Nexstar and Comcast Battle Over Discovery in WPIX Retrans Case

Nexstar is objecting to orders earlier this month from a Magistrate Judge that it turn over documents related to its local marketing agreement with Mission to operate WPIX (see 2107140059), which Comcast has argued is effectively owned by Nexstar in violation of FCC ownership rules. Previous court rulings have determined that ownership issues are “irrelevant to this lawsuit, and the Magistrate Judge incorrectly permitted discovery into these very topics,” said Nexstar in an objection to the discovery order.

“After months of stonewalling” Nexstar “has been ordered to produce these highly relevant materials. Rather than comply, Nexstar attempts to further delay” said Comcast in a partially redacted memorandum of law in opposition filed Friday. Nexstar expects to file a reply to Comcast by Friday, said a letter from the broadcaster Monday.

The breach of contract suit was originally filed by Nexstar in New York State Supreme Court in New York County in June 2021, after Nexstar sought to apply after-acquired clauses to WPIX’s retransmission consent contracts with Comcast, and the MVPD responded by filing a petition for declaratory ruling with the FCC. The FCC treated the petition as an informal complaint, and doesn’t appear to have acted on it since, but Nexstar responded by filing suit against Comcast. The petition argued that Nexstar’s LMA with WPIX violated the national ownership cap, because WPIX had been part of Tribune when Nexstar bought the company, and divestiture of WPIX was part of the FCC’s Nexstar/Tribune order. The FCC, Comcast, and Nexstar didn’t comment. A similar case over the same matter is also taking place with Charter in the superior court of Delaware.

After the case was removed to federal court, District Judge John Koeltl ruled in May that “the question of whether Nexstar ‘owns’ WPIX, in violation of the ownership cap, has no bearing on whether Comcast has violated the retransmission agreement,” and denied Comcast’s motion to dismiss or stay the case pending action on the petition from the FCC. Comcast then filed counterclaims raising the ownership matters again, arguing that Nexstar and Mission breached retrans agreements with Nexstar “as part of a broader scheme to cement Nexstar’s control over WPIX” to get around FCC rules. When Comcast complained to the court that Nexstar wasn’t providing all the requested discovey, Koeltl sent the matter to a magistrate judge, who ruled that documentation about WPIX’s ownership was relevant, and Nexstar filed an objection earlier this month.

“The Magistrate Judge’s Discovery Order was clearly erroneous or contrary to law, and so should be set aside,” said Nexstar in the objection. Those documents aren’t relevant to the original breach of contract complaint or to Comcast’s “tortious interference” counterclaim, Nexstar said. “Whether Nexstar exercised general ‘control’ over Mission or WPIX has no bearing on whether Nexstar had the specific, malicious intent to interfere with the purported contractual relationship between Mission and Comcast” Nexstar said. Nexstar also has a pending motion to dismiss against the counterclaim, and shouldn’t be required to fulfill burdensome discovery requirements in the meantime, the broadcaster said. The broadcaster could also seek a stay of the discovery, it said.

Nexstar can’t “hide behind” the court’s earlier ruling on ownership rules “to shirk its own discovery obligations,” said Comcast in Friday’s filing. “These are just the sorts of circumstances from which a factfinder could draw an ‘inference’ of intentional and unjustified contractual interference.” Comcast also disputed that the discovery requests are burdensome, arguing that they could total just over 4,000 documents rather than the 150,000 predicted by Nexstar. “It is already clear that the scope of the contemplated review is well within the range of reasonableness for a complex commercial lawsuit between sophisticated parties,” Comcast said.