TV Communications Network, Inc. v. ESPN, Inc., Civ. A. No. 90-F-864.

• Decision Date: 05 April 1991
• Docket Number: Civ. A. No. 90-F-864.
• Citation: TV Communications Network, Inc. v. ESPN, Inc., 767 F.Supp. 1062 (D. Colo. 1991)
• Parties: TV COMMUNICATIONS NETWORK, INC., a/k/a TVCN, Plaintiff, v. ESPN, INC., a Delaware Corporation, Capital Cities/ABC, Inc., d/b/a ABC Television Network, a/k/a ABC, a New York Corporation, Tele-Communications, Inc., a/k/a TCI, a Delaware Corporation, United Artists Entertainment Company, a/k/a UAE, a Delaware Corporation, American Television and Communications Corporation, a/k/a ATC, a Delaware Corporation, Scripps Howard Cable Company and Scripps Howard Communications, an Ohio Corporation, Mile Hi Cable Company, d/b/a Mile Hi Cablevision, a/k/a Mile Hi, a Colorado Corporation, Turner Network Television, Inc., a/k/a TNT, a Georgia Corporation, Defendants.
• Court: U.S. District Court — District of Colorado

767 F. Supp. 1062

TV COMMUNICATIONS NETWORK, INC., a/k/a TVCN, Plaintiff, v.ESPN, INC., a Delaware Corporation, Capital Cities/ABC, Inc., d/b/a ABC Television Network, a/k/a ABC, a New York Corporation, Tele-Communications, Inc., a/k/a TCI, a Delaware Corporation, United Artists Entertainment Company, a/k/a UAE, a Delaware Corporation, American Television and Communications Corporation, a/k/a ATC, a Delaware Corporation, Scripps Howard Cable Company and Scripps Howard Communications, an Ohio Corporation, Mile Hi Cable Company, d/b/a Mile Hi Cablevision, a/k/a Mile Hi, a Colorado Corporation, Turner Network Television, Inc., a/k/a TNT, a Georgia Corporation, Defendants.

Civ. A. No. 90-F-864.

United States District Court, D. Colorado.

April 5, 1991.

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Daniel L. Brotzman, Englewood, Colo., Eric Ross, TCVN, Inc., Denver, Colo., for plaintiff.

Edwin Durso, Gen. Counsel, ESPN, Inc., New York City, for defendantESPN, Inc.

Frederick T. Davis, Jeffrey M. Zimmerman, Patterson, Belknap, Webb & Tyler, New York City, Frederick J. Baumann, Paul J. Zylstra, Rothgerber, Appel, Powers & Johnson, Denver, Colo., for defendantsESPN, Inc. and Capital Cities/ABC, Inc.

Robert E. Youle, Brian G. Eberle, Sherman & Howard, Denver, Colo., for defendantsTele-Communications, Inc. and United Artists Entertainment Co.

William C. McClearn, James Hartley, Holland & Hart, Denver, Colo., Robert D. Joffe, Andrea J. Pollack, Cravath, Swain & Moore, New York City, for defendantsAmerican Television and Communications Corp. and Mile Hi Cable Co.

James A. Clark, Bruce D. Pringle, Marjorie N. Sloan, Baker & Hostetler, Denver, Colo., for defendants Scripps Howard Cable and Scripps Howard Communications.

Miles C. Cortez, Jr., Stephen J. Hensen, Cortez & Friedman, P.C., Denver, Colo., John J. Dalton, P.C., June Ann Kirkland, P.C., Troutman, Sanders, Lockerman & Ashmore, Atlanta, Ga., for defendantTurner Network Television, Inc.

ORDER GRANTING MOTION TO ALTER OR AMEND JUDGMENT, VACATING PRIOR ORDER, AND GRANTING MOTIONS TO DISMISS

SHERMAN G. FINESILVER, Chief Judge.

This matter comes before the court on plaintiff's motion to alter or amend judgment, filed December 31, 1990.Jurisdiction is based upon 28 U.S.C.A. § 1331(West Supp.1990).For the reasons below, the motion to alter or amend judgment is hereby GRANTED.We hereby VACATE our prior order.The outstanding motions to dismiss are hereby GRANTED.

I.PROCEDURAL HISTORY

Plaintiff TV Communications Network ("TVCN") is a supplier of wireless cable television and satellite master antenna television to subscribers in the Denver metropolitan area.¹Defendant ESPN is a programmer involved in the manufacture, production, and wholesale supply of national premium sports programming for nonbroadcast television.Defendant Capital Cities/ABC ("ABC") is a programmer for broadcast television.ABC retains an eighty percent ownership interest in ESPN.Defendant Turner Network Television ("TNT") is a nonbroadcast television programmer involved in manufacturing, producing, and the wholesale supply of various types of programming, with heavy emphasis on national premium sports programming.DefendantsTele-Communications, Inc.("TCI"), United Artists Entertainment ("UAE"), American Television and Communications Corporation("ATC"), Scripps Howard Cable Company and Scripps Howard Communications ("Scripps"), and Mile Hi Cable Company("Mile Hi") are cable operators that distribute nonbroadcast programming to subscribers in the Denver metropolitan area.

On May 16, 1990, plaintiffTV Communications Network, Inc.("TVCN") filed an antitrust action against defendant ESPN.ESPN filed a motion to dismiss on July 2, 1990.On August 17, 1990, plaintiff amended its complaint, adding ABC, TCI, UAE, ATC, Scripps, Mile Hi, and TNT as defendants in the action.²

All defendants filed motions to dismiss on September 28, 1990.After thorough study, analysis of the briefs, and independent research, the court issued an order on December 21, 1990.TV Communications Network, Inc. v. ESPN, Inc.,No. 90-F-864, slip op.(D.Colo. Dec. 21, 1990).Pursuant to Fed.R.Civ.P. 12(b), the court converted the motions to dismiss into motions for summary judgment and granted summary judgment in favor of defendants.Plaintiff filed a motion to alter or amend judgment on December 31, 1990.On January 22, 1991, defendants filed responses.Plaintiff filed a supplemental brief on March 8, 1991.³

Fed.R.Civ.P. 12(b) provides, in pertinent part,

"If, on a motion asserting the defense numbered (6) to dismiss for failure of a pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56."Fed.R.Civ.P. 12(b).

The court did not give the litigants notice of its intention to treat the motions to dismiss as motions for summary judgment.A growing body of law does not require notice if it is clear that summary judgment is warranted.⁴Several Tenth Circuit cases suggest, however, that it is a better policy to notify the litigants of the court's decision to convert motions to dismiss into motions for summary judgment.Nichols v. United States,796 F.2d 361, 364(10th Cir.1986);Ohio v. Peterson, Lowry, Rall, Barber & Ross,585 F.2d 454(10th Cir.1978).We do not care to have the efficacy of our ruling undermined on a potential procedural technicality.Accordingly, we hereby GRANT plaintiff's motion to alter or amend judgment.Our order of December 21, 1990, is hereby VACATED.However, the motions to dismiss filed by all the defendants remain viable.We turn our attention to these pleadings.

II.JURISDICTION

Under federal antitrust laws, only actions that restrain trade or commerce among the several states are forbidden.15 U.S.C.A. § 1 et seq.(West 1973 and Supp. 1990).To establish jurisdiction under these statutes, TVCN must allege a relationship between the activity involved and some aspect of interstate commerce.McLain v. Real Estate Bd., Inc.,444 U.S. 232, 242, 100 S.Ct. 502, 509, 62 L.Ed.2d 441(1980);Crane v. Intermountain Health Care, Inc.,637 F.2d 715, 720(10th Cir.1980);Miami Int'l Realty Co. v. City of Mt. Crested Butte,579 F.Supp. 68, 74(D.Colo.1984).If such allegations are controverted, plaintiff must submit evidence to demonstrate that (i)defendants' activities are themselves in interstate commerce, or (ii) if they are local in nature, defendants' activities have some effect on some other appreciable activity demonstrably in interstate commerce.McLain,444 U.S. at 242, 100 S.Ct. at 509.

In TVCN's amended complaint, it explicitly states that the cable companies in question operate solely in the Denver metropolitan area.(Amended Complaintat ¶¶ 2, 142, 143, and 144).As a result, the programming carried by the cable companies is arguably intrastate in character.SeeNational Ass'n of Regulatory Util. Comm'rs v. Federal Communications Comm'n,533 F.2d 601, 610(D.C.Cir.1976);United States v. Lorain Journal Co.,92 F.Supp. 794, 799(N.D.Ohio1950), aff'd,342 U.S. 143, 72 S.Ct. 181, 96 L.Ed. 162(1951).The programming is transmitted to consumers exclusively within the state of Colorado.That the cable companies receive programming from out of state does not alter its intrastate nature.National Ass'n of Regulatory Util. Comm'rs,533 F.2d at 610.All alleged violations would have occurred within Colorado.SeeThornhill Publishing Co. v. General Tel. & Elecs. Corp.,594 F.2d 730(9th Cir.1979).

At paragraph thirteen of plaintiff's amended complaint, TVCN merely asserts that the defendants' general or overall business affects interstate commerce.Such vague allegations fall short of proving the required critical relationship.Crane,637 F.2d at 724;accordHuelsman v. Civic Center Corp.,873 F.2d 1171, 1174-75(8th Cir.1989).These statements leave the court in an impermissible situation under McLain, forcing us to presume a nexus between the challenged activity and interstate commerce.Crane,637 F.2d at 724.Plaintiff has failed in its obligation to show a nexus between defendants' challenged activities and interstate commerce.Anesthesia Advantage, Inc. v. Metz Group,912 F.2d 397, 400-01(10th Cir.1990);accordMusick v. Burke,913 F.2d 1390, 1397(9th Cir.1990).

Finally, defendants ATC and Mile Hi have challenged jurisdiction on interstate commerce grounds.(Motion to Dismissat 16-17).Plaintiff did not address this argument in its response to the motion to dismiss.Therefore, TVCN has not satisfied its burden of proof under McLain, arguably requiring the dismissal of this action.McLain,444 U.S. at 242, 100 S.Ct. at 509;Parrish v. City of Reno,118 F.R.D. 129, 132(D.Nev.1987).

While the court believes that this action could be dismissed on jurisdictional grounds alone, we are persuaded that, if jurisdiction is appropriate, the motions to dismiss should be granted on substantive grounds.Hence, the substantive legal issues are discussed.

III.MOTIONS TO DISMISS

Under the Federal Rules of Civil Procedure, TVCN is required to offer a short and plain statement of the claims against defendants.⁵This requirement guarantees that defendants enjoy fair notice of what the claims against them are and the grounds upon which they rest.Conley v. Gibson,355 U.S. 41, 47, 78 S.Ct. 99, 102, 2 L.Ed.2d 80(1957).

A cause of action for failure to state a claim under Fed.R.Civ.P. 12(b)(6) should not be dismissed unless the court determines that beyond doubt, plaintiff can prove no set of facts that would entitle it to relief.Tri-Crown, Inc. v. American Fed. Sav. & Loan Ass'n,908 F.2d 578, 582(10th Cir.1990);Golden Rule Ins....