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FILED: NEW YORK COUNTY CLERK 05/29/2015 08:43 AM INDEX NO. 652471/2014
NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 05/29/2015
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION,FIRST DEPARTMENT
SNI/SI Networks L.L.C.,
Plaintiff-Appellant,
PRE-ARGUMENT STATEMENT
v.
Index No. 652471/2014
DIRECTV, LLC,
Defendant-Appellee.
Pursuant to Rule 600.17 of the Rules of the New York State Supreme Court, Appellate
Division, First Department, Plaintiff-Appellant SNI/SI Networks L.L.C. ("Smithsonian
Networks") hereby submits the following pre-argument statement:
1. Title of Action: The title of this action is the caption set forth above.
2. Full Names of the Original Parties and Any Change in Parties: The full
names of the original parties are set forth in the caption above, and there have been no changes.
3. Counsel for Plaintiff-Appellant Smithsonian Networks:
JENNER &BLOCK LLP
Stephen L. Ascher
Michael W. Ross
Christine I. Lee
919 Third Avenue, 38th Floor
New York, New York 10022
(212)891-1600(t)
(212)909-0815(~
4. Counsel for Defendant Respondent DIRECTV,LLC:
KIRKLAND & ELLIS LLP
Melissa D. Ingalls
Robyn E. Bladow
Michael A. Onufer
333 South Hope Street
Los Angeles, California 90071
(213)680-8400 (t)
(213)680-8500(~
John P. Del Monaco
601 Lexington Avenue
New York, New York 10022
(212)446-4800 (t)
(212)446-4900(fl
5. Nature and Object of this Action: This action was brought by Smithsonian
Networks, owner and operator ofthe Smithsonian Channel television program service, for breach
of contract against DIRECTV,LLC("DIRECTV"), a distributor oftelevision program services
via direct-to-home satellite. The action arises from DIRECTV's breach of the parties' October 6,
2012 agreement("Agreement"), pursuant to which DIRECTV makes Smithsonian Networks
available to its customers. For the period January 1, 2014 through present, DIRECTV has
underpaid Smithsonian Networks because of DIRECTV's erroneous interpretation ofthe "Most
Favored Nations"("MFN")provisions in the Agreement. Smithsonian has brought two claims,
one for breach of contract to recover damages arising from the breach and one for a declaratory
judgment that Smithsonian Networks' interpretation of the MFN provisions in the Agreement is
correct.
6. Court and Orders Appealed From: This appeal is taken from two discovery
Decisions and Orders of the Commercial Division of the New York State Supreme Court, the
Honorable Justice Oing, entered in Index No. 652471/2014. In an April 29, 2015 decision and
order entered in the office of the County Clerk the same day ("Competitors' Agreements
Order"), Justice Oing denied Smithsonian Networks' motion for protective order and ordered
Smithsonian Networks to produce agreements Smithsonian Networks has with other distributors,
including any related amendments or side letter agreements. In a May 26, 2015 order entered in
the office of the County Clerk on May 27, 2015 ("Confidentiality Order"), Justice Oing entered
an order for the production and exchange of confidential information that allows in-house
counsel to view information designated Highly Confidential, and rejects Smithsonian Networks'
request that Highly Confidential information be limited to outside counsel only.
7. Grounds for Reversal: The two orders should be reversed because Smithsonian
Networks' agreements with its competitors are not relevant to the dispute between the parties,
which concerns the interpretation of MFN provisions in the Agreement between Smithsonian
Networks and DIRECTV,and because those agreements contain highly sensitive trade secrets.
Smithsonian Networks should not be required to produce its agreements with its competitors
at
because those other agreements are irrelevant to the only issue genuinely in dispute—the
all
meaning ofthe MFN provisions in the Agreement. DIRECTV concedes that the agreements are
not relevant to Smithsonian Networks' claims and axgues only that they are relevant to an
affirmative defense that Smithsonian Networks committed an antecedent breach ofthe MFN
provisions by granting its competitors other advantages compared to DIRECTV. Crucially,
however, DIRECTV has admitted that it has absolutely no factual basis for asserting such an
affirmative defense and is fishing for evidence of such a defense by seeking precisely these
documents. If Smithsonian Networks is nevertheless required to produce its agreements with its
competitors, only DIRECTV's outside counsel should be permitted to review them, because the
agreements are commercially sensitive and will give DIRECTV an unfair advantage in future
contract negotiations with Smithsonian Networks.
8. Related Appeal: There are no other appeals pending in this matter.
9. Related Action: There are no other actions related to this matter.
10. As required a copy of both decisions from the lower court are annexed.
3
Dated: New York, New York Respectfully submitted,
MayZ9,2015
Steph n L. Ascher
Michael W.Ross
Christine I. Lee
JENNER &BLOCK LLP
919 Third Avenue, 38th Floor
New York, New York 10022
(212)891-1600 (t)
(212)909-0815(~
sascher@jenner.com
mross@jenner.com
cilee@jenner.com
Attorneysfor Petitioner-Appellants SNI/SI
Networks L.L.C.
TO: John P. Del Monaco
KIRKLAND & ELLIS LLP
601 Lexington Avenue
New York, New York 10022
(212)446-4800 (t)
(212)446-4900(~
john.delmonaco@kirkland.com
Melissa D. Ingalls(pro hac vice)
Robyn E. Bladow (pro hac vice)
Michael A. Onufer
KIRKLAND & ELLIS LLP
333 South Hope Street
Los Angeles, California 90071
(213)680-8400(t)
(213)680-8500(~
mingalls@kirkland.com
rbladow@kirkland.com
michael.onufer@kirkland.com
Attorneysfor Respondent-Appellees
DIRECTV, LLC
4
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FILED: NEW YORK COUNTY CLERK 05/29/2015 08:43 AM INDEX NO. 652471/2014 NYSCEF DOC. NO. 46 RECEIVED NYSCEF: 05/29/2015 SUPREME COURT OF THE STATE OF NEW YORK APPELLATE DIVISION,FIRST DEPARTMENT SNI/SI Networks L.L.C., Plaintiff-Appellant, PRE-ARGUMENT STATEMENT v. Index No. 652471/2014 DIRECTV, LLC, Defendant-Appellee. Pursuant to Rule 600.17 of the Rules of the New York State Supreme Court, Appellate Division, First Department, Plaintiff-Appellant SNI/SI Networks L.L.C. ("Smithsonian Networks") hereby submits the following pre-argument statement: 1. Title of Action: The title of this action is the caption set forth above. 2. Full Names of the Original Parties and Any Change in Parties: The full names of the original parties are set forth in the caption above, and there have been no changes. 3. Counsel for Plaintiff-Appellant Smithsonian Networks: JENNER &BLOCK LLP Stephen L. Ascher Michael W. Ross Christine I. Lee 919 Third Avenue, 38th Floor New York, New York 10022 (212)891-1600(t) (212)909-0815(~ 4. Counsel for Defendant Respondent DIRECTV,LLC: KIRKLAND & ELLIS LLP Melissa D. Ingalls Robyn E. Bladow Michael A. Onufer 333 South Hope Street Los Angeles, California 90071 (213)680-8400 (t) (213)680-8500(~ John P. Del Monaco 601 Lexington Avenue New York, New York 10022 (212)446-4800 (t) (212)446-4900(fl 5. Nature and Object of this Action: This action was brought by Smithsonian Networks, owner and operator ofthe Smithsonian Channel television program service, for breach of contract against DIRECTV,LLC("DIRECTV"), a distributor oftelevision program services via direct-to-home satellite. The action arises from DIRECTV's breach of the parties' October 6, 2012 agreement("Agreement"), pursuant to which DIRECTV makes Smithsonian Networks available to its customers. For the period January 1, 2014 through present, DIRECTV has underpaid Smithsonian Networks because of DIRECTV's erroneous interpretation ofthe "Most Favored Nations"("MFN")provisions in the Agreement. Smithsonian has brought two claims, one for breach of contract to recover damages arising from the breach and one for a declaratory judgment that Smithsonian Networks' interpretation of the MFN provisions in the Agreement is correct. 6. Court and Orders Appealed From: This appeal is taken from two discovery Decisions and Orders of the Commercial Division of the New York State Supreme Court, the Honorable Justice Oing, entered in Index No. 652471/2014. In an April 29, 2015 decision and order entered in the office of the County Clerk the same day ("Competitors' Agreements Order"), Justice Oing denied Smithsonian Networks' motion for protective order and ordered Smithsonian Networks to produce agreements Smithsonian Networks has with other distributors, including any related amendments or side letter agreements. In a May 26, 2015 order entered in the office of the County Clerk on May 27, 2015 ("Confidentiality Order"), Justice Oing entered an order for the production and exchange of confidential information that allows in-house counsel to view information designated Highly Confidential, and rejects Smithsonian Networks' request that Highly Confidential information be limited to outside counsel only. 7. Grounds for Reversal: The two orders should be reversed because Smithsonian Networks' agreements with its competitors are not relevant to the dispute between the parties, which concerns the interpretation of MFN provisions in the Agreement between Smithsonian Networks and DIRECTV,and because those agreements contain highly sensitive trade secrets. Smithsonian Networks should not be required to produce its agreements with its competitors at because those other agreements are irrelevant to the only issue genuinely in dispute—the all meaning ofthe MFN provisions in the Agreement. DIRECTV concedes that the agreements are not relevant to Smithsonian Networks' claims and axgues only that they are relevant to an affirmative defense that Smithsonian Networks committed an antecedent breach ofthe MFN provisions by granting its competitors other advantages compared to DIRECTV. Crucially, however, DIRECTV has admitted that it has absolutely no factual basis for asserting such an affirmative defense and is fishing for evidence of such a defense by seeking precisely these documents. If Smithsonian Networks is nevertheless required to produce its agreements with its competitors, only DIRECTV's outside counsel should be permitted to review them, because the agreements are commercially sensitive and will give DIRECTV an unfair advantage in future contract negotiations with Smithsonian Networks. 8. Related Appeal: There are no other appeals pending in this matter. 9. Related Action: There are no other actions related to this matter. 10. As required a copy of both decisions from the lower court are annexed. 3 Dated: New York, New York Respectfully submitted, MayZ9,2015 Steph n L. Ascher Michael W.Ross Christine I. Lee JENNER &BLOCK LLP 919 Third Avenue, 38th Floor New York, New York 10022 (212)891-1600 (t) (212)909-0815(~ sascher@jenner.com mross@jenner.com cilee@jenner.com Attorneysfor Petitioner-Appellants SNI/SI Networks L.L.C. TO: John P. Del Monaco KIRKLAND & ELLIS LLP 601 Lexington Avenue New York, New York 10022 (212)446-4800 (t) (212)446-4900(~ john.delmonaco@kirkland.com Melissa D. Ingalls(pro hac vice) Robyn E. Bladow (pro hac vice) Michael A. Onufer KIRKLAND & ELLIS LLP 333 South Hope Street Los Angeles, California 90071 (213)680-8400(t) (213)680-8500(~ mingalls@kirkland.com rbladow@kirkland.com michael.onufer@kirkland.com Attorneysfor Respondent-Appellees DIRECTV, LLC 4