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JUN
14
2 YEARS

CBS' Les Moonves Escapes Deposition in Aereo Case

The executive won't have to explain comments like "Aereo is not a problem, it's been blown way out of proportion."

Les Moonves - P 2013
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Les Moonves

In the ongoing legal battle over Aereo, the upstart digital TV distributor won't be able to ask CBS CEO Leslie Moonves questions under oath about how Aereo's presence in the marketplace has affected the network's negotiations with cable and satellite companies.

A recent decision by a magistrate judge to deny Aereo's request to depose the CBS chief executive comes in the midst of a bruising fight in the discovery portion of the litigation. In recent months, most of the attention has been paid to what's been happening at the appellate level -- particularly, Aereo's April victory and the broadcasters' request for a rehearing -- but what's happening at the trial court is important as well.

STORY: Comcast CFO Discusses Telemundo Profits, NBC Upside, Aereo 

Aereo and the broadcasters are gearing up for trial over whether Aereo's system of capturing over-the-air TV signals and transmitting them to subscribers' digital devices is copyright infringement. Both sides have brought summary judgment motions with the aim of scoring a pretrial knockout victory, but if U.S. District Judge Alison Nathan determines there's questions that are best left to a jury for answers, expect a trial to happen in the very early months of next year.

On Wednesday, magistrate judge Henry Pitman gave some further clarity on the timetable by ordering that witness depositions must be completed by mid-November, that dispositive motions have to be filed by mid-December and that Judge Nathan's pretrial order would be filed on Jan. 14, 2014.

Included in Pitman's order were two more interesting directives.

Ever since Aereo brought a motion for summary judgment in May, the broadcasters have argued that it closed the discovery window. Judge Pitman has now overruled that objection.

The broadcasters will now have to turn over more documents, including retransmission agreements that were negotiated after Aereo appeared on the radar in May 2011.

Aereo is aiming to rebut the broadcasters' presumption that poached viewers from cable and satellite companies have damaged their ability to negotiate retransmission agreements and other licensing deals.

In March, Judge Pitman held a hearing about Aereo's request to see broadcaster documents -- and it was one that attracted others in the entertainment industry. Hulu, Netflix, Amazon and Apple all have deals with the broadcasters and they are sensitive about what's going to be handed over -- even under a protective order that ensures the material will only be seen by Aereo's attorneys.

It was also a hearing where Aereo's success -- or lack thereof -- in the marketplace came up. The judge repeatedly asked Aereo how many subscribers it has, and the company's attorneys refused to divulge that.

At the conclusion of the hearing, the magistrate judge mostly denied requests for the large quantity of information that Aereo was seeking in its efforts to undercut broadcasters' harm arguments. The judge refused, for instance, to permit Aereo to collect info about licensed Internet retransmission technologies and research about in-home DVRs. The judge did order the plaintiffs to produce retransmission contracts after May 2011, though -- albeit with commercially sensitive portions redacted.

Neither side was thrilled with the ruling.

Aereo objected that broadcasters were treating discovery like a game of "hide the ball," and that without a comprehensive order, it would be "utterly hamstrung and highly prejudiced."

In turn, ABC sought reconsideration on the turnover of retransmission agreements, even going so far as proposing that it be able to stipulate instead that the launch of Aereo hadn't "affected the material terms of any retransmission" after May 2011. ABC also contended that its argument wasn't that Aereo was harming retransmission agreements, but rather that Aereo merely presents a threat of such harm until it is widely available. It appears to be a nod to industry suspicions that Aereo doesn't have too many customers at the present time.

Aereo refused the stipulation and has continued to push for as much discovery as it possibly can get.

STORY: CBS Asks New York Court to Dismiss Aereo's Lawsuit 

And this is where Moonves comes in, as Aereo wished to depose him over comments he's made publicly about Aereo. For example, in April, he was quoted as saying, "It's nothing we lose sleep over. … Aereo is not a problem, it's been blown way out of proportion."

Judge Pitman isn't changing his mind. Retransmission agreements will have to be turned over -- although there will likely be things blacked out that Aereo will probably be suspicious about. And Moonves won't be deposed. And so, Aereo probably won't get the chance to ask him why he thinks the company is not a problem (but wants a lot of money in damages).

As for Moonves' subordinates? Well, that's another story. As the judge directed on Wednesday, "Defendant may serve interrogatories upon CBS seeking the identification of employees with knowledge of the facts underlying the statements made by Mr. Moonves during the earnings calls cited."

E-mail: eriq.gardner@thr.com
Twitter: @eriqgardner