New York Supreme Court Judge Richard Lowe III continues to hammer Dish Network as it prepares to mount a defense in AMC Networks’ $2.5B breach of contract suit involving the now-defunct VOOM HD networks. The judge said today that Dish must allow investigators to examine internal information, according to an account of the proceedings from Susquehanna Financial Group’s Thomas Claps. Dish “has no credibility” with the court, Lowe said following rulings in which he charged that the satellite distributor destroyed evidence and tried to delay the current case long enough to create a mistrial.
He agreed to VOOM’s motion requiring Dish to let auditors check its hard drives and IT system to see whether it destroyed a 2006 draft audit report of VOOM. If it did, then the judge could penalize Dish — possibly even deciding the case for VOOM. If investigators come up empty, then VOOM must pay for the examination. In addition, Dish must let auditors check its high-definition subscriber database to see whether the company correctly reported that just 40% of its current customers receive an HD service. If it’s wrong and the actual number is closer to the national average of around 70%, then that could add $1B to the damages that could be awarded to AMC and its former parent, Cablevision.
The trial will determine whether Dish had the right in 2008 to terminate its 15-year deal to air the VOOM Networks suite of HD channels. The channels, formerly owned by Cablevision, were packaged with AMC when the cable company spun off the network operation this year.