FRANKLIN, Tenn. (CN) - Spirit Broadband, a small Tennessee cable company, claims DirecTV defamed it, stole its customers, cut off its signals, and falsely advertised that it was going out of business and that Spirit's president had skipped to Mexico with $5 million.
Spirit claims it paid co-defendant Direct Video Networks, an authorized provider of DirecTV, every month for the signals, and says that if any money is missing, Direct Video has it.
Spirit sued DirecTV, Direct Video and People's Choice Cable in Williamson County Court.
Spirit claims it paid DirecTV for 29 channels, but DirecTV cut off all 29 of them in October 2010 and in their place put a written message on subscribers' screens, telling them to call a 1-800 phone number of another affiliate of DirecTV, People's Choice.
"When Spirit's subscribers called the number, it was answered by a DirecTV operator, who told the subscriber a string of false and defamatory statements about Spirit, including that Spirit was not paying its bills and [was] going out of business, that Spirit was not paying its employees, that the president of Spirit, Vincent A. King, had left for Cancun with $5 million, that Spirit had been stealing signals from DirecTV so DirecTV was cutting off the signal, that the subscriber could no longer receive the channels through Spirit, and that the subscriber only could get the programming through DirecTV, among other things," the complaint states.
Trouble arose in May 2010, Spirit says, when DirecTV called it about $28,000 in missed payments. Spirit says it called Direct Video to see what was going on and matters appeared to have been straightened out.
Spirit says that since 2007 it had paid Direct Video $517,556 for DirecTV's signals pursuant to contract.
"On one occasion, DVN principal Tonya Friedman stated that usually they set up these contracts so that DirecTV billed the client directly, but in Spirit's case they had set it up 'as a favor' to have the billing run through DVN," the complaint states.
Spirit says got worse after its signals were cut and the 1-800 number was broadcast.
It claims DirecTV operators called Spirit subscribers to get them to switch providers, employees were sent door-to-door, and a press release was issued to local radio and TV stations and a newspaper accusing Spirit of "illegal conduct and fraud."
The press release accused Spirit of "illegally rebroadcasting certain DirecTV programming," according to the complaint. "Several calls have been received confirming the fraud. The unauthorized retransmission of TV signals is a violation of federal law and DirecTV is weighing its legal options," the press release stated, according to the complaint.
DirecTV also released ads for services and installations "with very aggressive pricing," the complaint adds.
"In the weeks and months that followed, Spirit was forced not only to deal with the horrible public relations hit Spirit suffered due to DirecTV's defamation campaign, but also correct the signals cutoff by DirecTV," the complaint states.
"Spirit lost approximately 483 equivalent billing units during the critical period of October 2010 to March 2011. Each equivalent billing unit had a value of approximately $5,200, causing damages to Spirit of no less than $2,511,600."
Spirit says it had 1,600 subscribers before the allegedly defamatory campaign began.
Spirit claims DirecTV knew about its contracts with Direct Video because an investigator who came out in March 2011 claiming Spirit owed DirecTV $1 million to $3 million for stolen signals acknowledged the contracts, but refused to give Spirit a copy.
During the investigator's visit, "Mr. King suggested that if DirecTV was missing money, it should contact DVN to find out where it went," the complaint states.
Spirit seeks declaratory relief regarding the $1 million to $3 million DirecTV says it owes, and seeks damages and punitive damages for violations of the Consumer Protection Act, defamation, tortious interference, inducement of breach of contract, breach of contract and unjust enrichment.
Spirit is represented by Robert Mendes and C. Daniel Lins with MGLAW of Nashville.
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