     Case: 12-10935       Document: 00512256851         Page: 1     Date Filed: 05/30/2013




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT  United States Court of Appeals
                                                    Fifth Circuit

                                                                            FILED
                                                                           May 30, 2013

                                       No. 12-10935                        Lyle W. Cayce
                                                                                Clerk

NEXSTAR BROADCASTING, INCORPORATED,

                                                  Plaintiff - Appellant
v.

TIME WARNER CABLE, INCORPORATED,

                                                  Defendant - Appellee



                   Appeal from the United States District Court
                        for the Northern District of Texas
                             USDC No. 3:12-CV-2380


Before REAVLEY, JOLLY, and SMITH, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:*
       Nexstar Broadcasting, Inc. (“Nexstar”) contends Time Warner Cable, Inc.’s
(“Time Warner”) distant retransmissions of various Nexstar station signals
violated the terms of the parties’ Retransmission Consent Agreement (“RCA”).
Nexstar filed claims for breach of contract and copyright infringement and
moved for a preliminary injunction and a temporary restraining order. The
district court denied Nexstar’s motions, and Nexstar timely filed an interlocutory
appeal. We AFFIRM.

       *
         Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
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                                               I.
       Nexstar is a Delaware corporation with its principal place of business in
Irving, Texas. Nexstar owns and operates television stations in various markets
across the United States, actively producing and distributing broadcast
television programs and other copyrighted works. Most of these stations are
affiliated with national programming networks,1 but Nexstar also offers local
programming services, including local news production and sales. Time Warner
is the second-largest cable television operator in the United States and has more
than 12 million residential video subscribers in 29 states. That is, Nexstar
creates signals and Time Warner operates systems that distribute these signals.
       At issue in this appeal is the extent to which the RCA Nexstar and Time
Warner executed in June 2009 permits Time Warner to retransmit Nexstar
signals on systems outside a station’s local market. Nexstar contends the RCA
only allows Time Warner to retransmit Nexstar’s signals in certain local
markets, whereas Time Warner asserts the RCA provides a broad right for it to
retransmit Nextar signals over each of Time Warner’s cable systems, regardless
of that cable system’s location.
       The relevant provisions of the RCA are as follows. Section 1 states:
       Retransmission Consent. [Nexstar] hereby gives [Time Warner]
       its consent, pursuant to Section 325(b) of the [Communications Act
       of 1934] and the FCC Rules, to the nonexclusive retransmission of
       the entire broadcast signal of each [Nexstar] Station (the “Signal”)
       over each [Time Warner] System[2] pursuant to the terms of this


       1
          For example, Nexstar is a local affiliate of NBC in some markets. The broadcast
agreement between Nexstar and NBC prohibits Nexstar from granting “consent to the
retransmission of its broadcast signal by any cable television system . . . if such cable system
. . . is located outside the [Designated Market Area] to which [the Nexstar] Station is
assigned.” Appellant’s Br. at 18 n.10 (first alteration in original).
       2
        The RCA defines “System” as “a multichannel video distribution system that is owned,
operated or managed by: (i) any of Operator [Time Warner], Time Warner Entertainment
Company, L.P. (“TWE”), Time Warner NY Cable LLC (“TWNY”), Time Warner Entertainment-

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       Agreement. [Time Warner] agrees to retransmit the Stations’
       Signals subject to the requirements of Section 2 below. . . .
       Section 325(b)(1)(A) of the Communications Act provides, “No cable system
or other multichannel video programming distributor shall retransmit the signal
of a broadcasting station, or any part thereof, except with the express authority
of the originating station[.]” 47 U.S.C. § 325(b)(1)(A). The FCC Rules further
provide “Retransmission consent agreements between a broadcast station and
a multichannel video programming distributor shall be in writing and shall
specify the extent of the consent being granted, whether for the entire signal or
any portion of the signal.” 47 C.F.R. § 76.64(j).
       Section 2 of the RCA then provides:
       Carriage. (a) Subject to Section 3 below, each Upgraded System[3]
       that is located in the Television Market (as defined by the FCC
       Rules) of a Station shall retransmit, at its own expense, such
       Station’s Primary Program Transport Stream, the Required Stream
       for such System (if any, as set forth in Exhibit A) (subject to
       applicable notice requirements), and to the extent technically
       feasible, the Program-related Material relating thereto, without
       interruption, additions, insertions, alterations or deletions. Each
       such System shall carry the Primary Program Transport Stream of
       each applicable Station on the same tier of service as all other local
       full-power Big Four Network affiliated (as defined in Exhibit B)
       signals are carried in such System. . . .
Section 7 reads:


Advance/Newhouse Partnership (“TWEAN”); (ii) any affiliate or wholly-owned subsidiary of
TWC, TWNY or TWEAN; or (iii) any other corporation, partnership, joint venture, trust, joint
stock company, association, unincorporated organization (including a group acting in concert)
or other entity as to which any one or more of Operator, TWE, TWNY or TWEAN directly or
indirectly possesses the power to direct or cause the direction of such entity’s management and
policies, whether through the ownership of voting securities, by contract, management
agreement or otherwise.”
       3
         The RCA defines “Upgraded System” as “a System that has an activated bandwidth
of at least 750 MHZ, and has launched and distributes (on a non-test basis) the over the air
digital broadcast signal (in a digital format) of any other local full-power commercial broadcast
television station.”

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      Copyright, Trademarks and Unauthorized Use. Operator
      acknowledges that, except as otherwise set forth herein . . . the
      retransmission right granted herein to each Station’s Signal does
      not convey any license or sublicense in or to the copyrights of and to
      the underlying programming transmitted by the Station, or to the
      marks, names and logos that may be used therein; and that, as
      between the parties, except as set forth herein, it shall remain the
      obligation of [Time Warner] to obtain any necessary licenses for
      retransmission on the System, whether under compulsory copyright
      license pursuant to 17 U.S.C. § 111, or otherwise. . . . Except as
      specifically permitted herein or as necessary to exercise rights
      granted herein, no [Time Warner] System shall, for pay or
      otherwise, record copy, duplicate, retransmit or expressly authorize
      the recording, copying, duplication or retransmission of any portion
      of the Stations’ Signals without [Nexstar’s] prior written consent;
      provided, however, that the foregoing shall not be deemed to
      prohibit Operator [Time Warner] or any System from undertaking
      any activity that is not prohibited by applicable law in the absence
      of a license[.]
      Finally, Section 11, entitled “Termination” provides, “[Time Warner] may
discontinue carriage of any Program Transport Stream of any Station if . . . the
System carrying such Program Transport Stream is located outside such
Station’s Television Market.” RCA § 11(b)(iii). Notably, there is no provision of
the RCA that purports to place explicit limits upon Time Warner’s ability to
retransmit Nexstar’s signals.
      Nonetheless, Nexstar argues the RCA provides Time Warner narrow
retransmission authority, confining Time Warner’s ability to retransmit signals
to the relevant local market. Accordingly, Nexstar contends Time Warner
breached the RCA by retransmitting the station signals of WBRE-TV (the NBC
affiliate in Wilkes-Barre, PA), WTWO (the NBC affiliate in Terre-Haute, IN),
and WROC-TV (the CBS affiliate in Rochester, NY) outside of their local
markets and into five distant markets. Following these distant retransmissions,
Nexstar filed breach of contract and copyright infringement claims and moved
for a temporary restraining order and a preliminary injunction.

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      The district court denied Nexstar’s motions, holding Nexstar did not
demonstrate it had a substantial likelihood of succeeding on the merits of its
breach of contract claim, and, further, that its copyright claim hinged upon the
assertion that Time Warner’s retransmission was outside the scope of Nexstar’s
consent in the RCA. In reaching this decision, the district court applied Texas
law to find the RCA was not ambiguous as a matter of law, and that “[n]owhere
in the RCA d[id] Nexstar limit its retransmission consent.” The district court
noted that the RCA mentioned systems “located in the Television Market of a
Station” only in Section 2(a), which details Time Warner’s obligations to carry
Nexstar signals—not in Section 1, which describes Time Warner’s right to
retransmit.   Reasoning that Texas law requires courts to “presume that
omissions are purposeful,” the district court found this reference to Television
Markets did not limit Time Warner’s ability to retransmit signals. Moreover,
the court noted Section 11 (Termination) conferred upon Time Warner the right
to discontinue transmissions to out-of-market locations. The court found this
conferment necessarily implies Time Warner has the right to retransmit signals
outside of their local markets, and held this reasoning further supported its
holding that the RCA provided Time Warner the ability to distantly retransmit
the signals at issue.
      Nexstar timely filed an interlocutory appeal, pursuant to 28 U.S.C. §
1292(a)(1).
                                       II.
      We review a district court’s ultimate decision to grant or deny a
preliminary injunction for abuse of discretion. Janvey v. Alguire, 647 F.3d 585,
591-92, 595 (5th Cir. 2011). With respect to each element of the district court’s
preliminary injunction analysis, we review findings of fact for clear error and
conclusions of law de novo. Id. at 592 (quoting White v. Carlucci, 862 F.2d 1209,



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1211 (5th Cir. 1989), and citing Byrum v. Landreth, 566 F.3d 442, 445 (5th Cir.
2009)).
       In construing a contract under Texas law, the court should consider the
contract “as a whole,” affording “each part of the contract . . . effect.” Forbau v.
Aetna Life Ins. Co., 876 S.W. 2d 132, 133 (Tex. 1994). Discerning the parties’
true intent, as expressed in the language of the contract, is the court’s primary
concern. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W. 2d 462, 464 (Tex.
1998); R & P Enterprises v. LaGuarta, Gavrel & Kirk, Inc., 596 S.W.2d 517, 518-
19 (Tex. 1980). The court should generally give words and phrases in contracts
their “ordinary, popular, and commonly accepted meanings.” Phillips v. Union
Bankers Ins. Co., 812 S.W.2d 616, 618 (Tex. App. 1991); see also DeWitt County
Elec. Co-op., Inc. v. Parks, 1 S.W.3d 96, 101 (Tex. 1999) (“The language in an
agreement is to be given its plain grammatical meaning unless to do so would
defeat the parties’ intent.”).
                                        III.
       Nexstar argues the district court erred as a matter of law in finding
Nexstar is not likely to succeed on the merits of its breach of contract claim
because the RCA clearly prohibits distant retransmissions. To support this
argument, Nexstar contends (1) “each” does not mean “all;” (2) Section 325(b) of
the Communications Act and the FCC rules limit Time Warner’s retransmission
authority because they are incorporated by reference into the RCA; (3) Section
2, along with Exhibits A and B, identifies the specific—and only—markets to
which Time Warner may retransmit Nexstar signals; and (4) the “[e]xcept as
specifically permitted herein” language in Section 7 limits Time Warner’s ability
to retransmit the signals at issue. These contentions, however, do not persuade
us.
       In analyzing Nexstar’s arguments, we first examine the language of the
RCA.      As the district court noted, Section 1 confers broad retransmission

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authority: “[Nexstar] hereby gives [Time Warner] its consent, pursuant to
Section 325(b) of the Act and the FCC Rules, to the nonexclusive retransmission
of the entire broadcast signal of each Station (the “Signal”) over each System
pursuant to the terms of this Agreement.”4 The RCA broadly defines “System”
to mean all Time Warner Systems5—it does not limit the term to only those Time
Warner Systems servicing the relevant local television markets. Thus, the plain
language of this conferment does not proscribe Time Warner’s retransmission
authority to local television markets; instead, it allows Time Warner to
retransmit Nexstar signals on every “System” as defined in the contract.
Nexstar’s argument that “each” does not mean “all” does not alter this result.
“It is well-settled that ‘we should give words of statutes their plain meaning.’”
United States v. Ferguson, 369 F.3d 847, 851 (5th Cir. 2004) (quoting Demette v.
Falcon Drilling Co., 280 F.3d 492, 502 (5th Cir. 2002)). The adverb “each” is
“distributive—that is, [it] refer[s] to every one of the several or many things (or
persons) comprised in a group.” BRYAN A. GARNER, GARNER’S DICTIONARY                     OF

LEGAL USAGE 303 (3d ed. 2011). Section 1, then, grants Time Warner the ability
to retransmit Nexstar signals over every System—not just systems in local
markets.
       Furthermore, the plain language of Section 325(b) and the FCC rules,
requires, respectively, “express authority of the originating station,” 47 U.S.C.
§ 325(b)(1)(A), and consent agreements that “shall be in writing and shall specify

       4
         The phrase “pursuant to Section 325(b) of the Act and the FCC Rules” appears to
modify “consent” and not “nonexclusive retransmission.” Thus, it expresses that Nexstar has
the power to consent to retransmissions under these extra-contractual provisions and is
exercising that power in Section 1. Nexstar’s argument that Section 1 does not provide Time
Warner “express” authority to retransmit its signals, therefore, is wrong.              The
Communications Act and the FCC Rules do not require that the written consent specify the
geographic locations in which retransmission is allowed—only that the consent be clearly
articulated and state whether the broadcaster may retransmit the entire signal or only parts
of the signal. Section 1 comports with these requirements.
       5
           See supra note 2.

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the extent of the consent being granted, whether for the entire signal or any
portion of the signal,” 47 C.F.R. 76.64(j), and does not limit Time Warner’s
retransmission consent to local markets.                  The RCA satisfies these
standards—Section 1 clearly gives Time Warner retransmission consent for “the
entire broadcast signal of each Station . . . over each System.”6 Thus, the RCA
validly bestows retransmission authority to Time Warner.
       Because we must give contractual language “its plain, grammatical
meaning unless the parties definitely intended otherwise,” Phillips, 812 S.W.2d
at 618, Nexstar would need to demonstrate some other provision of the RCA
renders this understanding of Time Warner’s retransmission authority absurd,
or that this understanding defeats the parties’ intent in forming the contract, in
order to demonstrate a likelihood of success on the merits. See DeWitt County
Elec. Co-op., 1 S.W.3d at 101. Thus, Nexstar’s primary assertion in this respect
is that Section 2 clearly limits Time Warner’s retransmission authority to local
Television Markets, as detailed in Exhibits A and B. But this assertion is
incorrect. Section 1 notes Time Warner “agrees to retransmit the Station’s
Signals subject to the requirements of Section 2,” but Section 2 describes only
what Time Warner must transmit—it says nothing about what Time Warner
may transmit. That is, while Section 2 states Time Warner is required to
retransmit certain Nexstar streams in the relevant Television Market, it does
not purport to limit Time Warner’s retransmissions to only those Television
Markets. Indeed, if Time Warner had no authority to retransmit signals outside
those requirements defined in Section 2, there would apparently be no need for
Section 1—the RCA could simply define Time Warner’s retransmission
obligations. As construing the RCA in this manner would render Section 1


       6
         Nexstar asserts the retransmission consent Section 1 confers is not “express,” but
proffers no case law or other evidence indicating the FCC Rules or the Communications Act
would require anything more clear than the language the RCA provides.

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meaningless, in violation of Texas contract law, it is reasonable to conclude the
RCA provides Time Warner with broader retransmission authority than the
specific requirements articulated in Section 2(a). R & P Enterprises, 596 S.W.2d
at 519.
       Nexstar also contends Section 7 includes limiting language, namely,
“Except as specifically permitted herein, no [Time Warner] System shall . . .
retransmit . . . any portion of the Stations’ Signals without [Nexstar’s] prior
written consent.” This language, however, is not relevant to the case before us,
as we have already concluded Section 1 does clearly confer upon Time Warner
specific permission to retransmit Nexstar signals over every System.
       Nexstar further argues the district court did not read the RCA as a whole,
and that, when properly read holistically, the RCA expresses a clear intent to
provide Time Warner with narrow retransmission authority.7 Nexstar supports
this argument by noting that other provisions refer specifically to local
Television Markets; but it does not proffer a compelling reason why these other
provisions proscribe Time Warner’s ability to retransmit “the entire broadcast
signal of each Station . . . over each [Time Warner] System” granted in Section
1.8     If anything, these references seem to weigh against Nexstar’s

       7
        For instance, Nexstar argues Exhibit B indicates Time Warner is paying Nexstar for
retransmissions only into the local markets described in that exhibit. Pursuant to the
statutory licensing scheme the FCC constructed, however, cable systems may retransmit
stations without a copyright, and later pay the copyright holder pursuant to the statutory
plan. Thus, Time Warner is obligated to pay Nexstar for its distant retransmissions, despite
that the parties did not establish a private payment system.
       8
         For example, Nexstar asserts, “Section 7 provides that no Time Warner systems other
than those ‘located in a Television Market’ of a Covered Station are given any authorization
under the RCA to retransmit the signals of Covered Stations.” Appellant’s Br. at 8-9. But
Section 7 actually reads: “Except as specifically permitted herein or as necessary to exercise
rights granted herein, no System shall . . . retransmit . . .any portion of the Stations’ Signals
without [Nexstar’s] prior written consent.” This provision says nothing about systems
“‘located in a Television Market’ of a Covered Station,” as Nexstar argues it does. We have
already found Section 1 clearly grants Time Warner the right to retransmit in distant
markets, thus this limitation in Section 7 is inapplicable to the case before us.

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argument—they demonstrate the parties knew how to insert geographic
limitations when relevant.9            See, e.g., Evanston Ins. Co. v. ATOFINA
Petrochems., Inc., 256 S.W.3d 660, 664 (Tex. 2008) (“[H]ad the parties intended
to insure ATOFINA for vicarious liability only, ‘language clearly embodying that
intention was available.’” (citing McIntosh v. Scottsdale Ins. Co., 992 F.2d 251,
255 (10th Cir. 1993))).
       Accordingly, the plain language of the RCA grants Time Warner broad
authority to retransmit Nexstar signals on Time Warner stations. The district
court did not err in concluding Nexstar is not likely to succeed on the merits of
its breach of contract claim.
                                             IV.
       Nexstar next argues the district court erred in finding it unlikely to
succeed on the merits of its copyright claim. While the district court found the
copyright claim was contingent upon finding a breach of the RCA, Nexstar
argues this conclusion is incorrect; and, furthermore, that (1) Time Warner was
ineligible for a statutory copyright license, and (2) Nexstar did not grant Time
Warner a copyright license.
       The Communications Act provides for statutory licenses:
       Subject to the provisions of paragraphs (2), (3), and (4) of this
       subsection and section 114(d), secondary transmissions to the public
       by a cable system of a performance or display of a work embodied in
       a primary transmission made by a broadcast station licensed by the


       9
          Nexstar further contends it is industry practice for RCAs to grant authority to
retransmit signals only to local markets, and urges us to find the plain reading of the RCA
absurd to the extent it is at odds with this practice. The Texas Supreme Court briefly
addressed a contention similar to Nexstar’s in Frost National Bank v. L & F Distributors, Ltd.,
165 S.W.3d 310 (Tex. 2005). The facts of Frost are distinguishable from the present case
insofar as the alleged industry practice reinforced, rather than contradicted, the contract’s
plain language. See id. at 313 n.3. The same result, however, obtains: Where the “plain
language of the contract is clear,” “we need not consider such evidence” as “course of dealing,
course of performance, and usage of trade.” Id. Therefore, because the language of the RCA
is clear, we do not consider the extraneous evidence Nexstar proffers.

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       Federal Communications Commission . . . shall be subject to
       statutory licensing upon compliance with the requirements of
       subsection (d)[10] where the carriage of the signals comprising the
       secondary transmission is permissible under the rules, regulations,
       or authorizations of the Federal Communications Commission.
17 U.S.C. § 111(c)(1). The Act further notes that a cable system’s willful or
repeated retransmission may be actionable if (1) that retransmission is not
permissible under the rules, regulations, or authorizations of the FCC, (2) the
cable system has not complied with subsection (d)’s requirements regarding
royalty fees, or (3) the cable system willfully alters the transmission. 17 U.S.C.
§ 111(c)(2)-(3).
       Nexstar argues Time Warner is ineligible for a statutory license because
it has violated various FCC rules and regulations. As discussed above, the
retransmission consent expressed in Section 1 of the RCA comports with the
rules and regulations requiring express, written consent. See, e.g., 47 U.S.C. §
325(b)(1)(A); 47 C.F.R. § 76.64(a)&(j). Nexstar additionally contends Time
Warner contravened the FCC’s non-duplication rules, expressed in 47 C.F.R. §
76.92. This provision allows a local station, such as Nexstar, to exercise non-
duplication rights—however, in order to exercise these rights, a station must
first notify a cable system of its intent to do so. 47 C.F.R. § 76.94(a) (“In order
to exercise the non-duplication rights pursuant to § 76.92, television stations
shall notify each cable television system operator of the non-duplication sought
in accordance with the requirements of this section.”). Nexstar has not argued
it provided Time Warner with the requisite notice; thus, there is no evidence
Time Warner violated these rules. Accordingly, the evidence before us indicates




       10
         Subsection (d) deals with the calculation and payment of royalty fees to the copyright
owner. Thus, cable systems may retransmit stations without obtaining an actual copyright,
but the statutory licensing scheme still requires them to compensate the copyright holder.

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Time Warner was eligible for a statutory license and the district court did not
err in finding Nexstar is unlikely to succeed on the merits of its copyright claims.
                                        V.
      The district court correctly found Nexstar is not likely to succeed on the
merits of its breach of contract or copyright claims. Thus, its denial of a
preliminary injunction and a temporary restraining order was not an abuse of
discretion. The orders of the district court are
                                                                       AFFIRMED.




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