Viamedia, Inc. v. Comcast Corporation et al

Northern District of Illinois, ilnd-1:2016-cv-05486

MEMORANDUM by Comcast Corporation, Comcast Spotlight, Inc. in support of motion to dismiss {{45}} the Refusal to Deal Claims as Restated in the Amended Complaint

Interested in this case?

Current View

Full Text

Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 1 of 18 PageID #:323 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION) VIAMEDIA, INC.,))) No. 16 C 5486 Plaintiff,)) Honorable Amy J. St. Eve v.)) COMCAST CORPORATION, and) COMCAST SPOTLIGHT, LP,)) Defendants.)) MEMORANDUM OF LAW IN SUPPORT OF DEFENDANTS' MOTION TO DISMISS THE REFUSAL TO DEAL CLAIMS AS RESTATED IN THE AMENDED COMPLAINT Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 2 of 18 PageID #:323 TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES .................................................................................. ii INTRODUCTION ...................................................................................................1 THE COURT'S DECISION ....................................................................................2 ARGUMENT ...........................................................................................................4 A. Viamedia's Legal Arguments Lack Merit and Are Procedurally Improper..............................................5 B. Viamedia's Remaining "New" Allegations Add Nothing ...............8 C. Viamedia's Allegations of Refusals to Deal Outside of Chicago and Detroit Add Nothing and, in Any Event, Lack Merit ...............................................................................................12 CONCLUSION ......................................................................................................14 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 3 of 18 PageID #:323 TABLE OF AUTHORITIES CASES PAGE(S) Ball Mem'l Hosp. v. Mut. Hosp. Ins. 784 F.2d 1325 (7th Cir. 1986) .......................................................................................6 Chic. Prof'l Sports Ltd. P'ship v. NBA, 95 F.3d 593 (7th Cir. 1996) ...........................................................................................6 Christy Sports, LLC v. Deer Valley Resort Co., 555 F.3d 1188 (10th Cir. 2009) ...................................................................................11 Duty Free Ams., Inc. v. Estee Lauder Cos., 797 F.3d 1248 (11th Cir. 2015) ...................................................................................13 In re Elevator Antitrust Litig., 502 F.3d 47 (2d Cir. 2007) (per curiam) ......................................................................13 Goldwasser v. Ameritech Corp., 222 F.3d 390 (7th Cir. 2000) .........................................................................................4 Gonzalez v. City of Elgin, 2007 WL 4246899 (N.D. Ill. Nov. 28, 2007) ................................................................8 LiveUniverse, Inc. v. MySpace, Inc., 304 F. App'x 554 (9th Cir. 2008) ................................................................................13 Novell, Inc. v. Microsoft Corp., 731 F.3d 1064 (10th Cir. 2013) ...........................................................................3, 4, 13 Olympia Equip. Leasing Co. v. W. Union Tel. Co., 797 F.2d 370 (7th Cir. 1986) .......................................................................................11 Port Dock & Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117 (2d Cir. 2007)...........................................................................................4 Schor v. Abbott Labs., 457 F.3d 608 (7th Cir. 2006) .........................................................................................2 VBR Tours, LLC v. Nat'l R.R. Passenger Corp., 2015 WL 5693735 (N.D. Ill. Sept. 28, 2015) ................................................................3 Vendetti v. Compass Envtl., Inc., 2006 WL 8199711 (ND. Ill. Oct. 25, 2006 ..................................................................14 Verizon Commc'ns, Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004) ............................................................................................. passim ii Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 4 of 18 PageID #:323 Vesely v. Armslist LLC, 762 F.3d 661 (7th Cir. 2014) .........................................................................................7 Viamedia, Inc. v. Comcast Corp., __ F. Supp. 3d __, 2016 WL 6568074 (N.D. Ill. Nov. 4, 2016) .......................... passim Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082 (7th Cir. 2016) .......................................................................................7 Zurich Capital Mkts., Inc. v. Coglianese, 383 F. Supp. 2d 1041 (N.D. Ill. 2005) ...........................................................................8 OTHER AUTHORITIES 2 Moore's Federal Practice (3d ed. 2016) ..........................................................................14 Richard A. Posner, Antitrust Law (2d ed. 2001) ..................................................................6 iii Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 5 of 18 PageID #:323 Defendants Comcast Corporation and Comcast Cable Communications Management, LLC (successor to Comcast Spotlight, LP; together with Comcast Corporation, "Comcast") respectfully submit this memorandum in support of their motion to dismiss with prejudice Counts I-V of Plaintiff Viamedia, Inc.'s ("Viamedia") amended complaint ("Amended Complaint" or "Am. Compl.") to the extent the monopolization claims asserted in those counts are based on an alleged refusal to deal. INTRODUCTION In dismissing Viamedia's unilateral refusal to deal claims, this Court relied on binding Supreme Court precedent holding that antitrust liability for such conduct is strongly disfavored as administratively unworkable and contrary to the basic objective of the antitrust laws—which is to promote competition, rather than cooperation, among rivals. See Viamedia, Inc. v. Comcast Corp., __ F. Supp. 3d __, 2016 WL 6568074, at *15-16 (N.D. Ill. Nov. 4, 2016). The Court also relied upon the principle that Comcast's replacement of an intermediary like Viamedia with a direct relationship was a "prototypical valid business purpose." Id. at *16. Viamedia has now filed an Amended Complaint in a futile effort to revive its refusal to deal claims. In its Amended Complaint, Viamedia adds fifteen paragraphs (¶¶ 154-168), but does not otherwise alter its original complaint. Several of the additional "facts" pleaded in the Amended Complaint are actually legal arguments. See, e.g., Am. Compl. ¶¶ 165-167. Those new legal arguments not only lack merit, but they are also procedurally improper because Viamedia could have advanced them, but did not, in opposition to Comcast's motion to dismiss the original complaint. The remaining "new" factual allegations simply add legally immaterial details to Viamedia's original Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 6 of 18 PageID #:323 allegations. Thus, the Amended Complaint effectively asks the Court to reconsider its dismissal of Viamedia's refusal to deal claims. But nothing in the Amended Complaint should cause the Court to do so. Instead, the Court should again dismiss Viamedia's refusal to deal claims—this time with prejudice. Conspicuously absent from the additional allegations are any facts showing that Comcast's refusal to deal with Viamedia "has no rational procompetitive purpose," which Viamedia must allege to state a claim. Viamedia, 2016 WL 6568074, at *16. Nor does the Amended Complaint allege any facts showing that Comcast does not benefit by dealing directly with MVPDs rather than indirectly through Viamedia. Indeed, in a concession that defeats Viamedia's attempt to restate a refusal to deal claim, the Amended Complaint admits that efficiencies may be "realized by consolidating management of an Interconnect with Comcast's provision of Spot Cable Advertising Representation services." Am. Compl. ¶ 166. THE COURT'S DECISION In analyzing Viamedia's original refusal to deal allegations, the Court was guided by Supreme Court precedent "enumerat[ing] three reasons why refusals to deal are generally not actionable": First, "[c]ompelling such firms to share the source of their advantage is in some tension with the underlying purpose of antitrust law, since it may lessen the incentive for the monopolist, the rival, or both to invest in those economically beneficial facilities." [Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407-08 (2004)]. Second, "[e]nforced sharing. . . requires antitrust courts to act as central planners, identifying the proper price, quantity, and other terms of dealing—a role for which they are ill suited." Id. at 408. Finally, "compelling negotiation between competitors may facilitate the supreme evil of antitrust: collusion." Id.; see also Schor [v. Abbott Laboratories, 457 F.3d 608, 610 (7th Cir. 2006)] ("[A]ntitrust law does not require monopolists to cooperate with rivals by selling them products that would help the rivals to 2 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 7 of 18 PageID #:323 compete. Cooperation is a problem in antitrust, not one of its obligations." (emphasis in original) (citation omitted)). Viamedia, 2016 WL 6568074, at *15. There was no dispute over this governing Supreme Court and Seventh Circuit authority; instead Viamedia argued that this case falls within an exception under the Supreme Court's decision in Aspen Skiing. But this Court explained that the "narrow" exception under Aspen Skiing applies only when the defendant's unilateral decision to cease participation in a presumably profitable course of dealing was irrational but for its anticompetitive effect. See id. at *16. In applying governing precedent to Viamedia's refusal to deal allegations, the Court accepted all well-pleaded facts as true and drew all reasonable inferences in Viamedia's favor. See Viamedia, 2016 WL 6568074, at *6. The Court agreed with Comcast that Viamedia had "failed to plead facts showing that Defendants' decision was irrational but for its anticompetitive effects because replacing an intermediary with a direct relationship is a prototypical valid business purpose." Id. at *16 (citations and quotations omitted). The Court reasoned: Viamedia has not alleged or explained how Defendants' refusal to deal with it—separate from Defendants' other conduct like conditioning MVPDs' access to Interconnects on accepting Comcast Spotlight's services even for advertising sales that do not involve an Interconnect— has no rational procompetitive purpose. See VBR Tours, [LLC v. Nat'l R.R. Passenger Corp.], 2015 WL 5693735, at *9 [(N.D. Ill. Sept. 28, 2015)] ("[T]he question is not whether [the defendant] chose the most competitive offer but whether it had any procompetitive purpose." (emphasis in original)); see also Novell, [Inc. v. Microsoft Corp., 731 F.3d 1064, 1075-77 (10th Cir. 2013)]. Before Comcast's refusal to deal, MVPDs gave Viamedia control of their Spot Cable Avails and then Viamedia gave control over a portion of those Avails to the Interconnect. After Comcast's refusal to deal, for the portion of Avails sold through an Interconnect, MVPDs simply deal with Comcast directly. Consequently, at least with respect to the portion of advertising sales made through Interconnects, Defendants' refusing to deal with Viamedia offers potentially improved efficiency. Given the Supreme Court's hesitancy to force "firms to share the source of their advantage," Trinko, 540 U.S. at 3 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 8 of 18 PageID #:323 407–08, the administrability problems associated with forcing a company to deal with its rival, see Novell, 731 F.3d at 1073 (citing Trinko, 540 U.S. 407–08), and the principle that replacing intermediaries is a "prototypical valid business purpose," Port Dock [& Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117, 124 (2d Cir. 2007)], Viamedia's current allegations of an illegal refusal to deal cannot proceed. Id. (citations omitted); see also, e.g., Goldwasser v. Ameritech Corp., 222 F.3d 390, 398 (7th Cir. 2000) ("Monopolists are just as entitled as other firms to choose efficient methods of doing business. . . ."). ARGUMENT Viamedia's Amended Complaint amounts to nothing more than a motion for reconsideration in the guise of an amended pleading. The new allegations (in paragraphs 154-168) fall into two categories, neither of which provides a basis for the Court to reverse its prior decision. First, several of the new "allegations" are legal arguments that the Court already has rejected based on the alleged facts, or that otherwise are devoid of merit. To the extent they are new legal arguments, Viamedia could have advanced them, but did not, in opposition to Comcast's motion to dismiss the original complaint. Second, other "new" factual allegations add verbiage and redundant details to allegations that were made in the original complaint, but do not add any facts of legal import.1 None of the new allegations comes close to addressing the fundamental flaws identified in the Court's decision. Accordingly, for the reasons set forth in the Court's original decision dismissing the refusal to deal claims and set forth herein, the Court should again dismiss those claims, this time with prejudice. 1 Exhibit A to this memorandum maps each of Viamedia's new allegations to its original allegations, showing that no material allegations of fact were added. 4 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 9 of 18 PageID #:323 A. Viamedia's Legal Arguments Lack Merit and Are Procedurally Improper In granting the initial motion to dismiss, the Court cited three key factors supporting dismissal: (1) "the Supreme Court's hesitancy to force firms to share their advantage" with competitors, (2) "the principle that replacing intermediaries is a prototypical valid business purpose," and (3) "the administrability problems associated with forcing a company to deal with its rival." Viamedia, 2016 WL 6568074, at *16 (quotations omitted). The Amended Complaint improperly advances several legal arguments that are contrary to the Court's reasoning. Although the Amended Complaint does not attempt to address the first of the Court's grounds for dismissal, Viamedia does advance new allegations (which are legal arguments rather than well-pleaded factual allegations) as to the second and third. The Amended Complaint attempts to address the Court's second basis (regarding disintermediation of a middleman) by arguing that the decision of RCN and WOW to move their representation business to Comcast "simply replace[d] one intermediary with another" because Comcast "still act[ed] as an intermediary between the MVPDs and the advertisers who purchase regional advertising through the Interconnects." Am. Compl. ¶ 165. Those allegations fail as a matter of law. Other allegations of the Amended Complaint—carried over from the original complaint—show that disintermediation has occurred and constitutes a "rational procompetitive purpose." Viamedia, 2016 WL 6568074, at *16. The Amended Complaint and the Court's decision show that, prior to the alleged refusal to deal in Chicago and Detroit, RCN and WOW gave control of their Spot Cable Avails to Viamedia, and Viamedia then allocated a portion of those avails to 5 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 10 of 18 PageID #:323 Comcast for sale to advertisers. See id., at *16; Am. Compl. ¶¶ 35, 48, 66, 74, 103. Following the refusal to deal, Comcast established a direct relationship with RCN and WOW (Am. Compl. ¶¶ 127, 131), removing the intermediary role of Viamedia: The Court was correct in characterizing this modification in the chain of distribution as procompetitive disintermediation. Next, as to the "administrability problems" identified by the Court, Viamedia asserts that "there are no material administrability problems" in allowing Viamedia to participate in Comcast-controlled Interconnects because "by the very nature of its role as Interconnect manager, Comcast is already dealing with [MVPD] competitors." Am. Compl. ¶ 167. Viamedia's assertion lacks merit. In its role as an Interconnect operator, Comcast deals voluntarily with other MVPDs. In contrast, the administrability problems that the Supreme Court has highlighted arise from forcing a firm to deal with rivals. See Trinko, 540 U.S. at 407-08 ("Enforced sharing also requires antitrust courts to act as central planners, identifying the proper price, quantity, and other terms of dealing-a role for which they are ill suited.").2 Such forced sharing is exactly what Viamedia seeks the Court to impose in this case. 2 See also Chic. Prof'l Sports Ltd. P'ship v. NBA, 95 F.3d 593, 597 (7th Cir. 1996) ("[T]he antitrust laws do not deputize district judges as one-man regulatory agencies."); Ball Mem'l Hosp. v. Mutual Hosp. Ins., 784 F.2d 1325, 1340 (7th Cir. 1986) (courts should not "become little versions of the Office of Price Administration"); Richard A. Posner, Antitrust Law 242 (2d ed. 2001) ("Where the refusal to deal is unilateral, the only effective remedy is an order that the defendant do business with the victim of the refusal to deal. The antitrust court becomes charged with the supervision of an ongoing commercial relationship, a function that courts are not equipped to perform effectively."). 6 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 11 of 18 PageID #:323 Indeed, rather than pleading facts to cure this defect, Viamedia's Amended Complaint illustrates it: Viamedia concedes that Comcast offered to continue to allow it to participate in the Chicago and Detroit Interconnects, but Viamedia characterizes the terms of the offer as "commercially unreasonable." Am. Compl. ¶ 122. In order to evaluate such a claim, the Court would need to determine the "reasonableness" of the offered terms—which is precisely the kind of inquiry and "central planning" for which the Supreme Court warned courts are "'ill suited.'" Viamedia, 2016 WL 6568074, at *15 (quoting Trinko, 540 U.S. at 408). Viamedia's Amended Complaint also contends that refusing to deal with it is "not necessary" to achieving the uncontested efficiencies that result from a direct relationship between Comcast, in its role as Interconnect manager/sales representative, and other MVPDs. Am. Compl. ¶ 166. But Viamedia pleads no facts in support of that conclusory allegation, so it should be disregarded on this motion. See, e.g., Zahn v. N. Am. Power & Gas, LLC, 815 F.3d 1082, 1087 (7th Cir. 2016) (a court need not "accept as true any legal assertions or recital of the elements of a cause of action supported by mere conclusory statements") (quoting Vesely v. Armslist LLC, 762 F.3d 661, 664-65 (7th Cir. 2014)). In addition to their lack of merit, Viamedia could have made all of those new arguments in opposition to Comcast's original motion to dismiss, but did not. In its opening brief, Comcast argued that disintermediation served a "valid business purpose" and highlighted the well-established problems with forced sharing, including that courts are "ill suited" to administer it and that it creates disincentives to invest. Mem. at 7-8, 7 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 12 of 18 PageID #:323 14.3 Viamedia had the opportunity to advance the arguments that appear in its Amended Complaint, but did not. It is improper for Viamedia to try to salvage its dismissed refusal to deal claims by now presenting in its Amended Complaint new allegations that are nothing more than legal arguments, particularly since Viamedia failed to advance those arguments in opposition to Comcast's motion to dismiss. See, e.g., Gonzalez v. City of Elgin, 2007 WL 4246899, at *3 (N.D. Ill. Nov. 28, 2007) ("[L]eave to amend. . . is not a means by which a plaintiff can get around prior rulings in an action and rehash resolved legal issues with each new complaint."); cf. Zurich Capital Mkts. Inc. v. Coglianese, 383 F. Supp. 2d 1041, 1045 (N.D. Ill. 2005) (St. Eve, J.) ("[I]t is clear that motions to reconsider are not appropriate vehicles to advance. . . new legal theories not argued before the ruling."). B. Viamedia's Remaining "New" Allegations Add Nothing The rest of Viamedia's "new" allegations attempt to bolster Viamedia's argument that Comcast's alleged refusal to deal was "irrational" but for its anticompetitive effect. See Am. Compl. ¶¶ 154-164. But Viamedia already alleged the same basic facts in its original complaint, and its Amended Complaint merely adds more verbiage and redundant details. Comcast did not argue, and the Court did not rule, that Viamedia's allegations were too conclusory or insufficiently detailed. Instead, Comcast argued, and the Court agreed, that those allegations were insufficient as a matter of law even when accepted as true and evaluated in the light most favorable to Viamedia. Viamedia, 2016 3 "Mem." refers to Memorandum of Law in Support of Defendants' Motion to Dismiss Plaintiff's Complaint (Dkt. 23). 8 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 13 of 18 PageID #:323 WL 6568074, at *6, *16. The Court should not alter this conclusion based on the Amended Complaint's allegations. Many of the new allegations attempt to establish that Comcast's alleged conduct reduced the value of the Detroit and Chicago Interconnects, and that this is evidence of anticompetitive purpose. The Amended Complaint alleges, for example, that the more MVPDs participate in Interconnects operated by Comcast, the more the Interconnects are worth and the more fees Comcast earns. See Am. Compl. ¶¶ 154-164. Viamedia characterizes the alleged refusal to deal as "thus irrational and contrary to [Comcast's] economic incentives." Id. ¶ 158. But Viamedia's original complaint alleged that "'[t]he value of an interconnect increases as more MVPDs in an area participate, so [Comcast's] incentive is to have as many MVPDs participate as possible.'" 4 Compl. ¶ 39; accord Am. Compl. ¶ 39.5 Based on those allegations, the original complaint alleged: "Nor is [Viamedia's alleged] exclusion reconcilable with the economic purpose of the Interconnects or Comcast's own observation that '[t]he value of an interconnect increases as more MVPDs in an area participate.'" Compl. ¶ 116. Further, in opposition to Comcast's motion to dismiss, Viamedia echoed those very allegations and arguments in 4 That allegation selectively quotes, without attribution, a letter from Comcast to the Federal Communications Commission (FCC). See Letter from Kathry A. Zachem, Comcast Corporation to Marlene H. Dortch, Secretary, FCC, dated Oct. 16, 2014, at 3, available at https://ecfsapi.fcc.gov/file/60000973905.pdf. The full sentence states: "The value of an interconnect increases as more MVPDs in an area participate, so our incentive is to have as many MVPDs participate as possible, which is why we have made multiple presentations to MVPDs to join interconnects – including Viamedia's customers." Id. (emphasis added). 5 "Compl." refers to Viamedia's original complaint (Dkt. 1). 9 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 14 of 18 PageID #:323 support of its contention that "[t]here is no pro-competitive justification for excluding an MVPD or its representative from an Interconnect." Opp. at 8.6 Similarly, the Amended Complaint adds allegations that purport to roughly quantify an "immediate" effect of Comcast's alleged conduct, claiming that the Interconnects' coverage were reduced from 100% of MVPD subscribers to 90% in Chicago and 80% in Detroit and Hartford. See Am. Compl. ¶¶ 159-161. But the original complaint also alleged that spot cable advertisements reach only subscribers to the MVPDs that sell the ads, see Compl. ¶ 30,7 and that Viamedia's affiliated MVPDs had significant numbers of subscribers. See id. ¶¶ 9, 17. The particular numerical percentages add nothing of legal relevance. In the face of these same basic allegations, the Court correctly held that Viamedia had "failed to plead facts showing that Defendants' decision was irrational but for its anticompetitive effects." Viamedia, 2016 WL 6568074, at *16. There is no reason to change this conclusion. The Amended Complaint concedes that Comcast has not excluded RCN or WOW from the Chicago or Detroit Interconnects—they are indisputably represented by Comcast for sales through the interconnect. Am. Compl. ¶¶ 127-128, 130. All that has occurred is that Comcast has replaced an indirect relationship with these MVPD (through Viamedia) with a direct relationship these MVPDs—this is the disintermediation that the Court held to be a "prototypical valid business purpose." Viamedia, 2016 WL 6568074, at *16. 6 "Opp." refers to Plaintiff's Opposition to Defendants' Motion to Dismiss (Dkt. 28). 7 See also Compl. ¶¶ 128, 131 (advertisers reach WOW and RCN subscribers only through those MVPDs and their spot cable advertising representative). 10 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 15 of 18 PageID #:323 The Amended Complaint also alleges that "Viamedia has paid and offered to pay Comcast fair market value" to participate in Interconnects and that Comcast "forfeited direct fees that it otherwise would have received pursuant to its role as the Interconnect manager." Am. Compl. ¶¶ 157, 159-161. But those allegations add no substance to the original complaint's allegations that Interconnect operators earn fees from participating MVPDs and their representatives, and that Viamedia paid Comcast more than $23 million in fees for participating in the Chicago and Detroit Interconnects. Compl. ¶¶ 35, 44, 110. Comcast obviously does not earn fees from Viamedia for managing Interconnects in which Viamedia does not participate. As a legal matter, allegations of lost revenue are insufficient to support a unilateral refusal to deal claim. A firm that declines to deal with a rival will always forfeit the fees or revenues that it could have earned dealing with that rival. And Viamedia acknowledges that Comcast subsequently established a direct relationship with RCN and WOW, and Viamedia does not contest that those direct relationships have "potential improved efficiencies." Am. Compl. ¶¶ 127, 131, 166. Under these circumstances, allegations of lost fees cannot suffice to support a refusal to deal claim. See Olympia Equip. Leasing Co. v. W. Union Tel. Co., 797 F.2d 370, 376 (7th Cir. 1986) ("If a monopolist does extend a helping hand, though not required to do so, and later withdraws it. . . does he incur antitrust liability? We think not."); see also, e.g., Christy Sports, LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1198 (10th Cir. 2009) ("The antitrust laws should not be allowed to stifle a business's ability to experiment in how it 11 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 16 of 18 PageID #:323 operates, nor forbid it to change course upon discovering a preferable path.").8 In addition, Viamedia has failed to fix a fundamental flaw in its original complaint identified by the Court: "Viamedia has not alleged or explained how Defendants' refusal to deal with it—separate from Defendants' other conduct like conditioning MVPDs' access to Interconnects on accepting Comcast Spotlight's services even for advertising sales that do not involve an Interconnect—has no rational procompetitive purpose." Viamedia, 2016 WL 6568074, at *16 (emphasis added). The Court elaborated that "Comcast refusing to provide Interconnect services to MVPDs. . . is simply part of the tying claim," not the refusal to deal claim. Id. at *17 n.9. Instead of remedying that clearly identified defect, however, Viamedia's Amended Complaint continues to conflate the refusal to deal claim and the tying claim. For example, in attempting to plead that refusing to deal with Viamedia is "irrational" because it reduces the value of Interconnects, Viamedia makes no attempt to separate its own non- participation in the Interconnects from the non-participation of its MVPD clients. See, e.g., Am. Compl. ¶¶ 159-161. To the contrary, Viamedia expressly alleges the combined effect "of excluding Viamedia and [its MVPD clients]" from Interconnects. Id. (emphasis added). That unfixed flaw remains fatal to Viamedia's refusal to deal claim. C. Viamedia's Allegations of Refusals to Deal Outside of Chicago and Detroit Add Nothing and, in Any Event, Lack Merit The Amended Complaint alleges that Comcast is "now similarly refusing to deal" 8 Similarly, Viamedia's conclusory allegation that "dealing with Viamedia would have entailed no cost to Comcast," Am. Compl. ¶ 158, ignores the obvious opportunity cost of being blocked from dealing directly with MVPDs and thereby losing the efficiency benefits of a direct relationship. 12 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 17 of 18 PageID #:323 with Viamedia in several other markets, including Hartford, and contends that this is "economically irrational for the same reasons" as with respect to Chicago and Detroit. Am. Compl. ¶¶ 161-162. It is unclear whether Viamedia is attempting to allege a unilateral refusal to deal claim with respect to markets beyond Chicago and Detroit.9 Any such claim would lack merit. Viamedia never alleges—nor could it—that Comcast ever dealt with Viamedia any of those DMAs. For all the reasons discussed above, a prior voluntary course of dealing is not sufficient to establish a refusal to deal claim under Trinko. But such a prior course of dealing is necessary to state a refusal to deal claim. See, e.g., Duty Free Ams., Inc. v. Estee Lauder Cos., 797 F.3d 1248, 1266-67 (11th Cir. 2015); Novell, 731 F.3d at 1074-75; LiveUniverse, Inc. v. MySpace, Inc., 304 F. App'x 554, 556 (9th Cir. 2008); In re Elevator Antitrust Litig., 502 F.3d 47, 52 (2d Cir. 2007) (per curiam). Indeed, the fact that Comcast consistently has declined to deal with Viamedia anywhere outside of Chicago and Detroit underscores precisely why it was not "economically irrational" for Comcast to decline to renew its relationship with Viamedia in those DMAs. Competition is the norm between Viamedia and Comcast, and cooperation is the exception. This should reinforce the Court's conclusion that there is no basis to infer any anticompetitive purpose or effect from Comcast's conduct.10 9 The original complaint contained allegations that Comcast declined to deal with Viamedia elsewhere. See Compl. ¶¶ 10-11, 121, 136-137, 167, 175. Nevertheless, the Court properly dismissed any and all refusal to deal claims—irrespective of geography. Accordingly, the "new" allegations about other DMAs also effectively amount to a motion for reconsideration of the Court's order. 10 Solely for preservation purposes, Comcast hereby incorporates by reference the additional arguments for dismissing Viamedia's claims in their entirety that Comcast advanced in support of its motion to dismiss Viamedia's original complaint. 13 Case: 1:16-cv-05486 Document #: 46 Filed: 12/12/16 Page 18 of 18 PageID #:323 CONCLUSION For these reasons, the Court should dismiss Viamedia's re-pleaded refusal to deal claims with prejudice.11 Dated: Dec. 12, 2016 Respectfully submitted, COMCAST CORPORATION and COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC By: /s/ Ross B. Bricker Ross B. Bricker Sally K. Sears Coder JENNER & BLOCK LLP 353 N. Clark Street Chicago, IL 60654-3456 Tel: (312) 222-9350 Fax: (312) 527-0484 rbricker@jenner.com ssearscoder@jenner.com Arthur J. Burke (pro hac vice) David B. Toscano (pro hac vice) DAVIS POLK & WARDWELL LLP 450 Lexington Avenue New York, New York 10017 Tel: (212) 450-4000 Fax: (212) 701-5800 Arthur.Burke@davispolk.com David.Toscano@davispolk.com Attorneys for Defendants Comcast Corporation and Comcast Cable Communications Management, LLC 11 Consistent with local practice, Comcast does not intend to answer Viamedia's Amended Complaint until after the Court rules on this motion. See, e.g., Vendetti v. Compass Envtl., Inc., 2006 WL 8199711, at *3 (N.D. Ill. Oct. 25, 2006) (Aspen, J.) ("Courts in the Northern District of Illinois have adopted the 'majority interpretation' . . . . that a defendant's filing of a partial motion to dismiss automatically extends its time to answer the unchallenged counts, as if it had moved to dismiss all counts."); see also See 2 Moore's Federal Practice § 12.12 (3d ed. 2016) ("Serving any motion, even one that addresses only a few of the counts or claims in a pleading, is sufficient to postpone the time to answer the entire pleading."). 14