CableLabs Seeks 4 Quarters of Dues in Early Termination Fraud Suit vs. Videotron

Canadian cable provider Videotron, a longtime member of CableLabs, violated its subscription agreement when it terminated its membership without providing the required one-year notice, a breach-of-contract complaint Wednesday alleged (docket 1:24-cv-01521) in U.S. District Court for Colorado. CableLabs is an industry R&D corporation.

When Videotron became a CableLabs member in November 2004, it agreed to be bound by the terms and conditions in CableLabs' certificate of incorporation and bylaws, agreeing to pay specified dues that “might be amended from time to time in the future,” said the complaint. The Montreal-based cable provider also agreed it wouldn’t terminate its membership without giving at least a one-year notice, the complaint alleged, and to pay dues quarterly at 2 cents per subscriber per member per month.

The CableLabs bylaws were amended several times in subsequent years, but membership provisions didn’t change, said the complaint. In November 2020, the CableLabs board revised the formula used to calculate members’ dues, the complaint said. Dues for each Canadian CableLabs member would be 6 cents of its and its affiliates’ cable revenue for the previous quarter from service to residential and commercial customers, it said. The rates were subject to a 27% discount for annual dues above $1 million, or $250,000 per quarter, it said.

On Feb. 24, 2023, Videotron informed CableLabs that it wanted to terminate its agreement with the corporation on April 1 of that year, the complaint said. In response, the defendant informed Videotron of its obligation to provide one year’s notice of termination, with an obligation to pay dues through April 1 of this year, marking one year from its termination date, it said. CableLabs reiterated its position with Videotron in a July letter.

Videotron responded on the same day, saying it considered its dues to CableLabs paid in full and that it would make no further payments, the complaint said. The plaintiff alleges Videotron owes membership dues for Q2, Q3 and Q4 of 2023 and Q1 of this year.

In addition to breach of contract, CableLabs asserts claims of breach of bylaws and indemnification/fee shifting. The plaintiff requests judgment that Videotron breached the CableLabs subscription agreement and bylaws; an order that the cable provider must reimburse it for all damages, losses, collection expenses and costs associated with collection of its “delinquent dues”; attorneys' fees and costs; and unpaid membership dues.