Comcast Urges Denial of MaxLinear’s Motion to Dismiss Its Broadband Chips Complaint

MaxLinear’s “opportunistic” motion to dismiss Comcast’s third amended complaint should be denied, said Comcast’s memorandum of law Wednesday (docket 1:23-cv-04436) in U.S. District Court for Southern New York in Manhattan in support of its opposition to the motion.

The dispute began about a year ago when Comcast alleged that chipmaker MaxLinear breached its “contractual obligations” to support millions of Comcast’s broadband gateways (see 2305300045). MaxLinear contends that Comcast’s third amended complaint, like those before it, is a grievance “in search of a claim” (see 2404040031).

When faced with virtually identical declaratory judgment claims in Comcast’s prior complaints, MaxLinear never claimed the court lacked subject-matter jurisdiction to adjudicate them, said Comcast’s memorandum. “To the contrary, MaxLinear answered Comcast’s second amended complaint,” it said. That’s because the court, then and now, “has subject matter jurisdiction to adjudicate these claims,” it said.

Binding 2nd Circuit precedent directs that the very type of dispute raised here -- whether MaxLinear’s premature termination of the parties’ contracts is effective -- “is precisely the type of dispute the Declaratory Judgment Act was intended to address,” said the memorandum. MaxLinear also fails to provide any basis to dismiss Comcast’s indemnification and implied covenant claims as a matter of law, it said. At best, MaxLinear’s arguments with respect to those claims “raise factual issues that call for discovery and not dismissal, and none of its legal arguments has merit,” it said.

MaxLinear’s “attempted premature termination” of the parties’ contracts violated New York law, said the memorandum. New York law “specifically enforces termination notice provisions” such as those at issue here, it said. When a party to a contract with a notice provision attempts to terminate prematurely, the court “will construe the termination as effective only on the earliest possible termination date for which the contract allows,” it said.

MaxLinear “effectively concedes” that this rule applies, said the memorandum. The rule establishes that the earliest one of the contracts can terminate is May 23, and the earliest the other can terminate is Aug. 21, it said. Notwithstanding that conclusion, MaxLinear continues to maintain that both contracts terminated in May 2023, when Comcast received MaxLinear’s “premature termination letter,” it said.

Under one of the contracts, Comcast is entitled to indemnification for third-party claims, such as those brought against Comcast by Entropic in the California patent lawsuits, based on or arising from MaxLinear’s gross negligence or intentional misconduct, said the memorandum. The third amended complaint alleges that MaxLinear “engaged in an intentional scheme to harm Comcast by assigning its patents to Entropic for the express purpose of suing Comcast,” and then wrongfully attempting to terminate the contracts, it said.

That MaxLinear’s misconduct may have been financially motivated does not, as MaxLinear now suggests, “absolve it of its indemnification obligations,” said the memorandum. What’s especially “unavailing” is MaxLinear’s “specious argument” that Entropic isn’t “a true third party” because it purportedly is asserting claims MaxLinear otherwise could have asserted as the original owner of the patents, it said. That’s “not so,” and MaxLinear “provides no support for its position,” it said.