Viamedia, Inc. v. Comcast Corp.

• Decision Date: 16 August 2018
• Docket Number: Case No. 1:16-cv-05486
• Parties: VIAMEDIA, INC., Plaintiff, v. COMCAST CORPORATION and Comcast Spotlight, LP, Defendants.
• Court: U.S. District Court — Northern District of Illinois

335 F.Supp.3d 1036

VIAMEDIA, INC., Plaintiff,

v.COMCAST CORPORATION and Comcast Spotlight, LP, Defendants.

Case No. 1:16-cv-05486

United States District Court, N.D. Illinois, Eastern Division.

Signed August 16, 2018

Mark C. Hansen, Aaron Martin Panner, Pro Hac Vice, Collin R. White, Pro Hac Vice, Derek Tam Ho, Pro Hac Vice, James McCormick Webster, III, Pro Hac Vice, Kenneth Matthew Fetterman, Pro Hac Vice, Lesley Victoria Pope, Pro Hac Vice, Matthew Robert Huppert, Pro Hac Vice, Kellogg, Hansen, Todd, Figel & Frederick, P.L.L.C., Washington, DC, Collin Matthew Bruck, Michael Thomas Layden, Richard J. Prendergast, Richard J. Prendergast, Ltd., Chicago, IL, for Plaintiff.

Arthur Burke, Pro Hac Vice, Christopher Lynch, Pro Hac Vice, David B. Toscano, Pro Hac Vice, Dingding Tina Wang, Pro Hac Vice, Lewis Charles Shioleno, Pro Hac Vice, Olga Kogan, Pro Hac Vice, Davis, Polk & Wardwell, New York, NY, Daniel Thomas Fenske, Ross Benjamin Bricker, Sally Kristen Sears Coder, Thomas Edward Quinn, Jenner & Block LLP, Chicago, IL, for Defendants.

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, United States Circuit Court Judge^*

This antitrust suit was born when a monopolist in one market decided not to do business with a competitor from a related market. The monopolist, Comcast Corporation, denied its competitor, Viamedia, Inc., access (or access on terms Viamedia considered reasonable) to much-needed sales platforms called interconnects. Hurting as it lost revenue and customers turned to Comcast, Viamedia sued under Section 2 of the Sherman Act and various state antitrust laws. See Compl., R. 1; Am. Compl., R. 40.

At the motion-to-dismiss stage, the Court ruled that Comcast had no antitrust duty to deal with Viamedia and thus its refusal to deal was not cognizably anticompetitive under Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP , 540 U.S. 398, 124 S.Ct. 872, 157 L.Ed.2d 823 (2004), and its progeny. Viamedia, Inc. v. Comcast Corp. , 218 F.Supp.3d 674, 698–99 (N.D. Ill. 2016) ; Viamedia, Inc. v. Comcast Corp. , No. 16-CV-5486, 2017 WL 698681, at *3–6 (N.D. Ill. Feb. 22, 2017). Now, at the summary-judgment stage, the question is whether Comcast's conduct can be characterized as something more—tying, exclusive dealing, or another form of anticompetitive conduct. It cannot. Undisputed facts reveal that Viamedia's alternative theories are lacking as a matter of law. Undisputed facts demonstrate that Comcast's refusal to deal with Viamedia—not coercive conduct directed at their mutual customers—is what caused Viamedia's injuries and damages.

Before the Court are Comcast's motion for summary judgment (R. 264), motion to exclude opinions proffered by Viamedia, Inc.'s damages expert, Thomas Lys, Ph.D. (R. 212), and motion to exclude certain opinions proffered by Viamedia's liability expert, Harold Furchtgott-Roth (R. 208). For the reasons explained below, the Court grants Comcast's motion for summary judgment, grants in part Comcast's motion to exclude Dr. Furchtgott-Roth's opinions and denies the remainder as moot, grants Comcast's motion to exclude Dr. Lys's opinions, and enters judgment in Comcast's favor.

BACKGROUND

I. Factual Background

Northern District of Illinois Local Rule 56.1 frames how district courts receive facts at the summary-judgment stage. See Delapaz v. Richardson , 634 F.3d 895, 899 (7th Cir. 2011). Local Rule 56.1(a)(3) requires the movant to provide "a statement of material facts as to which the moving party contends there is no genuine issue and that entitle the moving party to a judgment as a matter of law." L.R. 56.1(a)(3) ; Curtis v. Costco Wholesale Corp. , 807 F.3d 215, 219 (7th Cir. 2015). The nonmovant must then file "a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon." L.R. 56.1(b)(3)(B) ; Petty v. Chicago , 754 F.3d 416, 420 (7th Cir. 2014). The nonmovant may also submit a separate statement of additional facts that require the denial of summary judgment, including references to the affidavits, parts of the record, and other materials relied upon to support those facts. L.R. 56.1(b)(3)(C) ; see also Ciomber v. Coop. Plus, Inc. , 527 F.3d 635, 643–44 (7th Cir. 2008).

The purpose of Local Rule 56.1 statements and responses is to identify the relevant admissible evidence supporting the material facts, not to make factual or legal arguments. Cady v. Sheahan , 467 F.3d 1057, 1060 (7th Cir. 2006) ; see also United States v. 5443 Suffield Terrace, Skokie, Ill. , 607 F.3d 504, 510 (7th Cir. 2010) ("[S]ummary judgment may only be defeated by pointing to admissible evidence in the summary judgment record that creates a genuine issue of material fact, and it was not the district court's job to sift through the record and make [a claimant's] case for him"). Unresponsive, argumentative, evasive, and unsupported denials are improper, e.g. , Morrill v. Nielsen , Phillips v. Quality Terminal Servs., LLC , 855 F.Supp.2d 764, 771 (N.D. Ill. 2012), and district courts may disregard improper denials and deem the opponent's facts admitted, e.g. , Aberman v. Bd. of Educ. of Chi. , 242 F.Supp.3d 672, 677 (N.D. Ill. 2017). See also Boss v. Castro , 816 F.3d 910, 914 (7th Cir. 2016) ("The district court's discretion to require strict compliance with Local Rule 56.1 has been upheld time and again."). Moreover, "[w]hen reviewing a summary judgment motion, courts may only consider admissible evidence." FED. R. CIV. P. 56(c) ; McGreal v. Vill. of Orland Park , 850 F.3d 308, 312-14 (7th Cir. 2017). "To be considered on summary judgment, evidence must be admissible at trial, though ‘the form produced at summary judgment need not be admissible.’ " Cairel v. Alderden , 821 F.3d 823, 830 (7th Cir. 2016) (quoting Wragg v. Village of Thornton , 604 F.3d 464, 466 (7th Cir. 2010) ). With those principles and the Rule 56 standard in mind, the parties' respective Local Rule 56.1 statements and responses describe the following backdrop to this lawsuit.¹

A. The Spot Cable Business and Interconnects

Cable networks, like ESPN or CNN, typically allocate small windows of air time—two to three minutes per hour—to the multichannel video programming distributors ("MVPDs") that show their programming. CSF ¶ 7.² These windows, according to industry parlance, are called "availabilities," "avails," or "spot cable ads." Id. ¶¶ 7, 9. About a quarter of the time, MVPDs retain those avails to advertise their or their affiliates' services. VSF ¶ 5. MVPDs sell the remainder to outside advertisers—and how they choose to do so is the focus of this case. See CSF ¶ 9.

There are many MVPDs nationwide, including Comcast, RCN Corporation, Wide Open West ("WOW!"), Charter Communications, Inc., Atlantic Broadband, and Verizon Communications. MVPDs come in different forms—cable operators, like Comcast or Charter; telecom providers, like Verizon and AT & T; overbuilders, like WOW! and RCN; and satellite providers, like DISH or DirectTV. Id. ¶ 8. Most MVPDs offer their services in one or more metropolitan regions, called designated market areas ("DMAs"). Id. ¶ 5. There are typically four or more MVPDs in a DMA. Comcast Ex. 2, Furchtgott-Roth Report ¶ 17 (R. 273-5).

In any given DMA, there are different ways in which MVPDs sell avails to advertisers. Some MVPDs sell directly through their own sales force. CSF ¶ 10. Others hire advertising-representation firms that specialize in spot cable advertising ("Ad Reps"). Id. ¶ 11. Viamedia is such an Ad Rep, and it has no corporate affiliation with any MVPD. Id. ¶ 13. Viamedia, in fact, is the only independent Ad Rep with significant market presence. VSF ¶ 9.³ Comcast, under the trade name Comcast Spotlight, also does business as an Ad Rep, both on its own behalf and on behalf of other MVPDs.⁴ CSF ¶ 5.

When an MVPD hires an Ad Rep, the two typically enter into an "advertising purchase and sale" agreement. Id. ¶ 11. Under these agreements, an Ad Rep is responsible for managing and selling an MVPDs' avail inventory (or some portion of it) to advertisers. Id. ¶¶ 11–12; VSF ¶ 1. Ad Reps can represent their MVPD customers: (1) locally, selling only a part of an MVPD's avails in a DMA to local advertisers; (2) regionally, selling all of the MVPD's avails in a DMA; or (3) nationally. Furchtgott-Roth Report ¶ 21. In any event, Ad Reps' sales responsibilities entail ancillary responsibilities, too, including: marketing and pricing the avails; maintaining the software and hardware needed to run, insert, traffic, monitor and advertise spot cable ads; organizing inventory into schedules and ensuring each ad runs correctly during those schedules; and performing financial services, like accounting, billing, and collection. VSF ¶ 1. Ad Reps are also responsible for working with interconnects to sell avails. Id. These services make up "Ad Rep Services," according to Viamedia. Id. ; see also Furchtgott-Roth Report ¶¶ 22–29.

An interconnect is a "one stop shop" where advertisers can purchase spot cable ads on a DMA-wide basis. CSF ¶ 16. Developed by MVPDs in the 1990s, interconnects solve a market inefficiency. Before interconnects, an advertiser wanting to reach television audiences with commercials running at the same time on the same channel across the DMA had to either rely on over-the-air broadcast stations exclusively or negotiate separately with each MVPD. CSF ¶¶ 14–15, Resp. to ¶ 14. An interconnect—of which there is one per DMA—fixes that problem by pooling together avails among the DMAs' MVPDs, scheduling allocations, selling and coordinating the sale of those avails, and billing the parties. Id. ¶ 17, Resp. to ¶ 17. These collective services make up "Interconnect Services," according to Viamedia. Id. ; see also Furchtgott-Roth Report ¶¶ 30–42.

Over the last decade or so, the largest MVPD in a DMA has come to operate that DMA's interconnect. Id. ¶ 18; see also Am....