APPEALS COURT OVERTURNS ECHOSTAR INJUNCTION
Lower court injunction blocking Echostar from distributing network TV signals (CD Oct 4/00 p4) was “an abuse of discretion,” 11th U.S. Appeals Court, Miami, said in decision Mon. Ruling vacates preliminary injunction, although networks will have another opportunity to prove case for preliminary injunction and main case is to go ahead.
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EchoStar said ruling showed Appeals Court had determined that federal district court in Miami had made “clear error in judgment” or had not applied correct legal standard in case. “Consumers, rather than government, should decide what channels consumers want to watch,” company said: “EchoStar will work hard to fight the networks’ efforts to shut down consumer rights to receive distant network programming.” Company also said it would pursue “settlement rather than protracted and expensive litigation” with broadcasters in dispute. DirecTV spokesman said “issues” in court fight “had already been addressed. We agreed to turn off signals for individuals who didn’t qualify” using Langley-Rice test: “We've since launched local channels.”
Lower court put burden of proof on wrong party in deciding on preliminary injunction, appeals court said. Although Satellite Home Viewer Improvement Act (SHVIA) puts burden of proof on DBS operator in final case, burden always is on person seeking preliminary injunction before final decision, court said. It said that means broadcasters needed to prove “substantial likelihood of success” in final decision, including proving that substantial number of Echostar subscribers could receive adequate over-air signal.
Lower court rejected networks’ own evidence of violation of over-air reception prohibition, appeals court said, relying only on statement by Echostar witness that about 25% of Echostar subscribers in 5 metropolitan areas could receive adequate over- air signal. Appeals court said there was no evidence in record that 5 areas were representative of nationwide service. Appeals court also rejected district court finding that Echostar’s delay in providing subscriber list was evidence of likelihood of “willful and repeated violations,” saying Echostar delay wasn’t significant compared to networks’ own actions.
“We cannot sustain the drastic remedy of a nationwide preliminary injunction on a record as sparse as this,” appeals court said. It said lower court should rehear injunction bid on remand and networks would have chance to provide additional evidence and Echostar to rebut.
Appeals court did say Echostar’s First Amendment claims were “wholly without merit.” Echostar had said limits on its ability to provide network programming to all subscribers were unfair limit on its free speech, but court said “nothing in SHVIA restricts the content of Echostar’s programming.” Instead, SHVIA creates “narrow exemption” to constitutional Copyright Act that allows it to retransmit programming, and restrictions are “content neutral and serve important governmental interests.”
Four main broadcast TV networks originally sued Echostar in 1998, saying retransmission of network programming to households that could receive off-air signals cost local stations millions of dollars in ad revenue. Echostar had said when injunction was issued that it would have little impact on their business, but broadcasters said it was important.