Dish Network 2002 Annual Report Download - page 26

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Pritikin and by Consumer Advocates, a nonprofit unincorporated association. The complaint alleges breach of express
warranty and violation of the California Consumer Legal Remedies Act, Civil Code Sections 1750, et seq., and the
California Business & Professions Code Sections 17500 & 17200. A hearing on the plaintiffs’ Motion for Class
Certification and our Motion for Summary Judgment was held during June 2002. At the hearing, the Court issued a
preliminary ruling denying the plaintiffs’ Motion for Class Certification. However, before issuing a final ruling on
Class Certification, the Court granted our Motion for Summary Judgment with respect to all of the plaintiffs’ claims.
Subsequently, we filed a Motion for Attorney’s Fees which was denied by the Court. The Plaintiffs filed a Notice of
Appeal of the Court’s Granting of our Motion for Summary Judgment and we Cross-Appealed the Court’s ruling on
our Motion for Attorney’s Fees. It is not possible to make a firm assessment of the probable outcome of the appeal or
to determine the extent of any potential liability or damages.
State Investigation
During April 2002, two state attorneys general commenced a civil investigation concerning certain of our
business practices. Over the course of the next six months, 11 additional states ultimately joined the investigation. The
states allege failure to comply with consumer protection laws based on our call response times and policies, advertising
and customer agreement disclosures, policies for handling consumer complaints, issuing rebates and refunds and
charging cancellation fees to consumers, and other matters. We have cooperated fully in the investigation and are
currently in settlement discussions with the states. It is not possible to determine the extent of any damages or
injunctive relief which could result in the event a settlement is not reached.
Retailer Class Actions
We have been sued by retailers in three separate purported class actions. During October 2000, two separate
lawsuits were filed in the Arapahoe County District Court in the State of Colorado and the United States District Court
for the District of Colorado, respectively, by Air Communication & Satellite, Inc. and John DeJong, et al. on behalf of
themselves and a class of persons similarly situated. The plaintiffs are attempting to certify nationwide classes on
behalf of certain of our satellite hardware retailers. The plaintiffs are requesting the Courts to declare certain provisions
of, and changes to, alleged agreements between us and the retailers invalid and unenforceable, and to award damages
for lost incentives and payments, charge backs, and other compensation. We intend to vigorously defend against the
suits and to assert a variety of counterclaims. The United States District Court for the District of Colorado stayed the
Federal Court action to allow the parties to pursue a comprehensive adjudication of their dispute in the Arapahoe
County State Court. John DeJong, d/b/a Nexwave, and Joseph Kelley, d/b/a Keltronics, subsequently intervened in the
Arapahoe County Court action as plaintiffs and proposed class representatives. We have filed a Motion for Summary
Judgment on all counts and against all plaintiffs. The plaintiffs have filed a Motion for Additional Time to Conduct
Discovery to enable them to respond to our motion. The Court has not ruled on either of the two motions. It is too
early to make an assessment of the probable outcome of the litigation or to determine the extent of any potential
liability or damages.
Satellite Dealers Supply, Inc. (“SDS”) filed a lawsuit in the United States District Court for the Eastern
District of Texas during September 2000, on behalf of itself and a class of persons similarly situated. The plaintiff was
attempting to certify a nationwide class on behalf of sellers, installers, and servicers of satellite equipment who contract
with EchoStar and who allege that we: (1) charged back certain fees paid by members of the class to professional
installers in violation of contractual terms; (2) manipulated the accounts of subscribers to deny payments to class
members; and (3) misrepresented, to class members, who owns certain equipment related to the provision of satellite
television service. During September 2001, the Court granted our Motion to Dismiss for Lack of Personal Jurisdiction.
The plaintiff moved for reconsideration of the Court’s order dismissing the case. The Court denied the Plaintiff’s
Motion for Reconsideration. The trial court denied our Motions for Sanctions against SDS. Both parties have now
perfected appeals before the Fifth Circuit Court of Appeals. It is not possible to make a firm assessment of the probable
outcome of the appeal or to determine the extent of any potential liability or damages.
PrimeTime 24 Joint Venture
PrimeTime 24 Joint Venture (“PrimeTime 24”) filed suit against us during September 1998 seeking damages
in excess of $10 million and alleging breach of contract, wrongful termination of contract, interference with contractual
relations, trademark infringement and unfair competition. We denied all of PrimeTime 24’s allegations and asserted