Opinion
Civil Action No. 00-WY-2507-CB
January 23, 2001
ORDER ON PLAINTIFF'S MOTION FOR TEMPORARY RESTRAINING ORDER IN THE FORM OF A MANDATORY INJUNCTION AND PROHIBITORY INJUNCTION
This case involves a contract dispute arising from the sale of radio stations and their assets. Plaintiff seeks mandatory and injunctive relief, and specific performance. In particular, Plaintiff seeks possession of or, in the alternative, access to the market research database ("the Database") prepared by Defendant Media Strategies, Inc. for Defendant AMFM, Inc. under an agreement dated July 26, 1999 ("Database Agreement").
Although Plaintiff represented at oral argument that it was only seeking a temporary restraining order ("TRO"), the Court will consider this order to be a combined ruling on both TRO and preliminary injunction requests with regards to the Database and Database Agreement. After reading the briefs, hearing oral arguments, and being fully advised on the premises, the Court FINDS and ORDERS as follows:
Statement of the Parties and Jurisdiction
Plaintiff Emmis Communications Corporation ("Emmis") is an Indiana corporation with its principal place of business in Indianapolis, Indiana. Defendant Media Strategies, Inc. ("MSI") is a Texas corporation with its principal place of business in Austin, Texas. Defendants AMFM, Inc. ("AMFM") and Clear Channel Communications, Inc. ("Clear Channel") are both Texas corporations with their principal places of business in San Antonio, Texas.
For the purposes of this order, the Court presumes diversity jurisdiction has been properly invoked pursuant to 28 U.S.C. S 1332.
Background
On July 26, 1999, Defendant AMFM contracted with Defendant Media Strategies to create the Database, a listing of approximately 87,000 research-friendly, radio-listening households in the Denver area. AMFM paid approximately $770,000.00 for this service.
The Database was intended to assist AMFM in promoting its Denver area stations among households with the greatest likelihood of revealing their listening habits to the Arbitron Company, a radio ratings service. Arbitron uses the information to extrapolate ratings and market share statistics for individual stations. These statistics are used by stations to, among other things, set advertising rates.
By targeting Database households with special promotions, AMFM hoped to increase its stations' listenership among those households, thereby increasing its Arbitron ratings share in the Denver market. At the time of the Database Agreement, AMFM owned six Denver radio stations: KXPK-FM, KALC-FN, KVOD-AM, KIMN-FM, KDJM-FM, and KXKL-FM.
In October of 1999, AMFM entered into an Agreement and Plan of Merger with Defendant Clear Channel, Inc. The merger would involve media outlets in a number of cities, and according to the parties constituted the largest such merger ever concluded. In order to effectuate the merger, the companies were required by the Federal Communications Commission and the U.S. Department of Justice to divest themselves of broadcast stations and assets, including two radio stations in the Denver area: KXPK-FM and KALC-FM.
Two series of transactions occurred as a result of the federal divestiture order that are relevant to this case. In the first, AMFM sold KALC-FM to Salem Communications, Inc. (a non-party) who in turn sold KALC-FM to Emmis. The sale to Salem was consummated through an Asset Purchase Agreement on March 5, 2000, which closed on August 24, 2000. Salem sold KALC-FM to Linmis under an Asset Purchase Agreement dated September 14, 2000, with a closing date of January 8, 2001.
In the second series of transactions, AMEM sold KXPK-FM directly to Emmis. An Asset Purchase Agreement was entered into between AMEM and Emmis on June 19, 2000, closing on August 24, 2000.
Plaintiff here asks the Court to compel Defendants to turn over a database of media research conducted in the Denver radio market ("the Database"). According to Plaintiff, the Database research was conducted to improve the market performance of KALC-FM and KXPK-FM, and because the information gathered was the property of the stations, it now belongs to Plaintiff.
Standard of Review
Issuance of a temporary restraining order is subject to the court's discretion. Hinkel Dry Goods Co. v. Wichison Indus. Gas Co., 64 F.2d 881, 883 (10th Cir. 1933). Where the opposing party has notice, the procedure and standards for issuance of a temporary restraining order mirror those for a preliminary injunction. 11A Charles Alan Wright, Arthur Miller Mary Kay Kane, Federal Practice and Procedure § 2951. (2d ed. 1995). Application for a preliminary injunction requires:
(1) the movant will suffer irreparable harm unless the injunction issues; (2) there is a substantial likelihood the movant ultimately will prevail on the merits; (3) the threatened injury to the movant outweighs any harm the proposed injunction may cause the opposing party; and (4) the injunction would not be contrary to the public interest.ACLU v. Johnson, 194 F.3d 1149, 1155 (10th Cir. 1999). If an injunction would "alter the status quo," the above factors must aweigh heavily and compellingly" in the movant's favor. SCFC ILC, Inc. v. Visa USA. Inc., 936 F.2d 1096, 1098-99 (10th Cir. 1991). This is especially true where "the relief sought would in effect grant plaintiff a substantial part of the relief it would obtain after a trial on the merits." GTE Corp. v. Williams, 731 F.2d 676, 679 (10th Cir. 1984). A preliminary injunction is an extraordinary remedy, so "the right to relief must be clear and unequivocal." Kansas Health Care Ass'n, Inc. v. Kansas Dept. of Soc. and Rehab. Servs., 31 F.3d 1536, 1543 (10th Cir. 1994).
Analysis
As a preliminary matter, the relief asked for here is substantially the same relief Plaintiff seeks in its complaint. Giving Emmis possession of, or access to, the Database would leave them with little else to request after a trial on the merits. To that extent, Plaintiff must show that on balance, each of the four factors listed above weigh heavily and compellingly in its favor.
The first of the factors, irreparable harm, presents a near-Herculean task for the Plaintiff in this case. The harm must be significant, and must result not from Defendants' actions as alleged in the complaint, but from a denial of injunctive relief by this Court. Wright, Miller Kane,supra § 2948.1.
Plaintiff contends denial of the Database would cause immediate and irreparable harm by:
[I]mpairing KALC's and KXPK's ability to target marketing, promotions and programming to research-friendly households in the Denver NSA in order to increase Arbitron ratings, market share and advertising revenues; causing Emmis to suffer the consequences of radio stations owned by Clear Channel in the Denver NSA using the Database to target research-friendly households with marketing and promotions with the ultimate affect [sic] of attracting likely Arbitron diary keepers to listen to Clear Channel stations and to not listen to KALC and/or KXPK, thus decreasing KXPK and KALC's Arbitron ratings relative to the Arbitron ratings of the Clear Channel stations.
(Pl's. Hot. for T.R.O. in the Form of a Mandatory Inj. and Prohibitory Inj. ¶ 68) In essence, Plaintiff argues that without the Database, Plaintiff's radio stations will not be able to use that information during the upcoming Arbitron ratings period, whereas Defendants' stations will.
Unfortunately for Plaintiff, a showing of irreparable harm requires more. Irreparable harm is generally characterized by a condition that cannot be corrected through the award of money damages. See Wright, Miller, and Kane, supra § 2948.1; Restatement 2d of Contracts § 359(1)(1981). As was repeatedly established at the hearing, the true impact of being denied access to the Database can only be measured in the effect it has on ratings share and, by extension, advertising revenues.
Plaintiff has failed to show with certainty any adverse effects resulting from lack of access to the Database. Indeed, it is entirely possible that ratings for KALC-FM and KPXK-FM may increase during this ratings period even without the Database. But to the extent that any harm is demonstrable solely through lost revenues, that harm is compensable. After a successful showing on the merits, Plaintiff would be entitled to damages equal to any decrease in revenues attributable to the loss of Database access.
It is also difficult to consider Plaintiff's asserted harm as irreparable considering the availability of alternatives to the Database. The ease of suitable substitute performance that can be paid for out of money damages militates against the award of injunctive relief. Restatement 2d of Contracts § 359(1). After repeated questioning, both counsel and witnesses for Plaintiff failed to explain why a newer (and therefore more effective) database could not be compiled and the cost levied against Defendants in the event of a favorable verdict for Plaintiff.
Because the purpose of the Database information is to boost Arbitron ratings, the case of Arbitron Co. v. Phoenix Broadcasting Corp., 1997 WL 452020, is instructive. There the court held injunctive relief inappropriate to prevent a radio station from being completely delisted by Arbitron, since the station could "commission a (different] ratings company to perform a customer survey of the station's audience," and thereby "ameliorate or eliminate the irreparable harm it claims it will suffer from delisting." Arbitron Co. v. Phoenix Broad. Corp., 1997 WL 452020, *5 (S.D.N.Y. 1997). This Court considers Emmis to be similarly situated.
Issuance of a temporary restraining order or preliminary injunction is an extraordinary and drastic remedy. U.S. ex rel. Citizen Band Potawatomi Indian Tribe v. Enter. Mgmt. Consultants. Inc., 883 F.2d 886, 888 (10th Cir. 1989). Because Plaintiff has failed to make an adequate showing of irreparable harm, this Court need not consider the other factors of ACLU v. Johnson, 194 F.3d at 1155. Injunctive relief is not warranted.
Conclusion
THEREFORE this Court hereby ORDERS that Plaintiff's MotionFor Temporary Restraining Order In The Form of A Mandatory Injunction And Prohibitory Injunction, as well as any congruent preliminary injunction be DENIED.
Dated this 23rd day of January, 2001.