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Oregon-Idaho Utilities, Inc. v. Skitter Cable TV, Inc.

United States District Court, D. Idaho

August 9, 2017

OREGON-IDAHO UTILITIES, INC., an Oregon corporation, and MEDIASNAP SOLUTIONS, LLC, a Delaware limited liability company, Plaintiffs,
v.
SKITTER CABLE TV, INC., a Georgia corporation; SKITTER, INC., a Georgia corporation; GALVA CABLE COMPANY LLC, a Georgia limited liability company; SOUTHEAST CONTENT GROUP, LLC, a Georgia limited liability company; TBM CONTENT PARTNERS, LLC, a Georgia limited liability company; VIDEO 6 LLC, a Missouri limited liability company; KINGDOM TELEPHONE COMPANY, a Missouri telephone corporation, and ROBERT SAUNDERS, an individual; Defendants.

          MEMORANDUM DECISION AND ORDER

          Edward J. Lodge United States District Judge.

         Before the Court in the above entitled matter are: (1) the Skitter Defendants' Motion for Change of Venue (Dkt. 24); (2) Defendant Robert Saunders' Motion to Transfer Venue (Dkt. 27); (3) Defendant Video 6 LLC's Motion to Dismiss (Dkt. 29); and (4) Plaintiffs' Motion to Amend the Complaint (Dkt. 44). All four motions have been fully briefed and are ripe for the Court's consideration. However, in the interest of judicial efficiency, the Court will address only the Skitter Defendants Motion for Change of Venue (Dkt. 24) and Defendant Saunders' Motion to Transfer Venue (Dkt. 27) (collectively “Venue Motions”).

         Having fully reviewed the record, the Court finds that the facts and legal arguments are adequately presented in the briefs and record. Accordingly, in the interest of avoiding further delay, and because the Court conclusively finds that the decisional process would not be significantly aided by oral argument, the Venue Motions are hereby decided on the record before this Court without oral argument.

         INTRODUCTION

         As explained more fully below, the Court hereby grants the Venue Motions. All of the claims in this case arise from a Franchise Agreement between Defendant Skitter Cable TV, Inc. (“Skitter Cable TV”) and Plaintiffs Oregon-Idaho Utilities, Inc. (“OIU”) and MediaSnap Solutions, LLC.[1] This Franchise Agreement included a forum-selection clause in which the parties agreed that any litigation brought by either party against the other in connection with any rights or obligations arising out of the Franchise Agreement would be instituted in either Georgia state court in Gwinnett County or the United States District Court for the Northern District of Georgia. In addition, all of the Defendants have now consented to the change in venue. (Dkts. 24, 27, 30, 32). Thus, for the convenience of the parties and in the interest of justice, the Court will transfer the case to the Northern District of Georgia pursuant to 28 U.S.C. § 1404(a) for all future proceedings.

         BACKGROUND

         The following allegations are derived from the original Complaint filed in this action on June 6, 2016 (Dkt. 1), unless otherwise specifically noted.

         1. Parties

         Plaintiffs are OIU and Mediasnap Solutions, LLC (“Mediasnap”). Defendants are: (1) Skitter Cable TV; (2) Skitter, Inc.; (3) Galva Cable Company, Inc. (“Galva Cable”); (4) Southeast Content Group, LLC (“Southeast Content Group”); (5) TBM Content Partners, LLC (“TBM Content Partners”); (6) Video 6 LLC (“Video 6”); (7) Kingdom Telephone Company; and (8) Robert Saunders.

         Defendant Skitter Cable TV is a wholly-owned subsidiary of Defendant, Skitter, Inc. Defendants Galva Cable; Southeast Content Group, LLC; and TBM Content Partners are also subsidiaries of Skitter, Inc. (Dkt. 25.) Collectively, these Defendants are referred to herein as the “Skitter Defendants.” All of the Skitter Defendants are either Georgia corporations or Georgia limited liability companies. The Skitter Defendants are represented jointly by counsel and together filed one of the Venue Motions. (Dkt. 24.)

         Defendant Kingdom Telephone Company is a Missouri telephone company and, like OIU, was a franchisee of Skitter Cable TV. Kingdom Telephone solicited funds from other franchisees ostensibly to help the Skitter Defendants meet operating expenses. In addition, Kingdom Telephone was instrumental in the formation of Defendant Video 6, which was created and used to infuse cash into the Skitter Defendants and exert control over the Skitter Defendants' business decisions.

         Defendant Robert Saunders is an individual resident of Georgia and the Chief Executive Officer of Skitter Cable TV and Skitter, Inc. Plaintiffs believe Mr. Saunders is an officer or member of and serves in various leadership capacities in the Skitter Defendants as well as Defendant Video 6.

         2. General Allegations

         OIU is a provider of telephone public utility services in parts of Oregon and Idaho. In 2007, OIU began offering broadband DSL services in Idaho, Oregon, and Nevada. Sometime thereafter, OIU began considering its options for offering its rural customer base internet TV services.

         Ultimately, on or about June 5, 2012, OIU and Skitter Cable TV entered a Franchise Agreement. OIU entered the Franchise Agreement based on Skitter Cable TV's representations that it had a working platform that would enable OIU to provide its customers with a full television channel line-up, including local and satellite channels.

         The Franchise Agreement states that it is between OIU and Skitter Technologies, Inc. However, it is undisputed that in September 2014, Skitter Technologies, Inc. changed its name to Skitter Cable TV. In addition, on June 6, 2012, Plaintiff OIU assigned its rights and obligations under the Franchise Agreement to Plaintiff MediaSnap, which was formed specifically for the purpose of operating OIU's Skitter Cable TV franchise.

         In the Franchise Agreement, the parties agreed to a forum selection clause requiring them to institute any litigation “in connection with any rights or obligations arising out of this Agreement” in either Qwinnett County, Georgia or the United States District Court for the North District of Georgia, Atlanta Division. (Dkt. 1-1.) The parties further agreed that “[t]he validity and effect of this [Franchise] Agreement are to be governed by and construed and enforced in accordance with the laws of the State of Georgia.” Id.

         Plaintiffs allege that the Skitter Defendants and Defendant Saunders made various ongoing misrepresentations of fact and other false statements in the course of their dealings with Plaintiffs between June 2012 and May 2016. (Dkt. 44-2.) These misrepresentations induced Plaintiffs to: (1) enter the Franchise Agreement; (2) wire $295, 000 to the Skitter Defendants for the equipment, services, and content promised in the Franchise Agreement; (3) purchase various equipment; and (4) not cancel the Franchise Agreement and request a full refund. In addition, the Skitter Defendants misrepresented their financial standing and requested repeated infusions of cash to help them continue operations and meet their obligations under the Franchise Agreement.

         Plaintiffs allege conspiracy and enterprise theories of liability connecting the conduct of all of the Defendants together. This includes making false statements, soliciting funds, and managing the Skitter Defendants in such a way that Plaintiffs were deprived of the benefit of the bargain they had agreed to as outlined in the Franchise Agreement.

         Ultimately, on April 6, 2016, Defendant Saunders sent Plaintiffs a letter terminating the Franchise Agreement “[e]ven though [the Skitter Defendants] and Video 6 failed to perform their obligations under the Franchise Agreement.” (Dkt. 1, ¶ 115.) On or about May 1, 2016, Defendants shut off all Skitter Cable TV services provided through Plaintiffs' franchise and pursuant to the Franchise Agreement.

         3. Claims

         Plaintiffs bring seven claims in the Complaint. These include:

• Breach of contract (against the Skitter Defendants),
• Breach of the covenant of good faith and fair dealing (against the Skitter Defendants),
• Fraud (against the Skitter Defendants and Robert Saunders),
• Tortious Interference with Contract (against Video 6),
• Unjust Enrichment (against all Defendants),
• Racketeering Activity in violation of Idaho Code § 18-7804 (against ...

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