A Massachusetts federal district court judge has denied a motion to dismiss a key claim in a nearly three-year old lawsuit tied to misdirected retransmission consent fees, a request that was filed by attorneys representing the former licensee of a Nexstar Media Group-run TV station.
This keeps a counterclaim from Verizon alive in the case, which centers on “FOX Providence,” owned by Mission Broadcasting, and its previous owner, associated with “Super Towers.”
The denial of the motion to dismiss was handed to Mission’s WNAC-TV in Providence, R.I., on Monday (2/26), one day before Judge Allison Burroughs denied a motion for summary judgement on contract claims filed by Nexstar attorneys. However, Nexstar can refile the motion in this complex case and has until October 7 to do so.
In June 2021, WNAC-TV formally became a Mission-owned station, as Nexstar exercised an option that dates to May 2003. Like other Mission stations, Nexstar handles the services associated with WNAC, permissible under FCC regulatory policy.
Before this transpired, WNAC LLC was the party that owned the station branded as “FOX Providence,” and that is the entity at the center of the case being heard in the U.S. District Court for the State of Massachusetts.
WNAC LLC is directly associated with Super Towers Inc., a company controlled by Tim Sheehan. This is the company that is engaged in a lawsuit against both Verizon Corporate Services Group Inc. and Nexstar — explaining how WNAC LLC is not connected to Mission in any way.
How “WNAC LLC” is neither related to Mission nor Nexstar is perhaps germane to the story, as Sheehan’s group filed the lawsuit in federal court on the grounds that both Verizon and Nexstar conspired to wrongly retransmit WNAC-TV in violation of the copyright act. How so? One must rewind the clock to December 2016, one month before Nexstar’s merger with Media General, a company that two years earlier had merged with LIN TV. The right to negotiate the retransmission rights of WNAC-TV passed from LIN, to Media General, and eventually to Nexstar.
Ahead of the closing of the Nexstar-Media General merger, Nexstar executed a retransmission consent agreement with Verizon with a term of January 1, 2017 to December 31, 2019. Of particular interest to WNAC LLC in this agreement is Section 15, an “after-acquired station provision.” This states that, should Nexstar acquire another Providence DMA station, that station will become a part of the WNAC-TV agreement.
There’s a problem with this arrangement, WNAC LLC argued. An April 2015 federal law prohibited Nexstar from negotiating the retrans rights for WNAC-TV as it owned crosstown WPRI-12, Sheehan’s group contends. Nexstar’s agreement nevertheless remains intact, and it pocketed the retransmission consent dollars for that period of time, which pre-dates Mission ownership. As WNAC LLC sees it, it wasn’t even included in the discussions between Verizon and Nexstar, and that’s wrong.
Fast-forward to today. Counterclaims that WNAC LLC was the party responsible for alerting Verizon that it, and not Nexstar, needed to be compensated for the right to bring “FOX Providence” to Verizon FiOS customers were filed. WNAC LLC sought the judge’s permission to dismiss those claims; Judge Burroughs has now said no.
Key to the ruling is that, in Verizon’s view, “despite WNAC’s knowledge that Verizon was retransmitting its signal while paying elevated rates to Nexstar, and WNAC’s “stated belief that Verizon lacked consent to retransmit [that] signal, WNAC failed to engage in negotiations with Verizon for its consent to retransmit … WNAC did not designate an authorized representative to negotiate on its behalf; did not approach Verizon about
a retransmission-content agreement; and did not ever suggest that Nexstar lacked authority to collect retransmission-consent fees on its behalf.”
WNAC LLC asserts that its conduct, or inaction, was neither unfair nor deceptive.
Burroughs disagrees with the Sheehan group, ruling, “Verizon has adequately alleged that WNAC engaged in unfair acts or practices.”
With the motion to dismiss denied, litigation is expected to continue until Burroughs issues a final ruling.
