DirecTV ordered to pull ads

A federal judge ordered DirecTV on Wednesday to pull some, but not all, of its disputed ads in response to litigation by St. Louis-based Charter Communications.

Charter filed a federal lawsuit on Monday alleging that competitor DirecTV has sent mailers and run print and radio advertisements claiming Charter is in trouble because it filed for bankruptcy. Charter says the bankruptcy is simply restructuring its finances, that service to customers is not affected and that the ads are false and deceptive.

Among the items Charter takes issue with is a direct mailer saying the cable company can’t provide the latest technology or channels. U.S. District Judge Rodney Sippel ruled that ad goes too far. The judge ordered DirecTV to quit sending or airing ads with language stating “there’s no way” Charter can provide certain services.

The judge said after a hearing on the temporary restraining order request that Charter showed it uses new technology and has added channels and programs, contradicting the mailer.

“That statement is simply not true based upon the record before the court,” the judge said in ruling from the bench.

Also included in his order is a temporary block on ads that frame the same idea as a question, but then answer it in the ads with “probably not.”

The cable company argues the ads could cost it revenue, including lost customers and efforts spent on marketing to counter DirecTV’s ads. The mailers, it said, are being sent to customers in at least eight states. The company says the ad campaign implies that Charter is going out of business and that it won’t be able to provide service to customers.

“The central message of their entire ad campaign is simply incorrect,” argued one of Charter’s attorneys, Dean Franklin of Thompson Coburn.

Franklin said that to win a temporary order in a false advertising case, Charter had to show that it’s likely to win the overall case or that the ads in question are demonstrably false. 

The judge didn’t require the satellite TV provider to take down its whole ad campaign. For example, he said a billboard with a life preserver can remain. That piece simply points out Charter’s filing, has a picture of a life preserver and says “save yourself” along with DirecTV’s phone number. It also appears that a radio ad raising questions about what will happen to Charter can remain.

The judge said what will happen with the company’s bankruptcy is still to be determined and it can’t guarantee that no negative effect will result. He noted evidence presented by DirecTV attorney Deirdre Gallagher that at least one of the company’s creditors, J.P. Morgan, has objected to the bankruptcy plan.

The judge also said that just because the company’s balance sheet is doing OK doesn’t mean much.

“The only reason your cash reserves are growing is you’re not paying your bills,” he told Charter’s lawyers.

Gallagher argued Charter was raising concern about economic losses, and it could eventually be awarded money if it wins the lawsuit, so a temporary block on ads is inappropriate.

“They don’t like this advertising campaign because it’s effective,” Gallagher, of Spencer Fane Britt & Browne, told the judge.

The attorneys on the case didn’t know whether such ads or mailings are set to be released in the next 10 days, the typical length of a restraining order.

A preliminary injunction hearing to consider a longer-term restriction on the ads as the case proceeds is set for next week. The formal order had not been filed Wednesday afternoon, according to electronic court records. The judge said a bond first had to be posted.

Attorneys for Charter and DirecTV declined to comment at the hearing.

“We believe competition should remain fair and truthful,” Charter general counsel Grier Raclin said in a statement after the judge ruled. “Charter’s operations are strong and our customers can feel confident that we will continue to serve them as usual.”

DirecTV spokesman Darris Gringeri said the company was waiting to see the formal court order but understood that it could run ads if it alters some language.

“We are still able to point to the fact that Charter is in bankruptcy and the outcome is uncertain,” he said in an e-mail.