Dish Network Corp. v. Arrowood Indemnity Co.
772 F.3d 856
| 10th Cir. | 2014Background
- Dish (EchoStar) purchased CGL primary (Arrowood, Travelers) and excess/umbrella (XL, Arch, National Union) policies (2001–2004) that cover "advertising injury" but contain exclusions for insureds in the business of "advertising, broadcasting, publishing or telecasting."
- RAKTL sued Dish in N.D. Cal. for patent infringement relating to interactive telephone systems used for customer service and pay-per-view ordering; Dish tendered defense; insurers denied coverage.
- District court originally granted summary judgment to insurers; Tenth Circuit reversed in Dish I, holding patent infringement can, in some circumstances, constitute "advertising injury" and remanded for issues the district court had not addressed.
- On remand insurers raised additional defenses (business/broadcasting exclusions, Arch intellectual-property exclusion, National Union "sole causation," exhaustion/drop-down issues for excess insurers); district court allowed new motions and granted summary judgment to insurers, finding Dish was primarily in broadcasting/telecasting and thus excluded.
- Tenth Circuit on this appeal affirmed: remand scope did not bar new insurer defenses; broadcasting/telecasting exclusions applied; National Union’s sole-causation and XL’s drop-down analysis foreclosed coverage; Dish not entitled to fees/damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of remand / law of the case | DISH: Dish I already decided duty-to-defend; district court could not allow new defenses on remand | Insurers: Dish I remanded certain unresolved issues; district court may consider other defenses not expressly decided | Court: Dish I did not finally decide duty-to-defend; mandate did not bar district court from entertaining additional insurer defenses on remand; no violation of mandate or law of the case |
| Business-exclusion ("broadcasting/telecasting") interpretation | DISH: Terms must require public, free distribution; subscription satellite service is "non-broadcast" and not excluded | Insurers: "Broadcasting/telecasting" construed by common meaning (transmission) includes Dish’s satellite transmissions; exclusion aims at mass-media risk irrespective of subscription model | Court: Adopted ordinary definitions (synonymous with transmission); subscription/pay-for-service falls within common meaning; exclusions apply and preclude advertising-injury coverage |
| Excess/umbrella issues (XL drop-down; National Union sole-causation) | DISH: XL must "drop down" to defend when primary wrongfully denies; National Union provisions should be construed for coverage | Insurers: XL’s policy limits drop-down; Exclusion O and policy structure preclude drop-down where underlying not liable; National Union requires injury "arising solely out of" advertising (sole-causation) and no coverage here | Court: XL had no duty to drop down because underlying policies provide no coverage; National Union’s provisions harmonized to require offense in course of advertising that is sole cause of injury—requirement not met—no coverage |
| Damages, costs, attorneys’ fees | DISH: Insurers’ wrongful denial forced Dish to defend RAKTL and pursue coverage action; Dish entitled to consequential damages and fees | Insurers: No duty to defend, so no liability for defense costs or fees | Court: Because no insurer had duty to defend, Dish not entitled to damages, costs, or attorneys’ fees |
Key Cases Cited
- DISH Network Corp. v. Arch Specialty Ins. Co., 659 F.3d 1010 (10th Cir. 2011) (patent infringement can constitute advertising injury; remand instructions)
- Dobbs v. Anthem Blue Cross & Blue Shield, 600 F.3d 1275 (10th Cir. 2010) (law-of-the-case principle and district court obligations on remand)
- United States v. West, 646 F.3d 745 (10th Cir. 2011) (scope of mandate on remand and district court discretion)
- Procter & Gamble Co. v. Haugen, 317 F.3d 1121 (10th Cir. 2003) (mandate controls remand scope; district court may consider issues not expressly disposed of)
- Novell, Inc. v. Federal Ins. Co., 141 F.3d 983 (10th Cir. 1998) (analysis of advertising-injury coverage)
- Cyprus Amax Minerals Co. v. Lexington Ins. Co., 74 P.3d 294 (Colo. 2003) (Colorado law on advertising-injury coverage)
- Mountain States Mut. Cas. Co. v. Roinestad, 296 P.3d 1020 (Colo. 2013) (de novo review of insurance contract interpretation)