Beach Tv Properties Inc. v. Soloman ( 2022 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
THE ATLANTA CHANNEL, INC., :
:
Plaintiff, : Civil Action No.: 15-1823 (RC)
:
:
v. : Re Document No.: 361
:
HENRY A. SOLOMON, :
:
Defendant. :
MEMORANDUM OPINION
DENYING PLAINTIFF’S MOTION FOR A NEW TRIAL AND GRANTING PLAINTIFF’S MOTION FOR
ENTRY OF JUDGMENT ON THE COURT’S PREVIOUS PARTIAL SUMMARY JUDGMENT ORDER
I. INTRODUCTION AND BACKGROUND
Plaintiff Atlanta Channel, Inc. (“ACI”), which owns a tourism-content television station
in Atlanta, brought this legal malpractice lawsuit after its attorney, Defendant Henry Solomon,
filed an incomplete license application (called a Statement of Eligibility) on its behalf with the
Federal Communications Commission (“FCC”). See Second Am. Compl. ¶¶ 26–29, 73–79, ECF
No. 69. Solomon’s mistake led to the FCC dismissing ACI’s application, costing the company
the opportunity to obtain Class A status for its low-power television (“LPTV”) license, which
bears the call-sign WTHC-LD. Settlement Agreement, ECF No. 263-2. Class A status provides
an LPTV station with certain protections against displacement from its assigned broadcast
frequency by full-power television stations or other spectrum users. See Trial Ex. 201 ¶¶ 6, 18,
ECF No. 326-7. Solomon stipulated to the fact that he was liable to ACI for legal malpractice
because of his deficient filing, but the parties disagreed as to whether he was responsible for any
damages to ACI and if so, how much. See Settlement Agreement.
The case proceeded to a jury trial on these issues. There, the jury heard that in 2012
Congress passed a piece of legislation known as the Spectrum Act, which caused the FCC to
reallocate a substantial amount of spectrum from television broadcast users to wireless
broadband carriers. See Trial Tr. at 89–90. The FCC implemented this directive by designing a
reverse auction process, in which full power Class A stations—but not those LPTV stations like
WTHC that lacked Class A status—had several options, including selling their station at a price
determined in the auction or moving from their ultra-high frequency (“UHF”) channel to an
alternative UHF channel with similar coverage. See id.
During the 2017 auction process, the spectrum occupied by WTHC’s longtime broadcast
channel, UHF Channel 42, was repackaged and sold to a broadband carrier, T-Mobile. See Trial
Ex. 201 ¶ 72; Trial Tr. at 91–92. As a non-Class A LPTV station, WTHC was not entitled to sell
its license as part of the auction or to be guaranteed a replacement UHF Channel. Instead, it was
“permitted to remain on [its] existing channel[] until asked to move by the broadband wireless
provider to whom the channel had been assigned.” Pl.’s Mem. Supp. Mot. Pursuant to Fed. R.
Civ. P. 59 at 16 n.13 (“Mem.”), ECF No. 361-1; Trial Tr. at 91–92. T-Mobile asked ACI to
move WTHC off of UFH Channel 42 in 2020, and ACI was forced to relocate to very high
frequency (“VHF”) Channel 3. Mem. at 7–8; Trial Tr. at 91–92. VHF Channel 3 could reach
only 2 million viewers, a large reduction from WTHC’s previous UHF Channel 42 reach of 5.5
million viewers. Mem. at 27.
ACI claimed that Solomon’s negligent failure to obtain Class A status for ACI caused
this downgrade, and presented expert testimony in support of two different methods of
establishing the value of the attendant diminution in value of the WTHC license. Specifically,
ACI sought to establish the value of “what ACI would have had” in the absence of Solomon’s
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malpractice, “a Class A license, serving five and a half million people in Atlanta, less what ACI
has, a low-power TV channel serving two million people.” Trial Tr. at 843. First, ACI’s expert
looked to the sale prices of comparable Class A stations in order to estimate that if WTHC had
been a Class A station with a coverage of 5.5 million people, it would have been worth $6.5
million. Subtracting WTHC’s value on VHF Channel 3’s reduced reach yielded a damages
estimate of $6.2 million. Trial Tr. at 178–79; Mem. at 8. Second, in advance of the 2017 reverse
auction, there was a market for options on the proceeds Class A stations would receive in the
auction. By looking at comparable option sales, the expert estimated WTHC’s Class A value to
be $6.2 million. Id. at 172–73; Mem. at 6. Solomon presented experts to criticize these
evaluations. In the course of criticizing the work of ACI’s damages expert, one of Solomon’s
experts testified that $900,000 was “within a range of reasonableness” of the actual value WTHC
would have had as Class A station. Trial Tr. at 433.
Central to Solomon’s trial theory was the argument that the Spectrum Act and the
resulting reallocation of spectrum was an unforeseeable superseding cause of any damages ACI
sustained when WTHC downgraded from UHF Channel 42 to VHF Channel 3, and that
therefore, Solomon could not be liable for these damages. See Jury Instructions at 17, ECF No.
350. ACI countered that the Spectrum Act’s reallocation of spectrum and displacement of LPTV
stations was foreseeable at the time of Solomon’s negligent filing in 1999; indeed, the very
purpose of Congress’s creation of a new Class A status in the Consumer Broadcasters Protection
Act of 1999 (“CBPA”) was to protect LPTV stations from displacement. Mem. at 22–23.
Accordingly, Question 1 of the verdict form asked the jury to determine whether Solomon’s
malpractice had caused any harms “for which . . . each of the following [was] true:
(a) Defendant Henry A. Solomon’s legal malpractice played a substantial and direct
part in bringing about the harm, (b) the harm was a direct result or a reasonably
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probable consequence of Defendant Henry A. Solomon’s legal malpractice, and (c)
if any acts or omissions by a third party caused the harm, a reasonably prudent
person in Defendant Henry A. Solomon’s circumstances would have anticipated
the third party’s acts or omissions and protected against them?
Jury Verdict at 1, ECF No. 356. The jury answered “Yes.” Id. Separately, Question 3 asked the
jury whether the Spectrum Act was a superseding cause of any harms ACI had sustained. Id. at
2. The jury answered “Yes” to this question, as well. Id.
In other words, the jury concluded that ACI suffered at least some form of harm as a
result of Solomon’s malpractice that was not also the result of some unforeseeable, liability-
severing superseding cause. The jury also apparently concluded that ACI suffered some form of
harm that was caused by the Spectrum Act, which was an unforeseeable superseding cause. For
the harms it identified in response to Question 1—those for which no superseding cause cut off
Solomon’s liability—the jury awarded $455,000 in compensatory damages for harm to the value
of the WTHC license and $65,053.40 in compensatory damages for attorney and consultant fees
incurred during ACI’s attempts to remedy Solomon’s malpractice. Id.
Believing the license damages award to be too low, ACI now moves pursuant to Fed. R.
Civ. Pro. 59(a)(1)(A) “for a new trial on the amount of ACI’s damages for the lost value of the
WTHC License.” Pl.’s Mot. New Trial Pursuant to Fed R. Civ. P. 59 at 1, ECF No. 361. Apart
from its complaints about the jury verdict, ACI requests pursuant to Fed. R. Civ. P. 56(d) that the
Court enter judgment in its favor on a separate form in the amount of $28,703. Id. Before trial,
the Court granted partial summary judgment in favor of ACI in this amount, which represented
attorney fees ACI paid to appeal the FCC’s dismissal of the Statement of Eligibility. Order
Granting in Part and Denying in Part Pl.’s Mot. in Limine and Granting Pl.’s Mot. Partial Summ.
J., ECF No. 277; Mem. Op. Granting in Part and Denying in Part Pl.’s Mot. in Limine and
Granting Pl.’s Mot. Partial Summ. J at 13–19, ECF No. 278. The Court denies the motion for a
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new trial but grants the request for entry of judgment on the previous partial summary judgment
award.
II. LEGAL STANDARD
A district court “may . . . grant a new trial on all or some of the issues—and to any
party— . . . after a jury trial, for any reason for which a new trial has heretofore been granted in
an action at law in federal court.” Fed. R. Civ. P. 59(a)(1)(A). This rule commits the decision
whether to order a new trial to the court’s discretion; it generally means that a court “should
grant a new trial if the verdict is against the weight of the evidence, damages are excessive, for
other reasons the trial was not fair, or substantial errors occurred in the admission or rejection of
evidence or the giving or refusal of instructions.” Klayman v. Jud. Watch, Inc., No. CV 06-670,
2019 WL 1244079, at *5 (D.D.C. Mar. 18, 2019) (citation omitted), aff’d, 6 F.4th 1301 (D.C.
Cir. 2021). The court should exercise its discretion to order a new trial “sparingly and
cautiously” because it “should be mindful of the jury’s special function in our legal system and
hesitate to disturb its finding.” Id. (citations omitted). Also guiding the court’s discretion is the
“well-settled principle that Rule 59 is not a vehicle for relitigating old issues, presenting the case
under new theories, securing a rehearing on the merits, or otherwise taking a second bite at the
apple.” Moore v. Hartman, 102 F. Supp. 3d 35, 65 (D.D.C. 2015) (internal quotation marks and
citation omitted). Thus, the court should grant a new trial “only where [it] is convinced the jury
verdict was a seriously erroneous result and where denial of the motion will result in a ‘clear
miscarriage of justice.’” Klayman, 2019 WL 1244079, at *5 (internal quotation marks and
citation omitted) (emphasis in original). All of this means that “[t]he jury verdict stands ‘unless
the evidence and all reasonable inferences that can be drawn therefrom are so one-sided that
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reasonable men and women could not disagree on the verdict.’” Id. (quoting Czekalski v.
LaHood, 589 F.3d 449, 456 (D.C. Cir. 2009)).
III. ANALYSIS
In support of its motion for a new trial on damages related to harms to the WTHC license,
ACI contends that the Spectrum Act could not have been “a superseding cause of any of ACI’s
injuries, either as a matter of fact or law.” Mem. at 2. It further argues that the jury’s $455,000
license-harm damages figure was “not supported by the evidence.” Id. at 25 (cleaned up). The
Court disagrees with ACI’s characterization of the law and facts regarding superseding cause,
and finds that there is sufficient evidentiary support for the license-harm damages award.
Accordingly, the Court denies the motion for a new trial.
To begin, the Court accepts for the purposes of this opinion two premises ACI advances
in support of its new trial motion. First, the Court accepts for the purposes of this opinion ACI’s
framing of its case and how it presented this case to the jury. Specifically, ACI contends “that
there were three (3) separate and distinct [harms to the value of the WTHC license, or “License
Harms”] occurring over a span of twenty years.” Mem. at 3. There was the “2000 License
Harm”: “the loss of the opportunity for Plaintiff to obtain a Class A license for the WTHC
License pursuant to the” CBPA, which occurred when the FCC dismissed the defective
Statement of Eligibility Solomon had negligently filed on ACI’s behalf. Id. Then, there was the
“2015 License Harm,” which occurred when the D.C. Circuit affirmed the FCC’s dismissal of
ACI’s Statement of Eligibility, “thereby making ACI’s lost opportunity to get Class A status
permanent.” Id. at 5. Finally, the “2020 License Harm” took place “when the WTHC License
was displaced from UHF Channel 42 by” T-Mobile and had to settle for the inferior distribution
of VHF Channel 3. Id. at 6.
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The second ACI premise the Court accepts for this opinion is that when the jury found
that the Spectrum Act of 2012 was a superseding cause of certain harm, it could not have been
referring to either the 2000 License Harm or the 2015 License Harm, and must instead have been
referring to the 2020 License Harm. See Mem. at 9. The 2000 License Harm could not have
been caused by the Spectrum Act, which would not pass until 2012. Nor could the Spectrum Act
have caused the 2015 License Harm, because the FCC and D.C. Circuit decisions affirming the
FCC’s rejection of ACI’s faulty statement of eligibility “were not predicated on the Spectrum
Act,” see Mem. at 5; rather, they turned on Solomon’s failure to certify ACI’s compliance with
the eligibility requirements of the 1999 CBPA. Trial Tr. at 4, 85.
Acceptance of these premises leaves two questions for resolution. First, was the jury’s
conclusion that the Spectrum Act was a superseding cause of the 2020 License Harm so
unreasonable that the verdict must be discarded and a new trial held? See Mem. at 16–24.
Second, was the jury’s award of $455,000 as compensation for the 2000 and/or 2015 License
Harms so unreasonable that the verdict must be discarded and a new trial held? The Court
concludes that the answer to both questions is no, and that ACI’s arguments to the contrary are
not persuasive. Accordingly, the Court denies ACI’s motion for a new trial.
A. The Jury’s Conclusion That the Spectrum Act Was a Superseding Cause of the 2020
License Harm Was Not Contrary to Law or Evidence
The argument that the jury reasonably concluded that the Spectrum Act was a
superseding cause of the 2020 License Harm is straightforward. Under District of Columbia law,
“[a] superseding cause is an act of a third person or other force which by its intervention prevents
the actor from being liable for harm to another which his antecedent negligence is a substantial
factor in bringing about.” Butts v. United States, 822 A.2d 407, 418 (D.C. 2003) (cleaned up)
(emphasis and citation omitted). Such a third-party act “breaks the chain of causation if it is not
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reasonably foreseeable.” McKethean v. Washington Metro. Area Transit Auth., 588 A.2d 708,
716 (D.C. 1991).1 “Similarly, there is no proximate causation when the sequence of events
leading to an injury is highly extraordinary in retrospect.” Id. (internal quotation marks and
citation omitted).
There was plenty of record evidence to support the jury’s conclusion that when Solomon
filed the deficient form in 1999, it was not foreseeable that about twelve years later, Congress
would pass the Spectrum Act, thereby setting off a massive reallocation of spectrum via a reverse
auction. For example, the jury heard expert testimony that the Spectrum Act was the result of “a
spectrum crisis in the United States; that there was a desperate need for more spectrum for
wireless and broadband purposes.” Trial Tr. at 580. The Spectrum Act, according to Solomon’s
communications-law expert Jack Goodman, was “an effort to clear spectrum and to take
spectrum that had been allocated to broadcast television and reallocate it to wireless broadband.”
Id. To do this, Congress “chose to create the first-ever incentive option [sic] where the FCC
would offer to purchase spectrum from stations and then repack the remaining stations into a
smaller band and then be able to sell the now-cleared spectrum to wireless and broadband
1
In describing this rule, McKethean referred to intervening third-party acts that were
themselves negligent or criminal, and many District of Columbia superseding cause cases
involve negligent or criminal third-party actions. Of course, the Spectrum Act and resulting
spectrum market disruptions were not negligent or criminal. ACI has not argued, either at trial or
in support of the instant motion, that a liability-severing superseding act must be either negligent
or criminal, and this does not appear to be the rule in the District of Columbia. McKethean
invoked the definition of superseding cause found in § 440 of the Second Restatement of Torts,
588 A.2d at 716 n.1, which does not include any limitation to negligent or criminal intervening
acts, Restatement (Second) of Torts § 440 (1965) (“A superseding cause is an act of a third
person or other force which by its intervention prevents the actor from being liable for harm to
another which his antecedent negligence is a substantial factor in bringing about.”). See also
District of Columbia v. Cassidy, 465 A.2d 395, 399 (D.C. 1983) (holding that a child’s throwing
of a stick during a game was a superseding cause without analyzing whether the child was
negligent or criminal in throwing the stick).
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companies.” Id. at 580–81. Goodman explained that the Spectrum Act “was of great
significance” “[i]n the communications legal community” because it “was the first-ever reverse
auction . . . anywhere in the world” and because “[i]t would have required a significant—
potentially significant reductions in the number of television stations operating in the United
States, because at that time no one knew how much spectrum the FCC would attempt to buy.”
Id. at 581–82. The “first serious discussion” of the concept of holding a reverse auction in order
to “deal with what [was] conceived to be a spectrum crisis” resulting from an increased need for
broadband capacity did not occur until 2010. Id. at 584, 590. Goodman explained that “the
reverse auction that was contemplated in the statute” was not “anything like the FCC had ever
done before.” Id. at 585. Thus, Goodman opined that the idea of the Spectrum Act’s reverse
auction “was not contemplated” “in the period of 1999 to 2000.” Id. at 586. He did not believe
that in 1999, anyone could have predicted all of the ways in which the FCC would implement a
piece of legislation like the Spectrum Act. Id. at 588.
The jury also had access to the 2014 FCC order implementing the Spectrum Act’s reverse
auction, which described the auction as “a new tool authorized by Congress to help the
Commission meet the Nation’s accelerating spectrum needs” and as “a once-in-a-lifetime
opportunity for broadcasters.” Trial Ex. 49D at 3–4. Plus, the jury had the opportunity to review
a 1999 House committee report on the CBPA, which noted that “at th[at] time,” “[w]hether the
FCC would auction frequencies used by LPTV stations [was] unclear.” Trial Ex. 211 at 10. And
it likely was not lost on the jury that the Spectrum Act, prompted by shifting technological
market needs related to wireless broadband, took place some twelve years after Solomon’s
negligent filing. Cf. Nat’l Health Lab’ys, Inc. v. Ahmadi, 596 A.2d 555, 560 n.15 (D.C. 1991)
(noting “that passage of time, with other factors, could have justified, but did not compel, a
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finding of superseding cause”). During the Spectrum Act reverse auction, the spectrum WTHC
used to broadcast from UHF Channel 42 was sold to a wireless provider, who ultimately elected
to displace WTHC from the channel. See Trial Ex. 201 ¶ 72, ECF No. 326-7 at 12; Trial Tr. at
91. It was reasonable for the jury to conclude that the Spectrum Act and the resulting
displacement of WTHC was highly extraordinary in retrospect.
ACI’s arguments to the contrary fail to persuade. First, ACI reviews evidence that tended
to show that it was well known in 1999 that LPTV stations were subject to displacement; the
entire point of Solomon’s failed project of obtaining Class A status for WTHC was to protect it
from displacement. Mem. at 22. In fact, the FCC had reallocated spectrum before 1999 and
expressly foresaw the need to adjust spectrum management policies in light of the growth in
wireless technology, including by exploring the use of two-sided auctions. See id. at 22–24. But
the fact that there was evidence from which the jury might reasonably have concluded that the
Spectrum Act was foreseeable in 1999 does not establish that it was unreasonable for them to
weigh conflicting evidence and conclude that the Spectrum Act was not foreseeable. See
Martinez v. District of Columbia, 503 F. Supp. 2d 353, 357 (D.D.C. 2007) (“Credibility
determinations, the weighing of the evidence, and the drawing of legitimate inferences from the
facts are jury functions, not those of a judge.” (cleaned up) (quoting Reeves v. Sanderson
Plumbing Prods., 530 U.S. 133, 150–51 (2000)).
Indeed, the jury could have credited Goodman’s explanation of why the Spectrum Act
reverse auction was different in kind from previous FCC auction-style spectrum allocation
efforts. See Trial Tr. at 585–87. Goodman also suggested that the reverse auction incentives
facilitated the FCC’s exercise of pre-existing reallocation authority by providing a new means of
avoiding “political upheaval” that may have accompanied reallocation in the absence of these
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incentives. See Trial Tr. at 588. Additionally, Solomon testified that the Spectrum Act process
was “revolutionary’ because it “was not just a reallocation of spectrum. This was something
unprecedented that -- the purpose was to actually clear the spectrum band, not just move
spectrum around, but get television stations, as many as possible, off the air, by hook or by
crook.” Trial Tr. at 289–90. Reinforcing this testimony was an FCC slideshow that explained
that the Spectrum Act presented the FCC with “the unique ability to unlock value for
[b]roadcasters by reorganizing the 600 MHz spectrum band into contiguous blocks on a
nationwide basis and reallocating it for wireless use.” Trial Ex. 49E at 4 (emphasis added). This
record is not an “exceptional” one that permits the Court to depart from the “ordinar[y]” course
of leaving the factual question of the foreseeability of an intervening cause to the jury; it is not
“clear that reasonable people could draw but one conclusion.” See Nat’l Health Lab’ys, Inc., 596
A.2d at 560 (citation omitted and cleaned up).
Second, ACI relies on § 442B of the Second Restatement of Torts and cases from outside
the District of Columbia to argue that because Solomon’s negligent filing may have created the
risk of WTHC being displaced from its channel, and that the general harm of displacement may
have been foreseeable, the Spectrum Act (even if unforeseeable) cannot relieve Solomon of
liability for the 2020 License Harm. Mem. at 18–20. Section 442B states:
Where the negligent conduct of the actor creates or increases the risk of a particular
harm and is a substantial factor in causing that harm, the fact that the harm is
brought about through the intervention of another force does not relieve the actor
of liability, except where the harm is intentionally caused by a third person and is
not within the scope of the risk created by the actor’s conduct.
Restatement (Second) of Torts § 442B (1965). A comment to this section explains that “[i]f the
actor’s conduct has created or increased the risk that a particular harm to the plaintiff will occur,
and has been a substantial factor in causing that harm, it is immaterial to the actor’s liability that
the harm is brought about in a manner which no one in his position could possibly have been
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expected to foresee or anticipate.” Id. cmt. (b). In other words, the § 442B approach holds the
tortfeasor liable for all harms stemming from his negligence so long as the type of harm was
foreseeable, without regard for whether an intervening third-party act that contributed to the
harm was itself foreseeable. Thus, ACI argues that so long as a displacement harm was
foreseeable, Solomon is liable whether or not the Spectrum Act was foreseeable. Mem. at 20.
The problem with ACI’s argument is that no District of Columbia case has endorsed
§ 442B of the Second Restatement. The District of Columbia-law cases ACI cites rely on other
sections of the Second Restatement that discuss intervening and superseding causes and/or
proximate cause generally. Rieser v. District of Columbia, 563 F.2d 462, 479–80 & 480 n.93
(D.C. Cir. 1977) (citing § 441, § 452, and § 442’s general list of “[f]actors for determining
whether an intervening force is a superseding cause”), opinion reinstated in part on reh’g, 580
F.2d 647 (D.C. Cir. 1978); Butts, 822 A.2d at 418 (citing § 440 and citing § 441); McKethean,
588 A.2d at 716 n.9 (citing § 440); District of Columbia v. Frick, 291 A.2d 83, 84 (D.C. 1972)
(citing §§ 430–32); see also Beattie v. United States, 756 F.2d 91, 136, 138 (D.C. Cir. 1984)
(Wald, J., concurring) (citing § 442B for the uncontroversial proposition that “[a]s a general
matter in tort law, the intervening intentional or criminal acts of third parties will break the chain
of causation” and the non-applicable proposition that “[u]nder traditional proximate cause
doctrine, any substantial factor in causing the harm is a proximate cause to which liability
attaches, not just the last proximate act which could have prevented the harm” (emphasis in
original) abrogated on other grounds by Smith v. United States, 507 U.S. 197 (1993). What’s
more, District of Columbia law superseding cause cases routinely depart from the § 442B
approach of focusing on the risk and foreseeability of the sort of harm the plaintiff suffered, and
instead analyze whether the intervening third-party action or force that brought about the harm
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was foreseeable.2 Romero v. National Rifle Ass’n of America, Inc., 749 F.2d 77, 79–81 (D.C.
Cir. 1984) (“In the District of Columbia, a defendant can be held liable for damages resulting
from intervening acts of third parties if the danger of an intervening negligent or criminal act
should have reasonably been anticipated and protected against” (cleaned up)); District of
Columbia v. Carlson, 793 A.2d 1285, 1290 n.5 (D.C. 2002) (plaintiff “was required to show”
that a third party’s “particular conduct” was foreseeable in order for the defendant to be held
liable); White v. United States, 780 F.2d 97, 107 (D.C. Cir. 1986); de Los Rios v. NationsBank,
N.A., 911 F. Supp. 8, 11 (D.D.C. 1995); McKethean, 588 A.2d at 716; Morgan v. District of
Columbia, 468 A.2d 1306, 1318 (D.C. 1983); Lacy v. District of Columbia, 424 A.2d 317, 323
(D.C. 1980); Convit v. Wilson, 980 A.2d 1104, 1127 (D.C. 2009); District of Columbia v. Doe,
524 A.2d 30, 32–33 (D.C. 1987); Marsh v. Barry, 824 F.2d 1139, 1144 (D.C. Cir. 1987); District
of Columbia v. Cassidy, 465 A.2d 395, 398–99 (D.C. 1983).
Thus, under District of Columbia law, the superseding cause question is not whether the
type of harm, here displacement, was foreseeable. Instead, the question is whether something
like the third-party act that caused the defendant’s negligence to ripen into a particular
2
Many of these cases involve criminal intervening third-party actions, and so apply a
heightened foreseeability standard compared to non-criminal third-party actions: “When an
intervening act is criminal, this court demands a more heightened showing of foreseeability than
if it were merely negligent . . . . The defendant will be liable only if the criminal act is so
foreseeable that a duty arises to guard against it.” District of Columbia v. Carlson, 793 A.2d
1285, 1290 (D.C. 2002) (quoting McKethean, 588 A.2d at 716–717 (omission in original)).
Though the Spectrum Act was not criminal and this heightened standard does not apply, these
cases remain relevant to the extent they demonstrate that the object of the foreseeability inquiry
is the third-party act, not the type of harm the plaintiff suffers. See, e.g., id. (“We hold that even
though [third party] Mr. Poe’s actions violated a criminal statute, [the plaintiff] met his
heightened burden of showing that Mr. Poe’s actions were foreseeable in light of the District’s
negligence” (emphasis added)). The only difference between these cases and the instant case is
the difference in the degree of foreseeability that must obtain for a defendant to be liable despite
an intervening cause.
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displacement harm, here Congress’s passage of the Spectrum Act and the resulting mass
reallocation of spectrum and 2020 License Harm, was foreseeable. See Carlson, 793 A.2d at1290 n.5 (D.C. 2002). As the Court has explained, the trial record contained evidence from
which the jury reasonably concluded that it was not.
Third, ACI argues that, “as a matter of law,” the Spectrum Act could not have been
unforeseeable because “[a]ny company doing business in a highly regulated industry is always
subject to the foreseeable possibility the rules will change.” Mem. at 21–22. But the cases ACI
marshals in support do not address foreseeability in the context of tort liability; rather they
involve constitutional and promissory estoppel arguments related to regulatory changes affecting
various interests. Id. (citing Fed. Hous. Admin. v. Darlington, Inc., 358 U.S. 84, 91–92 (1958);
Multi-State Commc’ns, Inc. v. FCC, 728 F.2d 1519, 1525–26 (D.C. Cir. 1984); American
Express Travel Related Servs., Inc. v. Sidamon–Eristoff, 669 F.3d 359, 369 (3rd Cir. 2012);
Opdyke Inv. Co. v. City of Detroit, 883 F.2d 1265, 1275 (6th Cir. 1989); Morris v. Runyon, 870
F. Supp. 362, 375 (D.D.C. 1994); McAndrews v. Fleet Bank of Massachusetts, N.A., 989 F.2d 13,
19 (1st Cir. 1993)). And in any event, Solomon’s superseding cause theory does not argue that
the Spectrum Act changed the regulatory status of WTHC as an LPTV license in an
unpredictable way—as ACI goes to great lengths to point out, the Spectrum Act did not change
WTHC’s regulatory status. Mem. at 12–16. Rather, Solomon argued to the jury that the
Spectrum Act created the incentive-auction conditions necessary to facilitate a large-scale
reallocation of spectrum from broadcast to broadband use, which in turn caused WTHC to be
displaced. See, e.g., Trial Tr. at 588; Trial Ex. 49D at 3–4; Def.’s Opp’n Pl.’s Mot. New Trial at
12 (“Opp’n”), ECF No. 362.
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ACI’s final set of arguments against the jury’s superseding cause conclusion shifts the
focus from the foreseeability question to a mistaken legal premise regarding the distinct
requirement that a superseding cause be “independent.” ACI says that “[i]n the District of
Columbia, an act that was highly extraordinary in retrospect excuses the original tortfeasor from
liability only if that highly extraordinary act was, by itself and standing alone, an independent
cause of the injury.” Mem. at 11. It is true that to be a superseding cause, a third-party act must
be “independent” in the sense of being “disconnected from the negligence” of the original
tortfeasor defendant. Smith v. Hope Vill., Inc., 481 F. Supp. 2d 172, 204 (D.D.C. 2007) (citation
omitted). Plainly, the Spectrum Act was independent in this sense: Solomon’s negligent filing
did not cause Congress to conceive of and pass the Spectrum Act to authorize the reverse
auction. But there is no support for ACI’s leap to the conclusion that a superseding cause must
be “independent” in the additional sense of being “the sole cause” of the injury “by itself and
standing alone.” Mem. at 11; Pl.’s Reply Mem. Supp. Mot. Fed. R. Civ. P. 59 at 2, 10 n.14
(“Reply”), ECF No. 366. Such a rule would make little sense; the very concept of superseding
cause assumes that an injury can be caused both by a tortfeasor’s negligence and by a subsequent
third-party act. See, e.g., Butts, 822 A.2d at 418 (“A superseding cause is an act of a third person
or other force which by its intervention prevents the actor from being liable for harm to another
which his antecedent negligence is a substantial factor in bringing about” (cleaned up) (emphasis
and citation omitted)).
Thus, even if they are correct, ACI’s assertions that the Spectrum Act did not grant the
FCC any new displacement authority with respect to LPTV stations like WTHC are irrelevant to
whether the Spectrum Act was a superseding cause of the 2020 License Harm. Specifically, ACI
says that non-Class A LPTV stations were not eligible to participate in the reverse auction, that
15
the FCC had the authority to remove LPTV stations from their channels and reassign these
channels under 47 U.S.C. § 303(y) both before and after the Spectrum Act; that the Spectrum
Act did not grant the FCC any new authority to displace FCC licenses or to auction channels
occupied by LPTV stations to other users such as broadband providers; and that the Spectrum
Act did not authorize the FCC to pay LPTV stations to voluntarily relinquish their channels.
Mem. at 12–16.
These arguments miss the point: Whether or not the Spectrum Act granted the FCC new
authority to reassign WTHC’s spectrum, the Act at the very least prompted the FCC to do so.
The parties stipulated, and shared with the jury, that “the FCC enacted rules directed by the
Spectrum Act” that provided for the surrender of UHF Channels 38 to 51 by television
broadcasters. Trial Ex. 201 ¶ 64, 72. The jury also reviewed the FCC’s Spectrum Act
implementation order, in which the FCC explained that the Spectrum Act required it to make
spectrum available to sell to wireless providers in the auction and that it would use “its
longstanding spectrum management authority . . . as well as the specific grant of authority in the
Spectrum Act” to carry out this reallocation. Ex. 49D at 52. Thus, the Spectrum Act kicked off
the mass reallocation of UHF spectrum that required WTHC’s displacement. See Trial Tr. at 91–
92 (ACI co-owner Jud Colley testifying that “during the course of the spectrum auction,”
WTHC’s UHF Channel 42 spectrum was sold to T-Mobile, who eventually exercised its option
to require WTHC to vacate the channel).3 The FCC may have already had the authority to
3
ACI seems to admit that the Spectrum Act “played a concurrent role in the creation and
sale” to T-Mobile of the spectrum block that covered the spectrum WTHC had used when
packaged as UHF Channel 42. Reply at 6. This sale meant WTHC had to move, which the FCC
accomplished by means of an exercise of its pre-Spectrum Act 47 U.S.C. § 303(y) authority.
Reply at 6–7. This account does not dispute the key point: that the Spectrum Act prompted the
sale of the spectrum WTHC was using, which, in turn, prompted the displacement of WTHC
from that spectrum. Or, in ACI’s words, “pre-Spectrum Act law was applied in conjunction with
16
displace WTHC, but the jury could reasonably have concluded that the Spectrum Act caused the
FCC to exercise this authority and/or to do so in a way it otherwise may not have.
To put all of this another way, ACI stresses that its communications-law expert “testified
that long before the Spectrum Act was adopted, LPTV was a secondary user of spectrum and
could be displaced by the FCC in the reallocation of spectrum from broadcast television to
wireless broadband providers.” Reply at 4. Fair enough. But the jury reasonably could have
concluded that the Spectrum Act, by triggering a mass reallocation of spectrum and a resulting
need for mass displacement, made it so that WTHC would be displaced. Thus, it was reasonable
for the jury to conclude that the Spectrum Act was “independent” of Solomon’s negligence and
substantially contributed to WTHC’s displacement injury. The jury was not required to go
further and conclude that the Spectrum Act was the sole cause of this injury in order to decide
that the Act was a superseding cause.
B. Trial Evidence Supports the Jury’s License-Harm Damages Award
Accepting ACI’s characterization of how the case was presented to the jury but rejecting
ACI’s arguments that the Spectrum Act could not have been a superseding cause of the 2020
License Harm leaves the Court to conclude that the jury’s award of $455,000 in compensatory
damages for “harm(s) to the value of the WTHC license,” Jury Verdict at 2, sought to
compensate ACI for the 2000 and/or 2015 License Harms (which could not have been caused by
the Spectrum Act). ACI claims that the jury’s award “is not supported by any evidence and must
be vacated.” Mem. at 26. To the contrary, a review of the record reveals that the jury’s award
finds support in the evidence, which means that the Court may not order a new trial on the
the Spectrum Act to effectuate the transfer of UHF Channel 42 in Atlanta from ACI to a wireless
broadband provider.” Id. at 7 n.9 (emphasis added).
17
ground of inadequate damages. Anchor v. O’Toole, 94 F.3d 1014, 1021 (6th Cir. 1996) (“The
remedy of a new trial for inadequate damages is appropriate only where the evidence indicates
that the jury awarded damages in an amount substantially less than unquestionably proved by the
plaintiff’s uncontradicted and undisputed evidence. Thus, if the verdict is supported by some
competent, credible evidence, a trial court will be deemed not to have abused its discretion in
denying the motion.” (emphasis in original)); Mem. at 25 (ACI quoting this standard).
“The 2000 License Harm was the loss of the opportunity for Plaintiff to obtain a Class A
license for the WTHC License.” Mem. at 3. The purpose of Class A status would have been to
protect WTHC from displacement. See Trial Ex. 201 ¶¶ 6, 18, 68, 71. The 2015 License harm
occurred when the loss of opportunity to obtain Class A status became permanent because ACI
had exhausted all avenues for review of the FCC’s dismissal of its Statement of Eligibility; this
solidified the risk of displacement. See Mem. at 5. Thus, in assessing damages for the 2000
and/or 2015 License Harms, the jury was tasked with determining the difference between “what
ACI would have had if not for the harm Mr. Solomon caused”—a Class A license protected from
displacement—and “what ACI had immediately after sustaining the harm”—an LPTV license
that had permanently lost the chance to receive Class A status and therefore was subject to
displacement risk. Jury Instructions at 22.4
There was evidence that the first figure, WTHC’s value as a Class A, was $900,000. In
the course of explaining his disagreement with ACI’s expert Stephan Sloan’s much higher
valuation of WTHC as a Class A, Solomon’s damages expert John Sanders related that he had
made adjustments to Sloan’s calculations that “brought the value down to the $900,000 range,”
4
ACI does not argue that the Court incorrectly instructed the jury on this (or any other)
point.
18
which he said was “within a range of reasonableness.” Trial Tr. at 432–33. Sloan testified that
WTHC would have been worth as much as $6.5 million as a Class A, but it was up to the jury to
resolve this dispute between witnesses. Martinez, 503 F. Supp. 2d at 357.
How, then, to determine the second figure, the value of WTHC as a non-Class A LPTV
license facing a risk of displacement? ACI’s counsel, co-owner, and communications-law expert
each told the jury that the difference between a Class A license and an LPTV license was the risk
of displacement inherent in LPTV status but absent with Class A status. See Trial Tr. at 5, 16,
23, 36–37, 42–43, 228. In other words, it was reasonable to conclude that all else being equal, an
LPTV license and a Class A license are equivalent in value but for the risk of displacement
associated with a non-Class A LPTV license’s secondary status. And the CBPA committee
report told the jury that the risk that an LPTV station would be displaced due to an FCC
reallocation auction was 50 percent. Trial Ex. 211 at 10 (reporting the Congressional Budget
Office’s estimate “that there is a 50 percent chance that the FCC will auction channels used by
secondary licensees under current law”). Further, though there was conflicting evidence on this
point, the jury heard testimony that an LPTV license that had been displaced was worth nothing.
Compare Mem. at 6 (ACI co-owner “Mr. Colley testified the value of the WTHC License in
2017 without a Class A License was zero.” (citing Trial Tr. at 419)), with Trial Tr. at 178–89
(ACI’s expert testifying that the value of WTHC as an LPTV license displaced to a VHF station
was about $200,000). Thus, the jury reasonably could have determined that the value of WTHC
as an LPTV subject to a 50 percent risk of displacement was equivalent to the value of WTHC as
a Class A subject to a 50 percent chance of being displaced and therefore worth zero: ($900,000
times 50 percent) plus (zero times 50 percent), or $450,000. The difference between what ACI
would have had absent the negligence (a $900,000 Class A) and what ACI had after the
19
negligence (an LPTV worth $450,000) was $450,000. Or put another way, as a result of
Solomon’s malpractice ACI had a license that was worth $900,000 when broadcasting on a UHF
channel but this value was discounted by the 50 percent chance that the license would be
displaced from this channel and worth zero dollars: $450,000. Quite close to the jury’s $455,000
award. To be sure, this potential jury method did not result in exactly $455,000, and may not
have followed scientific accounting and valuation standards in accounting for the 50 percent
displacement risk. The $5,000 discrepancy sought, perhaps, to account for the fact that WTHC
had by 2015 made it over fifteen years without being displaced; the jury may have thought that
the Congressional Budget Office had overestimated the risk of displacement when it published
the 50 percent figure in 1999. In any event, the evidence demonstrates that the jury’s $455,000
award was “within a reasonable range,” which precludes the Court from disturbing it. Cf. Carter
v. Duncan-Huggins, Ltd., 727 F.2d 1225, 1238–39 (D.C. Cir. 1984) (“In reviewing the actual
amount of a jury’s award, our task is limited and a reluctance to interfere is our touchstone. This
limited role reflects the obvious fact that we are not privy to the jury’s deliberations. In
reviewing the amount of the jury’s award, we thus need not—and indeed cannot—reconstruct the
precise mathematical formula that the jury adopted. Nor need we explore every possible
quantitative analysis or compute the basis of each penny and dollar in the award. Our inquiry
ends once we are satisfied that the award is within a reasonable range and that the jury did not
engage in speculation or other improper activity.”).5
5
ACI also collects evidence from which the jury might have reached $455,000 in
damages by gleaning the difference between the value of an LPTV station serving the 5.5 million
population reach of UHF Channel 42 and an LPTV station serving the 2 million population reach
of VHF Channel 3—in other words, the loss associated with the 2020 License Harm
displacement. Mem. at 27. ACI takes issue with this approach because it did not “attribute[] any
value to a Class A license” or “to its lost class A status.” Id.; Reply at 12 n.15. But as the Court
has explained, the difference between a Class A and an LPTV is displacement protection—the
20
In its reply brief, for the first time, ACI argues that Solomon’s expert’s $900,000 estimate
“was admitted in error.” Reply at 12. ACI’s complaint is that Sanders reached the $900,000 not
after conducting a valuation of his own, but rather in the course of critiquing Sloan’s discounted
cash-flow valuation method, a method Sloan did not present at trial (Sloan relied on other
valuation methods at trial). Id. at 13. ACI raised the same objection at trial, but the Court
overruled it after confirming that Sanders had presented the $900,000 estimate in his pre-trial
report. Trial Tr. at 433. Even though Sanders was tasked with critiquing Sloan’s valuations
rather than conducting an “official appraisal” or valuation opinion of his own, in the course of
this task he effectively conducted his own valuation based on his own calculations explained in
his pre-trial report, and presented the results to the jury. See id. at 434, 437, 532.
ACI now argues that the Court’s ruling was inconsistent with a later ruling that barred
Sanders from testifying about the feasibility of WTHC generating income from a subchannel
leasing model on the ground that this information was relevant only to Sloan’s discounted cash-
flow method, which was “no longer in the case.” Trial Tr. at 443–44; Reply at 13. But these
rulings were not in conflict: the value of WTHC as a Class A was a central issue in the case, so
Sanders’s estimate of that value had relevance and probative value far beyond its utility in
consequence of “lost Class A status” was displacement—so the jury could have concluded that
for all other purposes, a non-displaced LPTV and a Class A reaching 5.5 million people would
be equivalent in value. Of course, for the jury to have calculated damages in this way, it would
have to have concluded that the Spectrum Act was a superseding cause not of the 2020
displacement but of something else. Perhaps, for example, the jury concluded that the Spectrum
Act as a superseding cause of the speculative increase in the option-market value of Class A
stations in the run-up to the reverse auction, which may have impacted some of Sloan’s Class A
valuations. See Mem. at 25. Because ACI does not frame its motion to suggest that the jury
could have found the Spectrum Act to be a superseding cause of anything other than the 2000
License Harm, the 2015 License Harm, or the 2020 License Harm, and because there is ample
evidence to support a jury conclusion that the Spectrum Act was a superseding cause of the 2020
License Harm, the Court does not ground its denial of ACI’s motion on this potential avenue of
jury calculation.
21
critiquing the obsolete discounted cash-flow method. See Fed. R. Evid. 401, 402, 403. The
subchannel characteristics of the Atlanta market did not. Therefore, Sanders’s $900,000 estimate
was properly admitted and was a permissible basis for the jury’s damages award.
C. The Court Grants ACI’s Uncontested Request for Entry of Judgment to Effect the
Court’s Previous Partial Summary Judgment Order
In addition to requesting a new trial on license harm damages, ACI moves under Fed. R.
Civ. P. 56(d) for the entry of judgment via a separate document in the amount of $28,703, which
represents damages in the form of attorney fees ACI paid to appeal the FCC’s dismissal of the
Statement of Eligibility. Pl.’s Mot. New Trial Pursuant to Fed R. Civ. P. 59. The Court
previously granted partial summary judgment in favor of ACI in this amount (the jury
subsequently awarded ACI $65,053.40 in additional attorney and lobbying fees incurred in the
effort to reverse the FCC’s dismissal of the statement of eligibility). Order Granting in Part and
Denying in Part Pl.’s Mot. in Limine and Granting Pl.’s Mot. Partial Summ. J., Mem. Op.
Granting in Part and Denying in Part Pl.’s Mot. in Limine and Granting Pl.’s Mot. Partial Summ.
J., ECF No. 277; ECF No. 278 at 13–19; Jury Verdict at 2. Solomon does not object to the entry
of such a judgment. See Opp’n at 14 n.3. Accordingly, the Court grants this motion.
IV. CONCLUSION
For the foregoing reasons, ACI’s Motion for a New Trial Pursuant to Fed. R. Civ. P. 59
(ECF No. 361) is DENIED. ACI’s Motion for the Entry of Judgment by a Separate Document
in the amount of $28,703 is GRANTED. An order consistent with this Memorandum Opinion is
separately and contemporaneously issued.
Dated: 09/01/2022 RUDOLPH CONTRERAS
United States District Judge
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