Opinion ID: 75626
Heading Depth: 4
Heading Rank: 3

Heading: Corrective Action

Text: 62 The district court's third ground for finding willful and repeated violations for preliminary injunction purposes was the fact that EchoStar failed to demonstrate corrective action. Specifically, the court found that: (1) there was no evidence that EchoStar intended to take corrective action in light of Hawkins' findings of presumptively illegal subscribers, and (2) there was no evidence that EchoStar turned off its pre-July 1998 subscribers signed-up in reliance on PrimeTime's subjective qualification process, which was held insufficient to comply with SHVA in ABC, Inc. v. PrimeTime 24, 184 F.3d 348 (4th Cir. 1999), CBS II, 48 F. Supp. 2d 1342, and CBS I, 9 F. Supp. 2d 1333. 63 As to the first finding, the court reasoned that Hawkins' declaration established that at least 9,956 of EchoStar's subscribers in the five test markets were presumptively illegal. The court reasoned that Hawkins does not suggest that a substantial portion of those 9,956 presumptively illegal subscribers received waivers or had field testing performed at their households, but instead states only that `certain subscribers' received waivers or were subjected to field testing. Finding that Hawkins did not suggest that EchoStar plans to take corrective action with regard to those subscribers, the court inferred that EchoStar was aware that significant numbers of its subscribers presumptively do not reside in unserved households, [and] has not acknowledged that fact and apparently has taken no corrective action, which demonstrates a willful disregard of [SHVA]. 64 EchoStar argues that the foregoing conclusion is clearly erroneous because the Networks submitted no evidence that EchoStar did not intend to bring itself into compliance and the record actually establishes the opposite. We agree that the district court erred. 65 The district court's inference that EchoStar will not take corrective action is an abuse of discretion on this record. First, the court rejected Hawkins' suggestion that some of the 9,956 presumptively illegal subscribers were eligible under the Act because the individuals received favorable signal strength tests or waivers from the local affiliates. Because EchoStar did not introduce evidence of waivers or signal tests in the preliminary injunction proceedings, the court inferred that no such proof of compliance existed and no such measures had been taken. Such an inference is inconsistent with Hawkins' declaration that certain subscribers are included in the sorting even though they have obtained [waivers] or cannot, in fact, receive a Grade B signal . . . as confirmed by actual field testing. (emphasis supplied). As is evident, the court rejected Hawkins' assertion that certain subscribers have obtained signal tests or waivers, and concluded that EchoStar did not possess such evidence, without any record evidence indicating this statement was untrue or otherwise not credible. Without the benefit of an evidentiary hearing, the district court erred in rejecting Hawkins' assertions as not credible. 18 We conclude that the drastic remedy of a nationwide injunction should be based on stronger evidence than we find in this record. 66 Also, the district court erred in finding willful and repeated violations from EchoStar's failure to come forward with evidence that its pre-July 1998, PrimeTime-derived subscribers, qualify as unserved. The district court reached this conclusion by erroneously relying on what it perceived to be a concession by Charles Ergen, EchoStar's president and Chief Executive Officer, that EchoStar did not attempt to determine the eligibility of its pre-July 1998 subscribers until September of 1999. 67 Ergen's affidavit discusses EchoStar's testing of pre-July 1998 subscribers under the new ILLR model, and indicates the results will be available soon. Ergen's affidavit also suggests that EchoStar did in fact test all of its subscribers to ensure SHVA compliance. The Networks argue that because Ergen's affidavit states only that EchoStar tests potential subscribers, this demonstrates that EchoStar only screens new customers, and not its pre-July 1998 subscribers. 68 The Networks' interpretation of Ergen's affidavit, which the district court embraced, is plausible. We, however, did not read Ergen's statements that way. In the face of two plausible interpretations of evidence submitted to demonstrate a contested issue, the district court is not at liberty to accept one construction of the evidence and reject the other without the benefit of an evidentiary hearing. 19 See McDonald's Corp. v. Robertson, 147 F.3d 1301, 1312 (11th Cir. 1998). In the absence of an evidentiary hearing, we cannot conclude that what we know from the instant, sparse record about Echostar's handling of its pre-July 1998, subscribers adds much to the resolution of the substantial likelihood of success issue.