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Illinois Bell Telephone v. Comcast of Illinois III

May 7, 2008

ILLINOIS BELL TELEPHONE, D/B/A AT&T ILLINOIS, PLAINTIFF,
v.
COMCAST OF ILLINOIS III, INC; COMCAST CABLE HOLDINGS LLC, AND COMCAST OF CHICAGO, INC., DEFENDANTS.
COMCAST OF ILLINOIS III, INC; COMCAST CABLE HOLDINGS LLC, AND COMCAST OF CHICAGO, INC., COUNTERCLAIMANTS,
v.
ILLINOIS BELL TELEPHONE, D/B/A AT&T ILLINOIS, COUNTERDEFENDANT, AND AT&T, INC., THIRD-PARTY DEFENDANT.



The opinion of the court was delivered by: Elaine E. Bucklo United States District Judge

MEMORANDUM OPINION AND ORDER

Before me is a motion by Illinois Bell Telephone, d/b/a/ AT&T Illinois ("Bell"),*fn1 to dismiss counts I-IV of the counterclaims of Comcast of Illinois III, Inc., Comcast Corporation, Comcast Cable Holdings LLC, and Comcast of Chicago, Inc., (collectively, "Comcast"). For the reasons discussed below, the motion is denied.

I.

Comcast is the dominant provider of subscription television services to Illinois residents. Bell began competing with Comcast for Illinois television customers in 2004 with subscription satellite television services known as DISH Network. In January of this year, Bell introduced subscription IP-based wireline television services known as U-verse TV that also compete with services Comcast offers to Illinois customers.

This action commenced with Bell's complaint and motion for a preliminary injunction seeking to stop Comcast from disseminating allegedly false advertisements attacking Bell's television services. In short, Bell complains that Comcast's advertisements falsely suggest that customers who choose Bell's services will have their homes "blocked" by giant utility boxes, and that those boxes--or Bell's services generally---also "block" the subscriber's access to high definition (HD) television. Bell seeks injunctive and monetary relief under the Lanham Act, 15 U.S.C. § 1125(a) and Illinois statutory law.

At the preliminary injunction hearing, Comcast represented that the ads Bell complained about had either been "pulled" or had run their course and would not reappear in the same form. Comcast defended the claims in the ads as truthful, however, and would not commit to refraining from making similar claims in future ads.

As the parties briefed and prepared to present evidence on these issues, Comcast filed a counterclaim and sought a preliminary injunction of its own to stop Bell from interfering with Comcast's provision of cable television services to its customers. Comcast alleges that during the process of installing its U-verse services, Bell has repeatedly disrupted Comcast's services, and that Bell has failed to take appropriate actions to curtail the problem. Comcast alleges a violation of the Cable Communications Policy Act, 47 U.S.C. § 533 (the "Cable Act"), and common law based on Bell's disruption of Comcast's services. In addition to damages and injunctive relief, Comcast seeks a declaratory judgment that certain claims in its advertisements directed to Bell's services are truthful.

In response, Bell filed a motion under Fed. R. Civ. P. 12(b)(6) and 12(b)(1) to dismiss all of Comcast's counterclaims other than its claim for a declaratory judgment.*fn2 Bell argues that Comcast fails to state a claim under the Cable Act, and that I lack jurisdiction to adjudicate Comcast's remaining claims. It is this motion that I now consider.

II.

A motion to dismiss tests the sufficiency of a complaint or counterclaim but does not rule on its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). When considering a motion to dismiss, I must accept all well-pleaded allegations in the challenged pleading as true and draw all reasonable inferences in the non-movant's favor. McMillan v. Collection Prof'ls, Inc., 455 F.3d 754, 758 (7th Cir. 2006). The pleading must, nevertheless, allege sufficient facts to suggest plausibly that the claimant is entitled to relief. Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007).

III.

Whether or not Comcast states a claim under the Cable Act is potentially dispositive of the jurisdictional dispute,*fn3 so I begin my analysis there. The Cable Act provides that:

No person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized to do so by a cable operator or ...


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