Dish Network Denied New Hearing in FCC Licensing Auction Fraud Case

DishNetwork Inc. lost its bid for a rehearing to argue that a DC Circuit panel improperly revived a False Claims Act lawsuit alleging the company used bogus small businesses to gain FCC communications licenses from a worth billions of dollars, according to a DC circuit order.

Dish’s motion for a rehearing and a rehearing en banc was denied by the United States Court of Appeals for the DC Circuit on Wednesday.

Whistleblower Vermont National Telephone Co. alleges that Dish’s scheme prevented it from participating fairly in a 2014 FCC auction for spectrum licenses, which allowed the companies to provide television, cellphone and wireless internet.

An affiliate of Vermont National and others filed a petition with the FCC challenging the licenses on May 11, 2015. Vermont National filed its FCA lawsuit two days later.

A district court dismissed the FCA’s lawsuit under the government’s action bar in March 2021. The bar excludes lawsuits “based on allegations or transactions that are the subject of a civil suit or ‘a civil administrative monetary penalty proceeding in which the government is already a party.’

A DC circuit panel restored pursuit on May 17.

Vermont National successfully argued that its complaint against the FCA – filed days after a license challenge by the Federal Communications Commission – should not have been dismissed because the agency’s proceeding did not result in a penalty, the panel said.

Dish argued in its request for a rehearing that the finding that the ban was not triggered because the FCC lacked the authority to impose penalties, as the agency had no never commenced forfeiture proceedings, had no basis under the FCA statute.

Hogan Lovells US LLP, Wilmer Cutler Pickering Hale & Dorr LLP and Covington & Burling LLP represented the defendants. Wiley Rein LLP and MoloLamken LLP represented Vermont National.

The case is that of the United States ex rel. Vt. Nat’l Tel. Co. c. Northstar Wireless LLC, DC Cir., No. 21-7039, 8/17/22.

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