No Discovery for Changes in Suit Against C-SPAN

WASHINGTON (CN) - C-SPAN need not face discovery for the amended complaint a Christian-owned subscription television service operator hopes to file against it, a federal judge ruled.

Sky Angel had first sued National Cable Satellite Corp. dba C-SPAN in November 2012. It accused the station of trying to monopolize the market for real-time, multichannel video programming distribution services.

Sky Angel operates FAVE-TV, a subscription service that distributes "faith-based" and "family-oriented" video programming. Though C-SPAN agreed to let Sky Angel broadcast its legislative programming in 2009, C-SPAN shut off the feed just three days in.

Claiming that C-SPAN never revealed why it terminated the deal, Sky Angel sought a 10-year programming license with the nonprofit, alleging that it had been harmed by a group boycott in violation of the Sherman Antitrust Act.

C-SPAN explained to the Washington, D.C., court that it had agreed to let Sky Angel carry its networks on a protected Internet-protocol-based stream but found that Sky Angel's distribution technology would breach that deal since it includes public Internet.

U.S. District Judge Rudolph Contreras dismissed the suit last month for failure to state a claim. He said Sky Angel's group boycott claim failed because the Florida-based company did not plead the requisite "concerted activity," as required by Section 1 of the Sherman Act

The court likewise nixed Sky Angel's claim that C-SPAN maintains a monopoly in violation of Section 2 of the Sherman Act.

Contreras agreed with C-SPAN that the complaint must prove it has monopoly power.

In a silver lining for the case, Contreras found it plausible that the lack of C-SPAN programming hurt Sky Angel's profits and reputation, among other injuries.

He gave Sky Angel leave to address these deficiencies with an amended complaint, but Sky Angel in turn asked the court for limited discovery relating to the identity and conduct of certain corporate actors.

Contreras shot this demand down Wednesday.

"In requesting discovery related to the means by which C-SPAN's decided to terminate the IPTV [affiliation] agreement, Sky Angel tacitly recognizes that its original complaint was dismissed for more than mere failure to identify individual actors," he wrote. "By failing to plead multiple actors, Sky Angel necessarily failed to plead the conduct between the actors - that is, the requisite 'contract, combination, or conspiracy' that satisfies the Sherman Act's 'concerted activity' requirement. And although Sky Angel appears certain that C-SPAN's sudden termination of the IPTV agreement could only have come about as a result of foul play, the court notes the speculative nature of that assertion and declines to depart from the normal order of discovery in order to indulge Sky Angel's theory at this stage."

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