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Planet Earth TV, LLC v. Level 3 Communications, LLC

United States District Court, W.D. North Carolina, Asheville Division

August 2, 2018

PLANET EARTH TV, LLC, Plaintiff,
v.
LEVEL 3 COMMUNICATIONS, LLC, Defendant.

          MEMORANDUM OF DECISION AND ORDER

          Martin Reidinger, Judge

         THIS MATTER is before the Court on the Defendant's Motion for Judgment on the Pleadings [Doc. 23] and the Defendant's Motion for Summary Judgment [Doc. 39]. A hearing was held on these motions on July 6, 2018.

         I. BACKGROUND

         The Plaintiff Planet Earth TV, LLC is a North Carolina start-up company that proposed to provide on-demand television content via the internet to retail customers. Defendant Level 3 Communications, LLC is a Delaware company that provides telecommunications services.

         The Defendant extended to the Plaintiff a proposal whereby the Defendant would provide “Origin Storage” and “Video Delivery” services to the Plaintiff, along with access to Adaptive Origin Servers (“AOSs”). The “Origin Storage” consisted of the Defendant's servers for the storage of the video content the Plaintiff sought to provide to its customers, and “Video Delivery” pertained to the means by which that content would be delivered to the Plaintiff's customers. The AOSs are the physical servers necessary to store the content in a manner such that it is accessible to the Plaintiff's customers on demand.

         The Defendant's proposal called for the agreement between the Plaintiff and the Defendant to commence on January 1, 2016, with the first two months' service to be provided free of charge. Thereafter, the Plaintiff was to pay a $3, 500 set-up fee plus $8, 000 per month. The Plaintiff signed this proposal, thus constituting an offer, which the Defendant accepted. Though not specifically addressed in the proposal, the Defendant required that the Plaintiff post a letter of credit to secure the payments due. The Plaintiff provided the Letter of Credit through BB&T. By its terms, the Letter of Credit expired on November 10, 2016.

         The Plaintiff never connected to the Defendant's network. The main point of contention between the parties is whether the Defendant effectively provided the “ingest IP address” to the Plaintiff. This is, in essence, the access code by which the Plaintiff would be able to begin uploading its content to the Defendant's network. Without it, the Defendant's services were useless to the Plaintiff. There is a factual dispute as to whether the Defendant provided this ingest IP address at all, and if the Defendant did, whether it was provided in a manner that was ineffective and thus nevertheless constituted a material breach of the contract.

         The Plaintiff paid the $8, 000 invoice for March 2016 but never made another payment. The Defendant drew on the Letter of Credit on November I, 2016, mere days before it was set to expire, in the amount of $67, 500. The Defendant terminated service on November 18, 2016, though the Plaintiff had never connected or uploaded any content.

         The Plaintiff asserts five causes of action against the Defendant: (1) breach of contract; (2) conversion, including a claim for punitive damages; (3) declaratory judgment; (4) rescission; and (5) unjust enrichment. The Defendant, in turn, asserts a counterclaim against the Plaintiff for breach of contract.

         II. STANDARD OF REVIEW

         Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is “material” if it “might affect the outcome of the case.” N&O Pub. Co. v. RDU Airport Auth., 597 F.3d 570, 576 (4th Cir. 2010). A “genuine dispute” exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).

         A party asserting that a fact cannot be genuinely disputed must support its assertion with citations to the record or by showing that the adverse party cannot produce admissible evidence to support that fact. Fed.R.Civ.P. 56(c)(1). “Regardless of whether he may ultimately be responsible for proof and persuasion, the party seeking summary judgment bears an initial burden of demonstrating the absence of a genuine issue of material fact.” Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003). If this showing is made, the burden then shifts to the non-moving party who must convince the court that a triable issue exists. Id. Finally, in considering a party's summary judgment motion, the Court must view the pleadings and materials presented in the light most favorable to the non-moving party, and must draw all reasonable inferences in favor of the non-movant as well. Adams v. Trustees of Univ. of N.C. -Wilmington, 640 F.3d 550, 556 (4th Cir. 2011).

         III. DISCUSSION

         A. Breach of Contract The crux of this case is whether the Defendant materially breached its contractual obligation to provide the “ingest IP address” needed for the Plaintiff to access the Defendant's network and services. The parties' evidence is in conflict on this point, and therefore ...


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