Cablevision Systems Corp. v. Verizon New York Inc.

119 F. Supp. 3d 39, 2015 U.S. Dist. LEXIS 107544, 2015 WL 4758072
CourtDistrict Court, E.D. New York
DecidedAugust 7, 2015
DocketNo. 15-CV-456 (GRB)
StatusPublished
Cited by2 cases

This text of 119 F. Supp. 3d 39 (Cablevision Systems Corp. v. Verizon New York Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cablevision Systems Corp. v. Verizon New York Inc., 119 F. Supp. 3d 39, 2015 U.S. Dist. LEXIS 107544, 2015 WL 4758072 (E.D.N.Y. 2015).

Opinion

MEMORANDUM & ORDER

GARY R. BROWN, United States Magistrate Judge:

Cablevision Systems Corp. and Verizon New York, Inc., along with related entities (each group collectively referred to as “Cablevision” and “Verizon,’’.respectively) represent two industry leaders in the pro- - vision of data services to consumers, including, as principally relevant herein, wireless access to the Internet, commonly referred-to as “WiFi.”1 These organiza[42]*42tions have poured financial resources and technical ingenuity into their efforts, yielding .innovative offerings to the public. To reap the rewards of these efforts, and in a spirit of vigorous competition, the parties have developed creative — and often, highly amusing — marketing campaigns aimed at capturing public attention for their services.

In this action, Cablevision and Verizon each seek to enjoin certain advertisements produced by the other, claiming that those advertisements mislead the public or otherwise seek unfair advantage. Currently pending before the Court are cross-motions for preliminary injunctions. Cablevision’s application largely focuses on Verizon’s claims to offering the “Fastest WiFi Available from any provider,” primarily based on the assertion that the WiFi routers offered by Verizon are not demonstrably faster than those offered by Cablevision. Verizon, for its part, chiefly challenges Cablevision’s representations that it offers its customers 1.1 million WiFi hotspots, principally arguing that these ads are misleading because the overwhelming majority of those hotspots are located within customers’ homes. Other' challenges raised by Verizon include: (1) claims that Optimurh WiFi offers a “better data network"; (2) a claim that Verizon “two-times” its customers by charging separately for home Internet and cellular data service; and (3) statements relating to Cablevision’s “Freewheel”, a WiFi only device providing certain functions similar to those offered by cell-tower based “smartphone.”

Because, as detailed herein, neither organization has met the demanding standards for the issuance of a preliminary injunction, both motions are denied.

PROCEDURAL HISTORY

Plaintiffs Cablevision Systems Corp. and CSC Holdings, LLC commenced this action by filing a complaint against defendants Verizon Communications Inc., Verizon New York, Inc., and GTE Wireless Incorporated on January 29, 2015. Docket Entry (“DE”) 1. On February 2, 2015, plaintiffs filed a motion for preliminary injunction. DE 11. At a conference before the Honorable Leonard D. Wexler, plaintiffs withdrew their motion for preliminary injunction, and the parties set forth a briefing/discovery schedule as to anticipated cross-motions for preliminary injunction, and a hearing date of May 28, 2015 for those motions. DE 20.

Plaintiffs filed an amended complaint against defendants on February 11, 2015. [43]*43DE 21.2 The next day, defendants filed a counterclaim and answer against all plaintiffs. DE 27. Plaintiffs answered defendants’ counterclaim on March 5, 2015. DE 34.

On May 26, 2015, Judge Wexler referred the preliminary injunction hearing to the undersigned for a report and recommendation. DE 78. Each party then filed their respective motions for preliminary injunction on May 27, 2015. DE 84-88. On May 28, 2015, upon the parties’ consent, Judge Wexler ordered that the case be reassigned to the undersigned to conduct all proceedings. DE 89.

The undersigned held a preliminary injunction hearing on May 28, 2015, June 4, 2015, and June 5, 2015. DE 90, 92, 94. On June 3, 2015, defendants filed an amended counterclaim and answer to the plaintiffs’ First Amended Complaint. DE 92. On June 26, 2015, the Court “so ordered” a stipulation of dismissal against Verizon Communications Inc. Stipulation and Order dated June 26, 2015. On June 26, 2015, plaintiffs filed an answer to defendants’ counterclaim to the First Amended Complaint, DE 105, and a Second Amended Complaint. against defendants on the same date. DE 107. Defendants filed an answer and amended counterclaim to plaintiffs Second Amended Complaint on July 10, 2015. DE 1Í4.

FACTUAL BACKGROUND

1. Verizon’s WiFi Offerings and Related Promotions

The primary product offering by Verizon at issue in the instant matter is Verizon FiOS (“FiOS”), tr. 27:20-24; 170:14-15, which describes Verizon’s fiber optic network3 carrying Internet, television, and telephone services to residences and small businesses. Tr. 170:16-21; 181:1-4. Verizon and Cablevision offer varying Internet “speed plans” — also known as “tiers” — to customers at different prices. Tr. 98:7-11; see also. Tr. 170:24-171:6, 171:11-18, 251:25, 296:4-6, 426:13-23. Connection speed is commonly measured in scientific units known as megabits per second (“Mbps”), and can be calculated separately for upload and download speeds (meaning the speed at which data is sent to and received -from the Internet). See, e.g., Tr. 120:3-22; 171:3-5; 479:2-11. Verizon FiOS offers five speed tiers (ranging from download/upload speeds of 25/25 Mbps to 500/500 Mbps) at a (monthly cost of $65 to nearly $300 per month). See Sealed Ex., DE 110. The evidence presented suggests that Verizon FiOS’s top three tiers, namely 150/150 Mbps, 300/300 Mbps, and 500/500 Mbps, tr. 170:24-171:6, all provide faster download speeds than Cablevision’s fastest plan, and all five FiOS plans offer faster upload speeds than any of Cablevision’s. offerings. Tr. 98:12-15,120:6-122:8, 479:2-17. The parties have offered, in an exhibit filed under seal, the number of subscribers to each Verizon FiOS speed plan-examination of these figures reveals that a very small proportion of Verizon customers subscribe to the top three speed plans. Sealed Ex., DE 110.4

[44]*44The ability to deliver Internet speeds wirelessly is constrained by the speed of the router — an electronic device that transmits and receives data via radio signals to and from other WiFi enabled devices — supplied to or used by the customer. Tr. 65:2-66:5, 436:1. Verizon helpfully compared the router to the nozzle on the end of a garden hose — notwithstanding the capacity of the hose, it can only deliver the amount of water that can pass through the nozzle. Tr. 436:15-438:13. In 2014, a non-party Internet Service Provider that competes with Verizon in another geographic area began advertising that it offered the “fastest in home WiFi,” purportedly based upon the speed of its router. Tr. 174:20-175:7. In response, Verizon developed, and then offered to its customers (at an additional cost) the FiOS Quantum Gateway router, which can support “throughput” speeds up to the fastest FiOS tier (500/500Mbps). Tr. 174:20-175:18, 186:20-187:10, 221:24-225:4, 252:12. On or about January 18, 2015, following a speed test of its new router, Verizon began a campaign across television, digital, radio, print and direct marketing that FiOS provides the “fastest WiFi available from any provider.” Tr. 171:23-172:1,175:8-18, 243:1-3.

In a now-discontinued version of that advertising campaign, Verizon expressly predicated its “fastest WiFi” claim “on baseline maximum throughput speed results of 2014 Intertek router study.” See, e.g., CSC Ex. 9, 11; Tr. 186:8-13; 186:20-187:2; 453:8-9.

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119 F. Supp. 3d 39, 2015 U.S. Dist. LEXIS 107544, 2015 WL 4758072, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cablevision-systems-corp-v-verizon-new-york-inc-nyed-2015.