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Cable company prevails in important appeal addressing "sham litigation" doctrine

October 2017

The First Circuit unanimously affirmed the grant of summary judgment to Jones Day's client, a subsidiary of Liberty Global (the world's largest international TV and broadband company), rejecting antitrust claims pursued by Puerto Rico Telephone Company (PRTC), the monopoly telephone service provider on the island.

The claims, first filed in 2011 in the United States District Court in Puerto Rico, alleged that San Juan Cable had monopolized the market for television service in Puerto Rico through a pattern of "sham litigation" that was designed to prevent PRTC's entry into the market. Jones Day took up defense of the action after the court refused to dismiss the suit. In 2013 and 2014, Jones Day moved for summary judgment on two separate legal theories. The district court heard oral argument in May 2016, and ultimately granted summary judgment in July 2016, dismissing the case in its entirety.

On appeal, the First Circuit agreed with Jones Day's position that PRTC had not established "sham litigation" as a matter of law, and therefore that San Juan Cable's litigation activity was immune from antitrust liability. Importantly, the court's opinion cast doubt on the theory, adopted by four other circuits, that the immunity that attaches to objectively reasonable litigation loses its force in the context of a "pattern" of such suits. It further held that, in all events, PRTC had not adduced sufficient evidence to make out a "sham litigation" claim under any legal standard. Two judges on the panel separately concurred to elaborate on their views of what circumstances could give rise to such a claim.

Puerto Rico Telephone Company, Inc. v. San Juan Cable LLC, No. 3:11-cv-02135(D.P.R.); No. 16-2132 (1st Cir.)

For additional information about this matter, please contact: Thomas Demitrack, Yaakov M. Roth

Client(s): Liberty Cablevision of Puerto Rico