DirecTV Latin America v. RCTV International

NEW YORK COUNTY
Contracts

New York Law Journal

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Justice Shirley Werner Kornreich

Subscription television provider DirecTV Latin America (DTV) sought a judgment declaring it properly terminated a license and transport agreement, whose sole consideration was the exchange of services, with television broadcaster RCTV International. DTV agreed to distribute RCTV's signal to subscriber's in Venezuela but its agreement provided it could suspend distribution if it determined that distribution could be construed as violating a law or "politically inadvisable." DTV removed RCTV's signal from its Latin America package and RCTV claimed DTV acted without ever receiving an official ruling or directive from the Venezuelan government directing it to stop broadcasting RCTV's programming. The court noted the agreement did not require any such formal order, noting it permitted DTV to suspend distribution upon concluding "in its sole discretion" that broadcasting "may be construed" as violative of any law or "could be" politically inadvisable." It stated RCTV failed to explain why it would be arbitrary for DTV to avoid a confrontation with the Venezuelan government over a channel that was targeted by that government for political reasons. Thus, RCTV's counterclaims for damages was dismissed.

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