Centurylink, Inc. v. Dish Network, L.L.C.

13-123
CenturyLink v. Dish Network
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated Term of the United States Court of Appeals for the Second Circuit, held at the
Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York on the
7th day of February, two thousand fourteen.
Present: ROSEMARY S. POOLER,
GERARD E. LYNCH,
RAYMOND J. LOHIER, JR.,
Circuit Judges.
_____________________________________________________
CENTURYLINK, INC.
Appellee,
-v- 13-123-cv
DISH NETWORK, L.L.C.,1
Appellant.
_____________________________________________________
Appearing for Appellant: Robert M. Loeb, Orrick, Herrington & Sutcliffe LLP, Washington,
D.C., (Rachel Wainer Apter, E. Joshua Rosenkraz, New York,
N.Y.; John Michael Agnello, Melissa Ellen Flax, Carella, Byrne,
Cecchi, Olstein, Brody & Agnello, Roseland, N.J., on the brief).
Appearing for Appellee: Douglas P. Lobel, Cooley LLP, Reston, VA.
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The Clerk of the Court is directed to amend the caption as shown above.
Appeal from the United States District Court for the Southern District of New York
(Baer, J.).
ON CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the orders of said District Court be and they hereby are AFFIRMED in
part and VACATED and REMANDED in part.
DISH Network, L.L.C. appeals from the July 31, 2012 and December 12, 2012 opinions
and orders of the United States District Court for the Southern District of New York (Baer, J.)
granting CenturyLink, Inc.’s motion for judgment on the pleadings and prohibiting DISH from
unilaterally modifying the duration of certain payments due to CenturyLink, respectively. We
assume the parties’ familiarity with the underlying facts, procedural history, and specification of
issues for review.
We affirm the July 31, 2012 opinion and order for the reasons set forth in the district
court’s thorough opinion. “Under New York law, which the parties agree governs their contract
dispute, the question of whether a written contract is ambiguous is a question of law for the
court.” JA Apparel Corp. v. Abboud, 568 F.3d 390, 396 (2d Cir. 2009). To be unambiguous, the
contract terms must have “a definite and precise meaning, unattended by danger of
misconception in the purport of the [contract] itself, and concerning which there is no reasonable
basis for a difference of opinion.” Id. (quoting Breed v. Ins. Co. of N. Am., 46 N.Y.2d 351, 355
(1978)). “A written agreement that is clear, complete and subject to only one reasonable
interpretation must be enforced according to the plain meaning of the language chosen by the
contracting parties.” Brad H. v. City of New York, 17 N.Y.3d 180, 185 (2011). “Ambiguity is
present if language was written so imperfectly that it is susceptible to more than one reasonable
interpretation.” Id. at 186.
However, we disagree with the district court’s conclusion that the agreement between the
parties was unambiguous regarding DISH’s ability to unilaterally limit the monthly incentive
payments to 60 months by invoking the language of Schedule 9.8.1. The relevant provision in
Schedule 9.8.1 states that “[DISH] reserves the right, in its sole discretion, to extend and/or
modify these standards from time to time, provided that [DISH] will use the same standards that
it uses for retailers, generally.” Schedule 9.8.1 appears to grant DISH great discretion, subject
to two restraints: (1) any modifications made must be consistent with the standards applicable to
other retailers; and (2) Section 12.1(i) of the agreement permits CenturyLink to terminate the
agreement should DISH exercise its discretion in such a way as to work “a materially adverse
change” to CenturtyLink’s “reasonably anticipated economic benefits.” While the first restraint
appears to apply unambiguously post-termination, the second appears inapplicable once the
agreement is terminated. It cannot be said, from a plain reading of the language in both
provisions, whether the parties intended that DISH be able to invoke Schedule 9.8.1 post-
termination to impose a 60-month cap. In this regard, we find the contract sufficiently
ambiguous on its face to survive judgment on the pleadings. In addition, any argument that the
change made by DISH worked such a severe economic hardship on CenturyLink that the change
rises to the level of a breach of the covenant of good faith and fair dealing raises questions of
fact that would require a trial.
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Accordingly, the orders of the district court hereby are AFFIRMED in part, and
VACATED and REMANDED in part for further proceedings consistent with this order.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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