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Unfair Competition: Knology, Inc. v. Insight Communications Co.


Greenebaum represented Knology, Inc. (Knology) in an unfair competition lawsuit filed in federal court against Insight Communications Company, L.P. and Insight Kentucky Partners, L.P. (collectively Insight) stemming from what was alleged to be Insight’s attempts to block Knology’s efforts to enter and compete in the Louisville cable television market. In its complaint, Knology sought a declaratory judgment, injunctive relief and monetary damages. The district court initially granted summary judgment to Knology on its claim for declaratory judgment, injunctive relief and two of its claims for monetary damages. Insight appealed the district court’s decision on Knology’s damage claims. The U.S. Court of Appeals for the Sixth Circuit Court ultimately reversed the district court’s decision, finding Insight immune from liability on those claims. The district court’s decision granting Knology a declaratory judgment and a permanent injunction, however, remained intact.

On remand, both Knology and Insight filed motions to dismiss the remainder of the case with prejudice. While Knology’s motion sought a dismissal with each party to bear their own costs, Insight sought to have Knology pay $400,000 in costs that it allegedly incurred in defending the lawsuit. The district court granted Knology’s motion and denied Insight costs. Insight appealed, claiming that it was entitled to recover its costs under Rule 54(d). Eric L. Ison, Holland N. McTyeire V and Melissa Norman Bork, Members in our Louisville office, defended and argued the appeal for Knology.

In a published opinion, Knology, Inc. v. Insight Communications Co., 460 F.3d 722 (6th Cir. 2006), the Sixth Circuit affirmed the district court’s decision denying costs to Insight, finding the district court did not err in determining that Knology prevailed on some of its claims and that Insight, therefore, was not the prevailing party entitled to a presumption of costs under Rule 54(d). The Court concluded that “[t]he policy behind Rule 54(d) of providing a disincentive for the prosecution of frivolous lawsuits would be undermined if a party like Knology that prevailed in part and received some preliminary relief was dissuaded from making a business decision to stop litigating because without additional success, it would be forced to pay its opponent’s costs.”

The Sixth Circuit also found that the district court’s alternative holding for denying Insight’s request for costs was equally justified and was not an abuse of its discretion. The Court noted that the district court properly considered factors such as Knology’s good faith and the difficulty of the case. The Court determined that this was a “close and difficult case” and that “Knology conducted this litigation in a proper, good faith manner.” The Court went on to describe Insight’s appeal as “disingenuous” and stated that the arguments presented by Insight were “not well taken.” In conclusion, the Court stated that “[t]he district court’s denial of costs to Insight was well-reasoned, and certainly cannot be described as an abuse of discretion.” The Court’s opinion is located on a link at Greenebaum’s website.


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