), 656 S.E.2d 820 (2008) (citations omitted).

In this case, Radio Perry attached exhibits to and incorporated the exhibits into its complaint, and Cox did the same with its motion to dismiss. The trial court was authorized to consider these exhibits in ruling on the motion to dismiss, and we may consider them in our appellate review as well. See Stendahl v. Cobb County, 284 Ga. 525, 526(1) n. 2, 668 S.E.2d 723 (2008); Infinite Energy v. Pardue, 310 Ga.App. 355, 356(1), 713 S.E.2d 456 (2011); Bakhtiarnejad v. Cox Enterprises, 247 Ga.App. 205, 207–208(1), 541 S.E.2d 33 (2000).

(a) Facts and background as alleged in the complaint and shown in the incorporated exhibits.

Radio Perry has broadcast as a television station in the Macon and middle Georgia area since 1995. Cox carries WPGA's signal on its cable system. The Cable Television Consumer Protection Act (the Cable Act) and implementing FCC rules required Radio Perry to elect either “must carry” status or “retransmission consent” status. See 47 U.S.C. §§ 325, 534; 47 C.F.R. § 76.64(f). Generally, “must carry” status requires a cable system to carry a local commercial television station in its entirety, 47 U.S.C. § 534(a), while “retransmission consent” status does not, 47 U.S.C. § 325(b), and local commercial television stations are required to elect their status for three-year cycles. 47 C.F.R. § 76.64(f)(2). Prior to 2008, Radio Perry elected “must carry” status, but it failed to make a status election for the 2009–2011 cycle by the election deadline, October 1, 2008. See 47 C.F.R. § 76.64(f)(2). By default, this failure operated as an election of “ must carry” status for the 2009–2011 cycle. See 47 C.F.R. § 76.64(f)(3).

Radio Perry and Cox then entered into the contract at issue in this case. Radio Perry did so at Cox's request, to ensure that Cox would have the right to broadcast WPGA's digital signal during the interim between the expiration of a previous contract between the parties and the date when, under federal law, WPGA would stop broadcasting an analog signal. Radio Perry explains in its appellate brief that its president mistakenly thought that the contract governed only high definition carriage. Instead, under the terms of the contract, Radio Perry elected “retransmission consent” status for the 2009–2011 and 2012–2014 election cycles. The contract provided that Cox would carry WPGA's digital signal “without interruption or alteration” but it further provided that Cox would not be required to carry the signal if WPGA ceased to be a “Top–4” station (defined as a station primarily affiliated with one of four national television networks).

Radio Perry decided to end its affiliation with a “Top–4” network when that network significantly raised the cost Radio Perry would have to pay for the programming; the termination of this affiliation was effective January 1, 2010. When Cox learned of this, it sent Radio Perry a letter stating that on January 1, 2010, it would stop carrying WPGA on its local cable system. Radio Perry filed an action in the Superior Court of Bibb County for declaratory and injunctive relief, seeking a ruling that Cox was required to carry WPGA's signal notwithstanding its lack of “Top–4” station status under another provision of the contract and that Cox would violate the contract if it ceased carriage. Finding that the contract (which Radio Perry had attached to its complaint) unambiguously allowed Cox to terminate carriage, the superior court dismissed the complaint for failing to state a claim. We affirmed that dismissal without opinion pursuant to Court of Appeals Rule 36. Radio Perry v. Cox Communications, 309 Ga.App. XXII (2011).

Meanwhile, in March 2010, Radio Perry filed a complaint with the FCC alleging that it had “must carry” status by virtue of its failure to make an election by the October 1, 2008 deadline, despite the contrary terms of the subsequent contract. Radio Perry also asked the FCC to make other rulings pertaining to terms of the contract. The FCC, in an order dated July 16, 2010, agreed with Radio Perry that the contract terms could not modify Radio Perry's earlier default election of “must carry” status for the 2009–2011 cycle. The FCC, however, declined to rule on other contract terms, noting that its rules “d[id] not prohibit stations that have elected or defaulted to must-carry from making side agreements with cable operators that can [a]ffect the terms of their carriage.”

On June 15, 2011, Cox sent Radio Perry a letter stating that it would stop carrying WPGA on July 28, 2011. Cox cited the contract and the prior rulings of the FCC, the Bibb County Superior Court, and this court as its grounds for terminating carriage. Viewing this act to violate the “spirit and letter” of the FCC's ruling that it had “must carry” status, Radio Perry brought an action in federal district court to enforce the FCC's ruling and to stop Cox from terminating carriage. Cox subsequently “announced that it would no longer seek to terminate” but would await the outcome of a petition for emergency relief that Radio Perry filed with the FCC on July 27, 2011.

On September 23, 2011, Radio Perry sent Cox's counsel a letter that it now characterizesas a “rescission notice.” Therein, Radio Perry pertinently stated:

This letter is intended as formal notice of termination of the “Retransmission Consent and VOD License Agreement” (the “Contract”) effective January 1, 2009 between Radio Perry, Inc. (“Radio Perry”) and Cox Communications, Inc. (“Cox”). The termination is not based upon any express provision in the contract, but is based upon the fact that Cox has materially and substantially breached the contract based upon the events briefly described below.

The letter described the facts and procedural history set forth above, which Radio Perry characterized as constituting breaches “substantial, material, and fundamental to the contract,” pointing specifically to a provision of the contract that subjected the parties's obligations to “all applicable federal, state and local laws, rules and regulations, including, but not limited to, the [Cable Act] and the FCC Rules.” It then concluded:

[B]ased upon these material and substantial breaches by your client [Cox], Radio Perry takes the position that the contract referred to above is terminated and at an end. See Mayor & City of Douglasville v. Hildebrand, 175 Ga.App. 434 (1985) [physical precedent]. We do not believe that it is necessary to offer to restore the parties to their original position since we are terminating a contract. However, we also reserve our right to damages and these will more than offset any claims of “restoration.” Also, if your client is providing any services to my client under the Contract, they should be billed separately and not set off against any “credit.” We do expect your client to continue carrying WPGA–TV on the cable as a “must carry” local broadcaster.

A few days later, on September 27, 2011, Radio Perry notified Cox that it was electing “must carry” status for the 2012–2014 cycle. Cox responded by letter on October 5, 2011, rejecting Radio Perry's notice of termination and noting that Radio Perry had failed to follow the procedure for termination set forth in the contract.

In a December 5, 2011, opinion, the FCC declined to find that Radio Perry had elected “must carry” status for the 2012–2014 cycle. The FCC ruled...