New York district court dismisses Dish Network’s declaratory judgment action against several television networks to the extent that it pertains to copyright and contract claims brought by the television networks in a later-filed action in California, finding that, although the New York action was first filed, it was improperly brought in anticipation of the networks’ suit.
Dish Network, LLC (Dish) brought suit against defendants American Broadcasting Companies, Inc., CBS Corp., NBCUniversal Media, Fox Entertainment Group, Inc., Fox television Holdings, Inc., and Fox Cable Network Services, LLC (the networks) seeking declaratory judgment that its new digital video recording service with “PrimeTime Anytime” (PTAT) and “Auto Hop” features did not infringe the networks copyrights or breach Dish’s license agreements with the networks. PTAT allows viewers to record all HD primetime TV programming on the ABC, CBS, Fox, and NBC networks simultaneously and view the shows for up to eight days after they have aired. Auto Hop allows the viewer to skip all commercials during prime time recordings with the touch of a button.
In an article published May 23, 2012, Hollywood Reporter indicated that many of the networks were reviewing their Dish license agreements and consulting with various law firms in anticipation of litigation against Dish. The next day, Dish filed this action for declaratory judgment in the Southern District of New York. Three hours later, several of the networks (although not ABC), brought their copyright infringement action in the Central District of California.
Dish moved for an anti-suit injunction to enjoin the networks from prosecuting their action in California, and the Fox Networks moved to dismiss Dish’s declaratory judgment action as an improper anticipatory suit. CBS and NBCUniversal similarly moved to dismiss, transfer, or stay Dish’s declaratory judgment suit in light of their action in California.
The court granted the networks’ motion to dismiss Dish’s lawsuit as an improper anticipatory suit, rejecting Dish’s argument that its lawsuit was entitled to priority under the “first-filed According to court, the first-filed rule does not apply where the “balance of convenience” favors the later-filed action and “special circumstances” militate in favor of the later action, including cases in which the first action is a declaratory judgment action brought in anticipation of a coercive suit for the purpose of gaining “home field advantage,” where the coercive suit will resolve the issues. The court found that the declaratory judgment action was improperly anticipatory because Dish filed the suit in response to a specific and direct threat of impending litigation, and was improperly anticipatory. The court noted that the Dish complaint was only 13 pages long, failed to identify the relevant copyrights, and did not raise the contractual provisions at issue. In addition, although it was not a party-to-party communication threatening litigation, the Hollywood Reporter article was sufficiently direct in that it indicated that a lawsuit would be filed within a month and identified the networks’ specific claims. Accordingly, the court dismissed those portions of Dish’s complaint pertaining to copyright claims and contract claims raised in the California action, with prejudice, while retaining all copyright and contract claims not raised in the California action.