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Sky Angel U.S., LLC v. Discovery Communications, LLC

Citations: 28 F. Supp. 3d 465; 2014 U.S. Dist. LEXIS 88569; 2014 WL 2964080Docket: Civil Action No. DKC 13-0031

Court: District Court, D. Maryland; June 30, 2014; Federal District Court

Narrative Opinion Summary

The case involves a breach of contract dispute between a video programming distribution service (Plaintiff) and two content providers (Defendants) under Maryland law. The Plaintiff alleges wrongful termination of a non-exclusive licensing agreement, claiming the Defendants did not provide cause or opportunity for remedy as stipulated. The Defendants countered by seeking a jury trial, which the court denied due to their failure to timely request it, as required by the Federal Rules of Civil Procedure. The court evaluated factors such as potential prejudice and the impact on judicial administration. The Plaintiff also objected to a discovery ruling by Magistrate Judge Day, seeking documents withheld under attorney-client privilege. Judge Day's ruling was upheld, emphasizing the protected nature of legal communications. Additionally, the Defendants' motion to seal documents was denied for lacking specific justifications, underscoring the judicial transparency principle. The court's decisions reflect the complex interplay of contract law, procedural rules, and discovery issues, ultimately denying the Defendants' attempts to amend the trial process and access confidential materials.

Legal Issues Addressed

Attorney-Client Privilege and Discovery

Application: The court upheld the privilege protecting certain communications related to the due diligence review, emphasizing the necessity of legal advice for privilege applicability.

Reasoning: Judge Day emphasized that Discovery could terminate the agreement at any time if dissatisfied with the Plaintiff's services, as long as it acted in good faith. He ruled that inquiries into what Discovery knew prior to the agreement were not pertinent to the case's claims and defenses.

Breach of Contract Under Maryland Law

Application: The court addressed whether the termination of the contract by Discovery and Animal Planet was justified under the Agreement's terms, emphasizing the need for a specific determination of distribution methodology dissatisfaction.

Reasoning: Sky Angel filed a breach of contract complaint on January 3, 2013, arguing that the Agreement's Section 12.1 did not allow for termination without cause and mandated a specific determination regarding distribution methodology, which Sky Angel contends was not made.

Implied Covenant of Good Faith and Fair Dealing

Application: The Plaintiff argued that the Defendants violated this covenant by terminating the agreement without cause and failing to provide an opportunity to cure alleged deficiencies.

Reasoning: Sky Angel also contends that the termination breached the implied covenant of good faith and fair dealing by not allowing them an opportunity to address any alleged issues.

Motion to Seal Judicial Documents

Application: The Defendants' motion to seal was denied due to insufficient factual justification under Local Rule 105.11, highlighting the public's right to access judicial documents.

Reasoning: Defendants’ motion to seal documents was denied due to non-compliance with Local Rule 105.11, which mandates that parties seeking to file under seal must provide specific factual justifications and explain why alternatives to sealing are inadequate.

Right to Jury Trial Under Federal Rules of Civil Procedure

Application: The Defendants' motion for a jury trial was denied due to their failure to timely demand it, as required by Rules 38 and 39, with the court considering various factors including potential prejudice and timing.

Reasoning: The right to a jury trial is contingent on timely demand, as outlined in the Federal Rules of Civil Procedure, specifically Rules 38 and 39, which provide that failure to properly demand a jury trial results in waiver of that right, although the court may still allow a jury trial at its discretion.