Dominion Video Satellite, Inc. v. EchoStar Satellite Corp.

Dominion Video Satellite, Inc. (plaintiff) operated a direct-broadcast satellite system and broadcast the SkyAngel network. EchoStar Satellite Corporation (defendant) also operated a direct-broadcast satellite system and broadcast DISH Network. Dominion and EchoStar entered a contract pursuant to which Dominion leased several transponders on EchoStar’s satellite and then subleased a portion of the transponders back to EchoStar. The agreement effectively limited Dominion’s viewing market to customers who owned or purchased DISH Network-branded satellite equipment. In exchange, the parties agreed that Dominion would have the exclusive right to broadcast Christian programming from EchoStar’s satellite, while EchoStar had the right to broadcast everything other than “predominately Christian programming.” The parties’ contract stated that if either party breached the agreement, money damages would be an insufficient remedy, the harm from the breach would be irreparable, and the nonbreaching party would be entitled to specific performance or an injunction. After EchoStar began broadcasting two predominately Christian channels, Dominion brought an action in federal district court for breach of the contractual-exclusivity provision. Dominion requested a preliminary injunction, arguing that it had suffered irreparable harm because its business was close to failing and EchoStar’s broadcast of the Christian channels threatened the existence of Dominion’s network. The district court rejected Dominion’s arguments, finding that Dominion had not demonstrated that it lost customers, customer goodwill, or market position based on EchoStar’s conduct. The district court also concluded that Dominion’s potential loss of its competitive position in the marketplace could be quantified as damages. However, the court still found that Dominion had suffered irreparable harm based on the loss of Dominion’s contractual-exclusivity rights and the fact that Dominion and EchoStar stipulated in their contract that a breach of the agreement would cause irreparable harm. The court therefore granted Dominion’s requested injunction. EchoStar appealed to the United States Court of Appeals for the Tenth Circuit.