Local Lawsuit Case, Research Paper Example

Facts

Several Northern Virginia restaurants are facing litigation involving their alleged illegal use of pay-for-view sports programming that has been marketed by Integrated Sports Media Inc. of Hoboken, New Jersey (Foroughi, 2002). The action was filed in the U.S. District Court in Alexandria, Virginia. According to the complaint filed in the lawsuit, six of the defendant restaurants broadcast a soccer match between El Salvador and the Republic of Trinidad and Tobago without the permission of Integrated Sports Media Inc. The seventh defendant broadcast a lightweight championship boxing match. The Complaint alleges that the plaintiff, Integrated Sports Media Inc. had exclusive rights to broadcast and distribute the rights to said broadcast to commercial establishments throughout Virginia and that restaurants in the protected area, specifically the restaurants mentioned in the suit, had profited by stealing a service that they should have purchased. Not unexpectedly, the restaurants are arguing that the facts in the case are not that simply stated and that they possess a defense to the plaintiff’s Complaint.

The defendants are arguing that the restaurants were under the impression that they had legally obtained the broadcasting rights from Dish Network, a nationwide satellite television provider but the plaintiff counter said argument with the statement that Dish Network rights are limited to residential television viewers and that Dish has never purchased the more costly commercial rights necessary to broadcast in retail establishments.

The plaintiff is this action is seeking $110,000 in damages from each of the seven restaurants. The defendants counter this demand by pointing out that the demands far exceeds any profit the plaintiffs may have garnered from the sale of such rights. The defendants, unfortunately, face the likelihood of being forced to pay the plaintiff’s attorney fees if they should not prevail on the merits while the same is not true for plaintiffs. Such caveat may place the defendants in a position where they be forced to consider a possible settlement. On the other hand, the plaintiff may be seeking relief against defendants that if they lose are not likely to be in a position to pay the damages. The restaurants, in question, are family owned organizations that operate on a shoestring budget.

Risk Management Measures

The defendants in question in this case had a variety of options available to them that would have allowed them to avoid the problems that they now face. Avoiding risk involves the identification, assessment, and prioritization of risks in a business situation. Once this process is begun the business owner is then free to maximize his resources in an effort to control his risk or maximize the possibility of opportunities (Das, 1998). In the instant case, the best approach for the restaurants involved, the named defendants, would have been for them to either have negotiated directly with Integrated Sports Media Inc. or, if there is some substance to their argument that their agreement with Dish Network did include the rights to broadcast the programming they should have made sure that such agreement was clearly set forth in their written contract with Dish Network.

The facts in the case will eventually clear lay out what the written contractual arrangements between the various entities was at the time of the programs that are at issue. The restaurants are not alleging that they had purchased the rights to the programming from Integrated Sports Media Inc. but merely that they believed that they had purchased said rights from Dish Network. This is an issue that can be resolved through an examination of the either the defendants’ original contracts with Dish Network or any subsequent purchase orders. If the defendants are relying on some oral representation from a sales representative from Dish Network the situation becomes more confusing. At said time the case’s outcome will become an evidentiary and creditability problem. Nevertheless, all such problems could have been eliminated by each of the defendants through the simple use of a clear, and irrefutable, written contract that afforded them the rights to broadcast the soccer and boxing match in question.

Ethical Considerations

On the surface the position of the various defendants in this action does not appear to be a good one. The argument being presented by the defendants that they believed that they had purchased the rights from Dish Network may or may not be a good one. The evidence presented by the parties will clarify the issue and, once clarified, the defendants’ cases either acquire some measure of credibility or their individual business integrity becomes a paramount issue.

In reviewing the facts that are presently available as the litigation unfolds, it appears that there is a strong likelihood that the defendants openly stole the programming (Wagner, 2001). How this was done is not clear in that such programming is usually blocked and only available with proper security clearance provided by the broadcaster. The fact that the restaurants had apparent full access to the broadcasts lends some credence to their argument that they obtained the rights from Dish Network but it does not establish it categorically. Pirating of broadcast programming is done frequently and can be done by those with only rudimentary skills and technical knowledge. Again, as with the contractual evidence, such pirating is easily discoverable. Actually proving who the pirate was may still present problems but the plaintiff’s technical staff should be capable of determining how and when the pirating occurred.

Quite simply, unless the defendants are equipped to demonstrate that they have reliable evidence to support their argument that they believed that they had purchased the rights from Dish Network they should be ready to negotiate a quick and affordable settlement.

Legal Sources

The instant case is not a complicated legal one. A clear paper trail should be available to illustrate the relative arguments of the parties. The issue at hand is a contractual one and is subject to the common law concepts of offer, acceptance, and consideration. The plaintiffs must prove that the programming was stolen and that there was never any contractual relationship between the parties authorizing the various defendants to use the programming (Harbord, 2001). Such proof can be provided through the testimony of witnesses watching the programming in the defendants’ restaurants and/or through digital records that the programming signal was broadcast to the restaurants. The presentation of any contracts between the respective parties should clearly clarify the existence of any contractual relationship and the extent of that relationship. As to the defendants, they will have to establish a contractual relationship with Dish Network and any written proof as to the formation of that relationship. If the defendants are to rely upon an oral agreement, they will have to provide proof as to the circumstances of said agreement.

The plaintiffs may experience some difficulty establishing the value of their damages. Due to a variety of factors, their demand for $110,000 from each defendant would appear to be out of line with their actual loss. Additionally, on a more pragmatic level, proving the damages is one thing but collecting is an entirely different matter. The plaintiff may be better off discussing a settlement where they get an acknowledgement from the defendants that they were pirating the programming in order to use such acknowledgement as a example against others considering such action and accepting a token dollar payment from the named defendants.

Alternative Resolution

For a variety of reasons already set forth herein both sides to this pending litigation should consider alternative resolutions. The plaintiff, regardless of the strength of its case, faces a real likelihood that even if they should prevail their likelihood of collecting any potential verdict is minimal. The defendant restaurant owners are each barely surviving financially and cannot afford either the potential damages or to pay their attorneys to defend them. The plaintiffs may win the battle and lose the war.

The defendants, on the other hand, may be facing a case that they cannot win. If they lose there is the likelihood that any damage award assessed against them may result in their having to close down their businesses. Under such circumstances, they are likely better off attempting to negotiate a settlement that is financially tolerable. They certainly cannot afford the possibility of a big damages’ award in the long term and they cannot afford the costs of litigation in the short term. A quick settlement is advisable for both sides of the litigation.

References

Das, T. (1998). Resource and Risk Management in the Strategic Alliance Making Process. Journal of Management , 21-42.

Foroughi, A. (2002). Digital rights management: a delicate balance between protection and accessiblity. Journal of Information Science , 389-395.

Harbord, D. (2001). Contracts and Competition in the Pay-TV Market. Chicago: Northwestern University-Kellogg School of Management.

Wagner, S. C. (2001). Considerations in Ethical Decision-Making and Software Piracy. Journal of Business Ethics , 161-167.