Yong Ki Hong v. KBS America, Inc.
951 F. Supp. 2d 402
E.D.N.Y2013Background
- Plaintiffs Hong and Hwan Media bought a Brooklyn video store (the Shilla store), then relocated it to Queens (the Samsung store) and continued distributing KBS programming via weekly master tapes previously supplied by defendant KBS America (KBSA).
- KBSA ceased supplying KBS tapes to the Samsung store in December 2004; KBSA says the owners violated an oral, site‑specific license by moving and by non‑walk‑in distribution; plaintiffs say KBSA had orally approved the move and the license transferred.
- Plaintiffs allege a scheme among local store owners (led by Kim and Kong) to fix retail rental prices at $1.50 and that KBSA, at the stores’ urging, cut supply to punish plaintiffs for charging $1.00; plaintiffs assert Sherman Act §§1 and 2, Donnelly Act, NY GBL §349, tort and contract claims.
- KBSA and C.J. Lee counterclaimed for copyright infringement and for defamation (libel/slander per se) based on plaintiffs’ statements to press, a letter to KBSA’s CEO, and complaints filed with Korean authorities; KBSA asserts it (or its parent) was the exclusive North American licensee for KBS content.
- Court granted summary judgment to defendants on all plaintiffs’ claims except three tortious‑interference claims against Kong, Spring Video, and Kim; denied KBSA summary judgment on its copyright counterclaim; granted counterclaim defendants summary judgment on libel/slander claims after searching the record.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Antitrust standing under Sherman Act §§1 & 2 | Plaintiffs lost profits when KBSA cut supply to punish refusal to join price‑fixing; this is antitrust injury. | Plaintiffs' injury is lost profits of a competitor/customer, not higher prices to consumers; thus no antitrust standing. | No antitrust standing; summary judgment for defendants on Sherman Act claims. |
| State antitrust (Donnelly Act) | Same theory as federal antitrust; Donnelly Act should apply. | Donnelly Act follows federal precedent; same standing limits apply. | Dismissed for same reasons as Sherman Act. |
| NY GBL §349 (Deceptive Practices Act) | KBSA and store owners concealed price‑fixing; consumer deception caused injury. | Price‑fixing is not necessarily deceptive to consumers; no evidence of materially misleading conduct. | §349 claim dismissed—no evidence of consumer‑oriented, materially misleading conduct. |
| Tortious interference with contracts/prospective relations | Defendants knowingly procured breach/interfered with plaintiffs’ customer relationships. | No evidence of existing contracts with customers or that defendants knew of specific relationships. | Most interference claims dismissed for lack of contract, knowledge, or breach; three claims vs. Kong, Spring Video, Kim denied summary judgment (remain). |
| Promissory estoppel / Statute of Frauds | KBSA orally promised supply if plaintiffs bought the store; plaintiffs relied and invested. | Oral agreement was indefinite (Statute of Frauds) or terminable at will; no unconscionable injury to avoid Statute. | Promissory estoppel barred by Statute of Frauds; claim dismissed. |
| Unjust enrichment | Remedy for same underlying antitrust wrongs; recover for losses. | Plaintiffs lack antitrust standing; cannot recast antitrust claim as unjust enrichment. | Unjust enrichment dismissed. |
| KBSA copyright counterclaim | KBSA: exclusive North America licensee; Samsung owners copied/distributed without authorization. | Plaintiffs: genuine dispute whether KBSA’s license was exclusive and whether plaintiffs’ oral license/authority allowed use. | Genuine disputes of material fact exist on exclusivity and license terms; summary judgment denied to KBSA on copyright claim. |
| KBSA defamation counterclaims | Statements to press, CEO letter, and Blue House complaints falsely accused KBSA/C.J. Lee and harmed reputation. | Many statements were opinion or protected by privilege (qualified or absolute for quasi‑judicial/administrative complaints). | Court denied KBSA’s motion but, after searching the record, granted summary judgment for plaintiffs/counterclaim defendants on libel/slander claims (statements were opinions or privileged). |
Key Cases Cited
- Gatt Communications, Inc. v. PMC Associates, L.L.C., 711 F.3d 68 (2d Cir. 2013) (antitrust‑standing framework; lost profits of a competitor/customer do not alone confer antitrust standing)
- Associated Gen. Contractors of Calif. v. California State Council of Carpenters, 459 U.S. 519 (U.S. 1983) (factors for antitrust standing)
- Brunswick Corp. v. Pueblo Bowl‑O‑Mat, Inc., 429 U.S. 477 (U.S. 1977) (antitrust injury must flow from the violation that makes the act unlawful)
- G.K.A. Beverage Corp. v. Honickman, 55 F.3d 762 (2d Cir. 1995) (distributor lacked §2 standing for injuries derivative of supplier’s monopoly)
- Eden Toys, Inc. v. Florelee Undergarment Co., Inc., 697 F.2d 27 (2d Cir. 1982) (only copyright owners or exclusive licensees may sue for infringement)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary judgment standard)
- Howell v. New York Post Co., 81 N.Y.2d 115 (N.Y. 1993) (rigorous standard for intentional infliction of emotional distress)