Weekly Update

How far could the Supreme Court go in Aereo?

Six months ago, Aereo’s bet that its business model would ultimately be upheld by the courts was looking pretty good. It had its resounding victory in the Second Circuit Court of Appeals to lean on, which in turn rested on the same court’s 2008 holding in Cartoon Network LP v. CSC Holdings Inc., better known as Cablevision, giving Aereo an impressive case-law pedigree.

Though broadcasters continued to bring cases outside the jurisdiction of the Second Circuit Aereo was until recently batting 1.000, even as its competitor, FilmOn X, suffered a series of legal setbacks. So when the broadcasters appealed the Second Circuit ruling to the Supreme Court, it made sense for Aereo to double down on its bet and ask the court to take the case.

With oral arguments before the Supreme Court less than two months away, however, the legal ground beneath Aereo has seemingly gotten shakier. Two separate district court opinions in September that went against FilmOn X, in Washington, DC, and New York, were critical of the Second Circuit’s ruling in Aereo, while last month brought the first court ruling against Aereo when a federal district judge in Salt Lake City granted the broadcasters’ request for an injunction barring Aereo from operating in all or part of eight Western states within the Tenth Circuit. What once seemed like a rock-solid precedent from the Second Circuit court increasingly looks like an outlier.

The opinion by the judge in the Salt Lake City case, Dale Kimball, was particularly hard on the Second Circuit, criticizing its reasoning not only in the Aereo case but in the Cablevision case on which the appellate court’s opinion in Aereo rests and which provided the blueprint for the design of Aereo’s system.

The Cablevision court’s analysis also appears to have changed the wording of the Transmit Clause from reading “members of the public capable of receiving the performance” to “members of the public capable of receiving the transmission.” See Cablevision, 536 F.3d at 134. Therefore, instead of examining whether the transmitter is transmitting a performance of the work to the public, the Cablevision court examined who is capable of receiving a particular transmission. See id. at 135. This court agrees with Plaintiffs that the language of the Transmit Clause does not support such a focus…

This court is also not persuaded by the Second Circuit’s subsequent application of its Cablevision decision to Aereo’s system. See WNET v. Aereo, Inc., 712 F.3d 676 (2d Cir. 2013). The court finds Judge Chin’s dissenting opinion more persuasive than the majority opinion. As Judge Chin explained, there are “critical differences” between Aereo’s situation and the cable company in Cablevision: “Cablevision involved a cable company that paid statutory licensing and retransmission consent fees for the content it retransmitted, while Aereo pays no such fees. Moreover, the subscribers in Cablevision already had the ability to view television programs in real-time through their authorized cable subscriptions, and the remote digital video recording service at issue there was a supplemental service that allowed subscribers to store that authorized content for later viewing. In contrast, no part of Aereo’s system is authorized. Instead, its storage and time-shifting functions are an integral part of an unlicensed retransmission service that captures broadcast television programs and streams them over the Internet.” Id. at 697 (Chin, J., dissenting).

The cable company in Cablevision was licensed to transmit the performance to its paying customers, who in turn decided to record the performance for later viewing. The Cablevision court’s decision that the customer’s subsequent viewing of the recording was a private viewing is not akin to Aereo’s interception and retransmission of copyrighted programs to paying subscribers. “What Aereo is doing is not in any sense ‘private.’” Id. at 699 (Chin, J., dissenting). This court agrees with Judge Chin that “[b]y any reasonable construction of the statute, Aereo is engaging in public performances” when it intercepts and retransmits copyrighted programs to paying strangers. Id

The citations to Judge Denny Chin’s blistering dissent in Aereo are an especially exquisite twist of the knife.

The pushback from lower courts on both Cablevison and Aereo has been joined by a growing chorus of scholarly criticism of the Second Circuit’s reasoning and conclusions, including in treatises and blog posts by Columbia University Law professor Jane Ginsburg, a prominent copyright scholar who also happens to be the daughter of Supreme Court Justice Ruth Bader Ginsburg.

In framing their case to the Supreme Court, the broadcasters did their best to draw the justices attention to the growing body of work and opinions at odds with the Second Circuit, even cheekily quoting from Jane Ginsburg’s articles on Cablevision and Aereo.

The Supreme Court, of course, is not bound by earlier rulings or precedents, and it’s impossible to know how much weight, if any, the justices will give to the anti-Aereo-vision critique. But what once seemed like a long-shot now seems at least marginally more plausible.

A ruling against Aereo and an opinion calling into question any broader application of Cablevision outside the Second Circuit, at this point, might fall more squarely in line with mainstream legal thought than one that comes out the other way.

Aereo’s reply brief is due March 26. Oral argument is set for April 22.