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BARNSTEAD BROADCASTING CORP. v. OFFSHORE BROADCAST

October 21, 1994

BARNSTEAD BROADCASTING CORPORATION, Plaintiff,
v.
OFFSHORE BROADCASTING CORPORATION, Defendant.



The opinion of the court was delivered by: PAUL L. FRIEDMAN

 This matter is before the Court on Plaintiff's Motion for Temporary Restraining Order and Preliminary Injunction. The Court provided Defendant a period of ten days from the date the Complaint and Motion were filed within which to file its Opposition. A hearing on Plaintiff's motion was held on October 19, 1994. BAF Enterprises, Inc. ("BAF") moved to intervene pursuant to Rule 24(a)(2), Fed. R. Civ. P., to protect its interest in this matter, and the Court will grant the motion to intervene.

 Having fully considered the Complaint in this matter, Plaintiff's Memorandum of Points and Authorities and accompanying affidavit and exhibits, Defendant's Opposition and accompanying affirmations and exhibits, Plaintiff's Reply to Opposition, and the Intervenor's Memorandum of Law, and having provided counsel ample opportunity to fully argue their positions in open court, the Court will treat the pending Motion as one for a preliminary injunction. Plaintiff has demonstrated that it has a substantial likelihood of success on the merits, that it and BAF will be irreparably harmed if the preliminary injunction is not granted, that Defendant will not be harmed if an injunction is granted, and that the public interest favors the grant of such an injunction. The Court therefore grants Plaintiff's Motion for a Preliminary Injunction.

 I. Background

 Plaintiff, Barnstead Broadcasting Corporation ("Barnstead"), has filed a complaint for breach of a 1990 written contract between Barnstead and the Defendant, Offshore Broadcasting Corporation ("Offshore"), for breach of a 1994 oral agreement, for fraudulent misrepresentation and failure to disclose material facts, and for interference with a business relationship. For purposes of the current motion, the Court considers only Count I of the Complaint alleging breach of the 1990 written contract.

 Plaintiff alleges that in 1985 William A. Barnstead purchased the stock of Metrovision, Inc. ("Metrovision"). Metrovision held a construction permit for the construction of a new television station in New Bedford, Massachusetts. The construction permit was due to expire in September of 1986, but Metrovision filed an application with the Federal Communications Commission ("FCC") to extend the time to construct the television station. Defendant Offshore, which held an FCC construction permit to build a television station on Block Island, Rhode Island, filed an Informal Objection with the FCC to Metrovision's application for an extension of time. In 1989, while this objection was still in litigation before the FCC, Offshore applied to extend its own construction permit for the Block Island station. Metrovision filed an Informal Objection to Offshore's application.

 On November 20, 1990, Metrovision and Offshore executed the written Agreement which is the subject of this lawsuit. Under that Agreement, the parties agreed to withdraw their respective Objections to one another's permit extension applications. They also agreed to refrain from filing further objections concerning the construction of their respective stations and not to interfere "in any way" with the construction and operation of the other's station. The obligations of each party were set forth in virtually identical language in the November 1990 Agreement. Because it is crucial to the decision now before this Court, the Court quotes in full the paragraph of the November 1990 agreement that sets forth Defendant Offshore's obligations:

 
Offshore agrees that it shall withdraw all of its pending oppositions to Metrovision's pending application at the Commission. It also agrees that it shall not file any pleading or document of any kind with any state or Federal court, or with any local, state, or Federal administrative agency or body regarding the construction of Metrovision's station as proposed in BPCT-800131KI, as extended (with any subsequent modification thereof), nor shall it interfere in any way with the construction or operation of the station; provided, however, that the foregoing shall not preclude Offshore from opposing any application filed by Metrovision to move the station's transmitter solely on the ground that (1) the Metrovision proposal would be short-spaced to Offshore's WOST-TV or (2) the Metrovision proposal would cause electrical interference as defined by the FCC's rules and regulations to Offshore's WOST-TV.

 In accordance with the November 1990 Agreement, Metrovision and Offshore dismissed their respective objections to the other's extension application "with prejudice." In 1991, both Metrovision's and Offshore's extension applications were granted by the FCC, it is alleged, on the specific representation to the FCC that neither would pursue any further litigation against the other. In 1991, Metrovision, with the FCC's approval, assigned its construction permit for the television station to Barnstead. Barnstead subsequently obtained several extensions from the FCC on its construction permit. The current extension expires on October 21, 1994. Barnstead will have to seek a further extension unless, before that date, the FCC acts on the pending assignment application, discussed below, that was filed with the FCC on June 28, 1994.

 On June 17, 1994, Barnstead and BAF Enterprises, Inc. executed an assignment agreement pursuant to which Barnstead agreed to assign its construction permit to BAF upon payment of $ 660,000 to Barnstead. The agreement between Barnstead and BAF also grants Barnstead the right to broadcast public affairs programs once a week for at least five years after the television station is constructed. The agreement further provides that if the assignment is not consummated by June 17, 1995, BAF has the unilateral right to terminate the agreement. Pursuant to applicable law and rules of the FCC, any such assignment of a construction permit must have the prior approval of the FCC. Therefore the agreement between Barnstead and BAF and an assignment application were filed with the FCC on June 28, 1994. At oral argument, it was represented by both parties that once the assignment application is approved, an assignee like BAF would automatically receive a twelve-month construction permit.

 The assignment application was placed on the FCC's public notice on July 11, 1994. Petitions to deny were due to be filed no later than August 10, 1994, and no such petitions were filed. On or about August 18, 1994, however, Offshore filed an Informal Objection to the Barnstead assignment application. *fn1" Plaintiff alleges that Offshore's filing of the Informal Objection was in violation of the above-quoted paragraph of the November 1990 Agreement between Barnstead and Offshore, a breach of which Barnstead advised Offshore after the Informal Objection was filed. Plaintiff alleges that if Offshore's Informal Objection is not withdrawn there is a serious risk that the FCC's action on the application will be delayed beyond June 17, 1995, giving BAF the unilateral right to terminate its agreement with Barnstead. Plaintiff further alleges that as a result of Defendant's breach of contract Barnstead is at risk of losing the contract with BAF, including a right to broadcast the weekly one hour public affairs program for five years and the purchase price of $ 660,000.

 For these and other reasons, Plaintiff seeks a preliminary injunction under which Defendant Offshore would be directed (1) immediately to withdraw its Informal Objection to the assignment application of Barnstead's construction permit to BAF; (2) to refrain from any interference with Plaintiff's assignment agreement with BAF and its approval by the FCC; and (3) to refrain from any further interference with construction of the television station by Barnstead and its assignee, BAF.

 II. Analysis

 According to the traditional formulation for a preliminary injunction in this jurisdiction, a movant is entitled to injunctive relief upon a showing (1) that it has a likelihood of success on the merits; (2) that movant will suffer irreparable harm if the relief is denied; (3) that other interested parties will not suffer substantial harm if injunctive relief is granted; and (4) that the public interest favors the granting of relief or, at least, that the granting of relief is not adverse to the public interest. National Wildlife Federation v. Burford, 266 U.S. App. D.C. 241, 835 F.2d 305, 318-19 (D.C. Cir. 1987); Washington Metropolitan Area Transit Comm'n. v. Holiday Tours, Inc., 182 U.S. App. D.C. 220, 559 F.2d 841, 842-44 (D.C. Cir. 1977); Virginia Petroleum Jobbers Ass'n. v. FPC, 259 F.2d 921, 104 U.S. App. D.C. 106 (D.C. Cir. 1958). Further, when the other three factors strongly favor interim relief, a court may grant injunctive relief where movant has made out a "substantial case" on the merits rather than having demonstrated a likelihood of success; the necessary level or degree of possibility of success will vary according to the court's assessment of the other factors. Washington ...


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