N.Y. Court Upholds Retrans Ruling Against Nexstar

NEW YORK —Supreme Court of the State of New York Appellate Division in the First Judicial Department has upheld a lower court ruling that Nexstar fraudulently collected $10.5 million in retransmission fees from DirecTV.

Nexstar had appealed a New York Supreme Court ruling issued on July 17. In the suit, DirecTV said that it had been paying retransmission feeds for WHAG in Hagerstown Maryland based on WHAG’s NBC affiliation.

“WHAG lost its NBC affiliation on July 1, 2016, approximately one year into the agreement’s three-year term, and defendant later changed WHAG’s call sign and rebranded the station, the Appellate Division order said. “However, defendant did not inform plaintiff that WHAG had lost its affiliation and continued to collect more than $10.5 million in Unlaunched Station Fees pertaining to WHAG for the remainder of the agreement’s term. When plaintiff discovered that WHAG had become an independent station, it informed defendant that it would no longer pay the Unlaunched Station Fee and asked defendant to return the Unlaunched Station Fees that it had paid following the loss of WHAG’s NBC affiliation. Defendant refused, and plaintiff stopped paying the Unlaunched Station Fees.”

During the case, DirecTV also presented evidence that Nexstar had been told by NBC that it would lose the affiliation for WHAG.

“Despite defendant’s unproven, self-serving contentions that it expected to renew its NBC affiliation agreement and that it worked until the last second to secure an extension from NBC, there was unrebutted testimony from two NBC employees who testified that NBC advised defendant that there would be no further extensions to WHAG’s NBC affiliation beyond its June 30, 2016 termination, and that NBC never suggested to defendant that it might reconsider this decision,” the order noted. “Thus, defendant knew that the termination of the NBC affiliation was a fait accompli and intentionally concealed this information from plaintiff.”

“Supreme Court properly found that plaintiff’s fraudulent inducement cause of action could provide a separate basis for recovery of Unlaunched Station Fees,” the order also stated.