Dish Network 2013 Annual Report Download - page 58

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trial on January 9, 2014, which concluded on January 17, 2014. The parties are in the process of post-trial briefing
and a hearing for closing arguments has been set for March 12, 2014.
We intend to vigorously defend this proceeding and cannot predict with any degree of certainty the outcome of this
proceeding or determine the extent of any potential liability or damages.
LightSquared Transaction Shareholder Derivative Actions
On August 9, 2013, a purported shareholder of the Company, Jacksonville Police and Fire Pension Fund
(“Jacksonville PFPF”), filed a putative shareholder derivative action in the District Court for Clark County, Nevada
alleging, among other things, breach of fiduciary duty claims against the members of the Company’s Board of
Directors as of that date: Charles W. Ergen; Joseph P. Clayton; James DeFranco; Cantey M. Ergen; Steven R.
Goodbarn; David K. Moskowitz; Tom A. Ortolf; and Carl E. Vogel (collectively, the “Director Defendants”). In its
operative amended complaint, Jacksonville PFPF claims that Mr. Ergen breached his fiduciary duty to the Company
in connection with certain purchases of LightSquared debt by SPSO, an entity controlled by Mr. Ergen, and that the
other Director Defendants aided and abetted that alleged breach of duty. The Jacksonville PFPF claims allege that
(1) the debt purchases created an impermissible conflict of interest and (2) put at risk the LBAC Bid, which as noted
above has been withdrawn. Jacksonville PFPF further claims that most members of the Company’s Board of
Directors are beholden to Mr. Ergen to an extent that prevents them from discharging their duties in connection with
the Company’s participation in the LightSquared bankruptcy auction process. Jacksonville PFPF is seeking an
unspecified amount of damages. Jacksonville PFPF dismissed its claims against Mr. Goodbarn on October 8, 2013.
Jacksonville PFPF sought a preliminary injunction that would enjoin Mr. Ergen and all of the Director Defendants
other than Mr. Goodbarn from influencing the Company’s efforts to acquire certain assets of LightSquared in the
bankruptcy proceeding. On November 27, 2013, the Court denied that request but granted narrower relief enjoining
Mr. Ergen and anyone acting on his behalf from participating in negotiations related to one aspect of the LBAC Bid,
which as noted above has been withdrawn.
Five alleged shareholders have filed substantially similar putative derivative complaints in state and federal courts
alleging the same or substantially similar claims. On September 18, 2013, DCM Multi-Manager Fund, LLC filed a
duplicative putative derivative complaint in the District Court for Clark County, Nevada, which was consolidated
with the Jacksonville PFPF action on October 9, 2013. Between September 25, 2013 and October 2, 2013, City of
Daytona Beach Police Officers and Firefighters Retirement System, Louisiana Municipal Police Employees’
Retirement System and Iron Worker Mid-South Pension Fund filed duplicative putative derivative complaints in the
United States District Court for the District of Colorado. Also on October 2, 2013, Iron Workers District Council
(Philadelphia and Vicinity) Retirement and Pension Plan filed its complaint in the United States District Court for
the District of Nevada. None of the plaintiffs in these actions is seeking a preliminary injunction.
On October 11, 2013, Iron Worker Mid-South Pension Fund dismissed its claims without prejudice. On October 30,
2013, Louisiana Municipal Police Employees’ Retirement System dismissed its claims without prejudice and, on
January 2, 2014, filed a new complaint in the District Court for Clark County, Nevada. On December 13, 2013, City
of Daytona Beach Police Officers and Firefighters Retirement System voluntarily dismissed its claims without
prejudice. The United States District Court for the District of Nevada has stayed the action by Iron Workers District
Council (Philadelphia and Vicinity) Retirement and Pension Plan until April 16, 2014.
Our Board of Directors has established a Special Litigation Committee to review the factual allegations and legal
claims in these actions. We cannot predict with any degree of certainty the outcome of these suits or determine the
extent of any potential liability or damages.
Norman IP Holdings, LLC
On September 15, 2011, Norman IP Holdings, LLC (“Norman”) filed a patent infringement complaint (the “2011
Action”) against Lexmark International Corporation (“Lexmark”) and Brother International Corporation
(“Brother”), in the United States District Court for the Eastern District of Texas, alleging infringement of United
States Patent Nos. 5,592,555 (the “555 patent”), 5,530,597 (the “597 patent”) and 5,502,689 (the “689 patent”) by
Lexmark, and infringement of the 555 patent and the 689 patent by Brother. On January 27, 2012, Norman filed a