OPINION AND ORDER
ROSEN, District Judge.
On June 8, 1993, Plaintiff filed a six-count complaint against Defendants in Macomb County, Michigan, Circuit Court. Count I of the complaint alleges a breach of 47 C.F.R. §§ 76.51-76.70, which are FCC regulations requiring carriage of, inter alia, local commercial television stations by cable television services. Count II asks for specific performance of these regulatory carriage requirements. Count III alleges Defendants were negligent in not complying with these mandates. Count IV asserts that Defendants violated a contract entered into by the parties on February 20, 1991. Count V alleges misrepresentation occurred in and around the 1991 contract. Count VI states Defendants interfered with advantageous business relationships or expectancies between WADL and advertisers and viewers.
On June 29, 1993, Defendants removed the action to this Court on the ground that Counts I and II raised a federal question. On February 25, 1994, Plaintiff moved for partial summary judgment on the issue of whether Defendants violated 47 C.F.R. §§ 76.51-70. Defendants replied on March 14, and brought their own motion for summary judgment on all counts that same day. Plaintiff responded on March 28, and Defendant replied on April 7.
After reviewing the pleadings and after hearing oral argument on May 26, 1994, this Court is prepared to rule on the pending motions. This memorandum opinion and order sets forth that ruling.
The following facts, unless otherwise indicated, have been stipulated to by the parties.
Plaintiff is a local television broadcasting station, also known as WADL-Channel 38. It operates out of Mt. Clemens, Michigan, and, at least prior to June of 1993, it primarily broadcast home-shopping programs.
Plaintiff has also been an "alternate affiliate" for CBS since 1990. As an alternate affiliate, it broadcasts CBS programming which the primary affiliate in the Metropolitan Detroit Area, WJBK-Channel 2, turns down. See Defendants' Response Brief, Ex. B (letter from CBS Affiliate Relations). WJBK is located in Southfield, Michigan.
Defendant Cablevision is a Delaware limited partnership with its place of business in Dearborn, Michigan. Defendant Clark is Cablevision's General Manager. Cablevision supplies exclusive cable services to the residents of Dearborn. One of the stations it broadcasts is WJBK.
In 1988, Mr. Franklin Adell, Plaintiff's president, wrote to Cablevision seeking its carriage of WADL in the Dearborn market. Mr. Adell continued his attempts to get WADL broadcast by Cablevision until February 20, 1991, when some sort of deal was struck. In its answers to interrogatories, Plaintiff asserted that:
See Defendants' Brief, Ex. K, Plaintiff's Answer to Defendant's First Set of Interrogatories, Q. 18. See also Plaintiff's Complaint, Ex. F ($2,500.00 check from Plaintiff to Defendant bearing notation "Cable Equipment").
At his deposition, Mr. Adell gave the following testimony:
See Plaintiff's Complaint, Ex. F; Defendants' Brief, Exs. B (Frank Adell Dep. 60-62).
Plaintiff, however, has conceded since Mr. Adell's deposition that Cablevision carried for some period of time WADL's late night CBS broadcasts. See Plaintiff's Response Brief, pp. 6-7 (stating that "there is no dispute the Defendant ceased carrying WADL's late night CBS programming earlier last year"). See also Joint Final Pretrial Order, p. 15 ("After February 20, 1991, Cablevision broadcast WADL's signal."). Plaintiff also may be retreating from its earlier position that the agreement was for permanent, full-time broadcasting. In its response brief, Plaintiff argued:
Plaintiff's Response Brief, p. 8.
Cablevision, however, has consistently asserted that the February, 1991 agreement was only to use WADL as a part-time substitute for late-night CBS broadcasting not picked up by WJBK-Channel 2. Mr. Reynolds testified:
Defendants' Brief, Ex. J (Reynolds Dep. 34-35.)
Finding that there was some broadcasting of WADL on Cablevision, but being uncertain as to when this broadcasting occurred, the Court contacted Defendants' counsel just prior to the hearing to answer the question when, if ever, Cablevision stopped its broadcasting of WADL. Counsel's "best guess," after talking to his clients, was sometime between April and June, 1992. At this point, his letter states, a switch used to get WADL (which was not part of the purchased equipment) failed. No one bothered to repair it, he states, because it had no real significance to Cablevision and because Plaintiff did not complain. See May 23, 1994 letter from Thomas J. Tallerico, Esq. (copied to Plaintiff's counsel). These assertions went uncontested when reoffered by Defendants' counsel at the hearing on their motion.
From February/March, 1991, to April 9, 1993, the parties had no relevant contact with one another that has made it into the record. In that interim, Congress passed the Cable Television Consumer Protection and Competition Act of 1992. The Act was passed with the following policies in mind:
It is the policy of the Congress in this Act to:
See 1992 Cable Act, § 2, 106 Stat. 1460, 1463, reprinted in 1992 U.S.C.C.A.N., vol. 1.
47 U.S.C. § 534.
Regulations promulgated by the FCC expand upon these statutory duties:
In light of this new law, on April 9, 1993, Washington counsel for WADL, William D. Silva, wrote to Cablevision and stated:
Plaintiff's Complaint, Ex. B.
Mr. Silva wrote again to Cablevision, specifically, Lew Scharfberg, Cablevision's Director of Programming, on May 7, 1993:
Plaintiff's Complaint, Ex. C. A copy of this letter was sent to Defendant Clark. Id.
On May 24, Mr. Scharfberg responded to Mr. Silva on behalf of Cablevision. He wrote:
Plaintiff's Brief, Ex. E.
Mr. Adell then personally delivered a letter to Defendant Clark, dated June 1, 1993, reiterating Plaintiff's position that Cablevision should begin carriage of WADL on June 2, and that failure to do so would result in (1) use of FCC complaint procedures, and (2) extensive damages to Plaintiff for which Plaintiff would hold Cablevision responsible. Plaintiff's Complaint, Ex. C.
Defendants did not begin carriage of WADL on June 2, 1993, and Plaintiff took two courses of action. First, it filed this case in state court on June 8. It also filed a complaint with the FCC in Washington, D.C., on June 15.
On November 24, 1993, the Chief of the FCC's Mass Media Bureau, Roy J. Stewart, issued a memorandum opinion and order mandating that Cablevision commence carriage of WADL within 46 days of entry of his order. Defendants' Brief, Ex. A. Chief Stewart concluded that WADL fell within the statutory class of stations that Cablevision must carry for two reasons. First, WADL's home shopping programming was not a bar to carriage because the FCC recently decided, pursuant to 47 U.S.C. § 534(g), that such programming serves the public interest.
Plaintiff claims that Defendants' failure to abide by the 1991 contract and by the duties under the 1992 Cable Act has cost it extensive damages in terms of lost programming. The parties agree that the Dearborn Real
Pursuant to a stipulated order dated February 7, 1994, Plaintiff may not introduce any additional documentary evidence of damages or any new damage theory that was not supplied to Defendant prior to February 11, 1994. See Defendants' Brief, Ex. I. Another stipulated order dated March 8, 1994, precluded Plaintiff from using expert damage testimony at trial. Id. Thus the record on damages for this action is complete.
THE STANDARDS GOVERNING CONSIDERATION OF A MOTION FOR SUMMARY JUDGMENT.
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c).
Three 1986 Supreme Court decisions— Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), and Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)—ushered in a "new era" in the standards of review for a summary judgment motion. These cases, in the aggregate, lowered the movant's burden on a summary judgment motion.
Celotex, 477 U.S. at 322, 106 S.Ct. at 2552.
After reviewing the above trilogy, the Sixth Circuit established a series of principles to be applied to motions for summary judgment:
See Street v. J.C. Bradford & Co., 886 F.2d 1472, 1479-80 (6th Cir.1989) (footnotes with citations omitted). The Court will apply the above principles in deciding the cross-motions for summary judgment.
COUNTS I & II MUST BE DISMISSED.
Defendants argue that the 1992 Cable Act and the regulations promulgated in its name do not establish, expressly or implicitly, a private cause of action. Plaintiff counters that the legislation does implicitly mandate the availability of private court suits.
The Court believes that Defendants have the stronger argument. The statute itself sets up the following exclusive remedial scheme:
47 U.S.C. § 534(d). Final orders of the Commission are appealable to U.S. Courts of Appeal pursuant to 28 U.S.C. § 2342 and 47 U.S.C. § 402.
The legislative history of the 1992 Cable Act does not indicate any retreat from the exclusivity of this remedial scheme:
H.R.Conf.Rep. 862, 102d Cong., 2d Sess. 68-69 (1992), reprinted in 1992 U.S.C.C.A.N. 1133, 1231, 1250-51 (emphasis added).
A reading of the statute and the legislative history reveals a clear Congressional intent to establish an administrative remedy for the new federal must-carry right, while preserving other rights and remedies interested parties may have in the cable field. Because the statute on its face sets up a purely administrative remedy for a violation of the must-carry requirement, and because the legislative history does not indicate any hedging in Congress' careful selection of this exclusive remedy, this Court holds that no private cause of action to enforce § 534(a) in U.S. District Court exists.
The Court draws support for its conclusion from Supreme Court cases which have considered whether an implied private cause of action existed in various federal regulatory schemes. In Cort v. Ash, 422 U.S. 66, 84-85, 95 S.Ct. 2080, 2091, 45 L.Ed.2d 26 (1975), the Court held that there was no implicit private cause of action for a shareholder against a corporation for its alleged violation of a federal criminal statute barring corporate expenditures on behalf of campaigns for the presidency of the United States. The Court came to this conclusion after carefully balancing the following factors:
422 U.S. at 78, 95 S.Ct. at 2088 (emphasis in original; citations omitted).
Applying this test to the 1992 Cable Act, the Court finds that local commercial television stations like WADL were intended beneficiaries of the Act and that the must-carry requirement is solely a creation of federal law. Nevertheless, even though creating a private right of action in stations like WADL would further the goal of the statute to "ensure that cable television operators do not have undue market power vis-a-vis video programmers," the Court believes that Congress clearly indicated its intent to have a strictly administrative remedy for breach of the must-carry provision. In the final analysis, it is Congress' intent that is the most salient factor in determining if a private cause of action for damages exists. See Touche Ross & Co. v. Redington, 442 U.S. 560, 568, 99 S.Ct. 2479, 2485, 61 L.Ed.2d 82 (1979) ("our task is limited solely to determining whether Congress intended to create the private right of action asserted....") (holding that no private damage action lay for failure of auditor to pick up irregularities on brokerage firm's reports submitted pursuant to Securities and Exchange Act of 1934).
After extensive hearings and conferences, Congress carefully and deliberately chose a detailed administrative remedy for violations of § 534(a)'s must-carry mandate. A local television station must complain in writing to
Given the clear choice that Congress made in favor of an administrative remedy for breach of the must-carry provision, it is simply not this Court's appropriate role to create a private cause of action which can be brought directly in U.S. District Court. As pointed out in the Touche Ross & Co. decision, "when Congress wished to provide a private ... remedy, it knew how to do so and did so expressly." 442 U.S. at 572, 99 S.Ct. at 2487. This it did not do here, and the Court will not do so either.
Because Counts I and II of Plaintiffs complaint ask for private enforcement of the 1992 Cable Act, they are dismissed.
COUNT III MUST BE DISMISSED.
This Count, which Plaintiff did not bother to defend in its response to Defendants' motion for summary judgment, alleges that Defendants were negligent in their performance of the must-carry requirement of the 1992 Cable Act.
COUNT IV MUST BE DISMISSED.
The Court also believes that Plaintiff's claim for breach of contract arising from the 1991 "agreement" between the parties should be dismissed, although not for the main reason asserted by Defendants.
The Statute Of Frauds Is No Bar To Plaintiff's Claim.
Defendants used much of their brief arguing to the Court that Plaintiff's claim should be barred because of the statute of frauds. M.C.L. § 566.132. That statute states (with a slight rearrangement of clause order by the Court) that "[e]very agreement that, by its terms, is not to be performed in 1 year from the making thereof ... shall be void, unless such agreement, contract, or promise, or some note or memorandum thereof be in writing and signed by the party to be charged therewith, or by some person by him thereunto lawfully authorized...." Defendants assert that the "agreement" that Plaintiff argues was made—that Cablevision permanently carry WADL in return for the $2,500 check for equipment—could not be performed in a year and that the check is an insufficient writing to get the agreement outside of the statute of frauds.
This Court disagrees on both points. Cases more recent than the ones cited by Defendants have made the statute of frauds a less formidable defense to certain contract claims. First, it is now well-settled that "a contract for an indefinite term has traditionally been considered capable of performance within the first year." Dumas v. Auto Club Ins. Ass'n, 437 Mich. 521, 473 N.W.2d 652, 658 (1991) (Riley, J., writing for three-member plurality and agreeing with dissenting Justice Levin's analysis on this point). Absent evidence that the promise can in no way be performed in a year, an indefinite commitment will fall outside the statute of frauds. See Dumas, 437 Mich. 521, 473 N.W.2d at 658 (Riley, J.) (holding statute of frauds barred suit "to enforce agreements encompassing
Here, the promise to put WADL on the air permanently full-time or part-time could have been performed within a year, just as a promise to permanently employ a person can be performed within a year. In the same way a person may expire or quit prior to completion of a year, and, thus, fully complete the applicable contract, so may a television station stop operating or withdraw from the agreement—for whatever reason—within a year, and thereby fully complete an oral, permanent broadcasting agreement such as the one in this case. The Court, therefore, does not find the one-year hurdle a very difficult one for Plaintiff to overcome.
Even if this Court were to hold that the statute of frauds did apply because the alleged contract could not be performed within the year, the Court is satisfied that the $2,500 check written by Plaintiff and cashed by Defendant is a sufficient written record of an agreement to satisfy the statute's demands. Although Defendant cited a number of (somewhat dated) cases in support of its position, the Court chooses to rely instead on then Justice Ryan's decision in Opdyke Inv. Co. v. Norris Grain Co., 413 Mich. 354, 320 N.W.2d 836 (1982). In that case, the Michigan Supreme Court upheld against a statute of frauds attack a memorandum of understanding which preceded a planned—but ultimately unachieved—final contract. Justice Ryan wrote:
413 Mich. 354, 320 N.W.2d at 841-42 (emphasis added).
Given this test, and the language of the applicable statute of frauds, the Court is convinced that the $2,500 check endorsed and deposited by Cablevision is a sufficient writing to bind it to some sort of agreement with Plaintiff. It cannot be contested that there was at least an agreement for part-time, selective broadcasting of WADL; otherwise, the admitted expenditure for, and installation of, "cable equipment" that the check went towards would have been unnecessary. These facts, then, make it impossible for the Court to hold that the statute of frauds bars Plaintiff's claim.
The Contract That The Parties Entered Into Was For Partial Coverage.
Now that the Court has held that there was some sort of agreement between the parties, its next task is to determine the scope of that agreement and whether it was breached.
Performance is often an excellent guide to intent, and it is really all one has to go by here. To fulfill their agreement, Plaintiff paid Defendant $2,500 to cover the cost of receiving equipment. Defendant purchased the equipment, installed it, and used it to pick up some of WADL's late-night programming through CBS, programming that was not transmitted by WJBK. These broadcasts occurred from February, 1991 until April to June of 1992, at which point a mechanical malfunction shut off the possibility of any further transmissions. Neither Plaintiff nor Defendant did anything about it, and may not even have noticed it. Plaintiff never made any attempts to monitor or expand its carriage by Cablevision until its "must-carry"
The facts in the record, then, demonstrate to the Court that no reasonable jury would find that the parties agreed to 24-hour, 7-days-a-week carriage of WADL on Cablevision. Rather, the parties agreed to indefinitely permit Cablevision to pick up WADL those occasional times each week that it could not get CBS late-night broadcasting on WJBK. Cablevision, thus, would have CBS programming for its viewers whenever it wanted it, and WADL would have additional viewers for those times. This agreement is the only way the Court can reconcile the check with both parties' completely lackadaisical approach to WADL's carriage on Cablevision.
Given this agreement, there is no evidence that any of Plaintiff's so-called damages were the result of a breach of contract. The agreement did not envision WADL broadcasts of anything other than late-night CBS programming, not the kind of shows upon which Plaintiff claims losses.
Even assuming, arguendo, that the record did not permit the Court to reach the above conclusion on what the parties actually contracted to do, it still believes that there is no way for Plaintiff to prove the damages it claims. Defendants correctly point out that Plaintiff was under a duty mitigate its losses by informing Cablevision that any breach of the 1991 agreement was causing Plaintiff damages. See Oakland Metal Stamping Co. v. Forest Indus., Inc., 352 Mich. 119, 89 N.W.2d 503, 506 (1958) (duty to mitigate commercial damages not met when plaintiff failed to discover defects in first shipments of parts and cancel further shipments until defects were fixed). The fact that there is no evidence of record that Plaintiff ever protested not being on Cablevision, then, has import beyond the fact that it lends further credence to the limited scope of its agreement with Cablevision, and that any breach thereof was of no interest to Plaintiff. By not investigating Cablevision's compliance and informing Cablevision that it was losing customers due to the alleged breach, Plaintiff failed to fulfill its duty to mitigate damages. Therefore, the losses stemming from the alleged breach should not fall upon Defendants.
For these reasons, then, the Court does not believe that there are any material questions of fact remaining on this count that would permit Plaintiff to prevail at a trial.
COUNT V MUST BE DISMISSED.
Turning now to Count V, it alleges that Defendant Cablevision, through its agents, is
With respect to the 1991 contract, Defendants correctly point out that in general, "[f]ailure to carry out a promise to do a future act does not constitute actionable fraud; instead, the remedy, if any, lies in a suit for breach of contract." Michigan Nat'l Bank v. Holland-Dozier-Holland Sound Studios, 73 Mich.App. 12, 250 N.W.2d 532, 535 (1976). Plaintiff here is suing on Cablevision's failure to make good on its alleged promise to carry WADL full-time starting in February, 1991, so this rule applies to presumptively bar Plaintiff's fraud claim.
The only relevant exception to this rule is that "fraudulent misrepresentation may be based upon a promise made in bad faith without intention of performance." Hi-Way Motor Co. v. International Harvester Co., 398 Mich. 330, 247 N.W.2d 813, 816 (1976). Hi-Way Motor Co. further stated that "evidence of fraudulent intent, to come within the exception, must relate to conduct of the actor `at the very time of making the representations, or almost immediately thereafter.'" 398 Mich. 330, 247 N.W.2d at 817.
In this case, as noted above, Cablevision complied with the terms of the agreement that the Court has found for over a year. Thus, there is no evidence that it committed any intentional fraud under this exception, or otherwise, at the time of contracting. Even assuming, arguendo, that there was a contract for full-time carriage, the Court sees no evidence, other than non-compliance, to suggest bad faith. Absent additional evidence, the Court does not believe that the Plaintiff has created a material question of fact—with evidence suggesting the "clear and convincing" proof necessary in a fraud claim—on whether Cablevision acted in bad faith when it entered into the 1991 agreement with Plaintiff.
As for the events of 1993, Plaintiff has similarly failed to make out essential elements of fraud; this time, that a material misrepresentation was made on which the suing party reasonably relied. See U.S. Fidelity & Guaranty Co. v. Black, 412 Mich. 99, 313 N.W.2d 77, 82-85 (1981). Cablevision stated in its May 24, 1993 letter that "if WADL meets all criteria to be entitled to must-carry status, CVI will comply with the FCC's must-carry rules." This letter, then, clearly put Plaintiff on notice that Cablevision was contesting Plaintiff's assertion that WADL met these requirements. Cablevision has continued its resistance to carrying WADL to the present. Because the letter accurately reflected Cablevision's resistance to putting WADL on the air, then, it simply did not contain a material misrepresentation of fact.
Perhaps even more significantly, there is no question that Plaintiff did not rely on the statements in the letter in any way. Within four weeks, it had fired back at least one threatening letter and had initiated lawsuits in two different venues. This is hardly detrimental reliance, especially considering the fact that by this time two of the three shows that Plaintiff claims to have lost made their last WADL broadcast at least a year before, and this Court has no hard evidence regarding solicitation of business with the third (Arab Voice). In light of these facts, the Court cannot find that Plaintiff's misrepresentation claim can survive summary judgment.
COUNT VI MUST BE DISMISSED.
Plaintiff's final count for tortious interference with a business relationship or expectancy can also be easily dismissed. The Michigan Court of Appeals has developed the test for tortious interference with business relationships which this Court will apply:
Feldman v. Green, 138 Mich.App. 360, 360 N.W.2d 881, 891 (1984). Accord Formall, Inc. v. Community Nat'l Bank, 166 Mich.App. 772, 421 N.W.2d 289, 292-93 (1988) (adding that "a per se wrongful act is an act that is inherently wrongful or one that is never justified under any circumstances"). It follows that to survive summary judgment, Plaintiff must come forward with evidence creating a material issue of fact on the issues of whether Defendants acted in an outrageously wrongful way and with the intent to undermine Plaintiff's business.
Plaintiff has failed to meet this burden. The most that Defendant can be said to have done is to breach a 1991 agreement with Plaintiff to indefinitely carry WADL full-time until it in fact began full carriage in January, 1994. There is no showing that this act was per se wrongful, let alone done with the any kind of intent to undermine WADL's business relationships or expectancies. In light of the complete absence of any factual support for this claim—or legal argument, for that matter—this Court must dismiss this count as well.
For the foregoing reasons,
NOW, THEREFORE, IT IS HEREBY ORDERED that Defendants' motion for summary judgment is GRANTED.
IT IS FURTHER ORDERED that Plaintiff's motion for partial summary judgment is DENIED as moot.
LET JUDGMENT BE ENTERED ACCORDINGLY.
47 U.S.C. § 534(g).
Furthermore, even if the Court should read as some sort of promise the statement in that letter that "[i]f WADL meets all criteria to be entitled to must-carry status, CVI will comply with the FCC's must-carry rules," it is not a legally enforceable promise in contract law. It is well-settled that a pre-existing legal duty is insufficient consideration to support a valid contract. See, e.g., Borg-Warner Acceptance Corp. v. Department of State, 433 Mich. 16, 444 N.W.2d 786, 788 (1989) (lender sued Secretary of State for alleged breach of contract arising from payment of fee to have state office do a lien search; state office was under statutory duty to perform task, so there was no consideration). Thus, in no way can the May 24, 1993 letter be construed to create an additional contractual right in Plaintiff.