Dish Network 2014 Annual Report Download - page 165

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-59
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which, as noted above, has been withdrawn.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.
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, which, on May 2, 2014, was
consolidated with the Jacksonville PFPF action. On December 13, 2013, City of Daytona Beach Police Officers
and Firefighters Retirement System voluntarily dismissed its claims without prejudice. On March 28, 2014, Iron
Workers District Council (Philadelphia and Vicinity) Retirement and Pension Plan voluntarily dismissed its claims
without prejudice.
On July 25, 2014, Jacksonville PFPF filed a second amended complaint, which added claims against George R.
Brokaw and Charles M. Lillis, as Director Defendants, and Thomas A. Cullen, R. Stanton Dodge and K. Jason
Kiser, as officers of the Company. Jacksonville PFPF asserted five claims in its second amended complaint, each of
which alleged breaches of the duty of loyalty. Three of the claims were asserted solely against Mr. Ergen; one
claim was made against all of the remaining Director Defendants, other than Mr. Ergen and Mr. Clayton; and the
final claim was made against Messrs. Cullen, Dodge and Kiser.
Our Board of Directors has established a Special Litigation Committee to review the factual allegations and legal
claims in these actions. On October 24, 2014, the Special Litigation Committee filed a report in the District Court
for Clark County, Nevada regarding its investigation of the claims and allegations asserted in Jacksonville PFPF’s
second amended complaint. The Special Litigation Committee filed a motion to dismiss the action based, among
other things, on its determination that it is in the best interests of the Company not to pursue the claims asserted by
Jacksonville PFPF. The Director Defendants and Messrs. Cullen, Dodge and Kiser have also filed various motions
to dismiss the action. The Court will hold a hearing on the Special Litigation Committee’s and the defendants’
motions on May 14, 2015. 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
second amended complaint in the 2011 Action that added us as a defendant, among others, in which it asserted the
555 patent and the 689 patent against us. On September 21, 2012, Norman served us with preliminary infringement
contentions related to the 555 patent and the 689 patent, as well as the 597 patent, which outlined Norman’s claims
with respect to certain DISH products. On February 8, 2013, Norman filed a third amended complaint in the 2011