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Weil Wins Major Fourth Circuit Appeal Sustaining Trial Win for Discovery Communications

On March 15, 2018, Weil won an important appeal before the U.S. Court of Appeals for the Fourth Circuit for clients Discovery Communications and Animal Planet in a major dispute with a television distribution company. In a detailed, unanimous decision, the Fourth Circuit affirmed the Maryland federal court that had granted Discovery a complete defense victory over plaintiff Sky Angel’s claims following a multi-week trial in which 27 witnesses testified.

Sky Angel – one of Discovery’s prior television distributors – had alleged that Discovery breached the parties’ Affiliation Agreement in several ways when it terminated the Agreement after becoming aware that Sky Angel was utilizing an inappropriate distribution mechanism to distribute Discovery’s programming. Sky Angel had sought tens of millions in damages, and had initially sought specific performance of the Agreement as well.

The Fourth Circuit, like the District Court, found that Discovery’s termination was ultimately proper because it was objectively reasonable in its dissatisfaction with Sky Angel’s method of distribution, and exercised its contractual termination rights in good faith. The Court held that the trial court properly construed the parties’ Agreement, and also correctly evaluated the extrinsic evidence, all of which confirmed that “Discovery never intended to grant Sky Angel the right to distribute the rights that Sky Angel now claimed,” and that Sky Angel’s claims to the contrary were “not apparent from the text of the agreement nor from extrinsic evidence related to the parties’ intent.”

The Weil team was led by Complex Commercial Litigation practice Co-Head David Yohai, who argued the appeal and first-chaired the trial, and included partners Ted Tsekerides, Peter Isakoff, and Greg Silbert, counsel David Yolkut, and associate Tracy Ederer.

Legalese