## Facts

- Neil Stokes and Craig Felzien were long-time satellite television subscribers who purchased DISH programming packages that included Turner and FOX News channels and continued paying monthly fees for those packages.
- DISH’s carriage agreement with Turner expired on October 21, 2014 and was renewed on November 20, 2014; its carriage agreement with FOX News expired on December 21, 2014 and was renewed on January 15, 2015.
- During each gap, subscribers who had packages including the affected channels lacked access to those channels, though DISH continued providing many other channels.
- DISH did not provide affected subscribers any monetary credit, rebate, or refund for the interruptions.
- The parties’ relationship was governed by a Plan Agreement incorporating a Residential Customer Agreement (RCA) and selecting Colorado law.
- The agreements stated DISH could change prices, packages, and programming, and the RCA further stated subscribers were not entitled to any refund due to a deletion, rearrangement, or change in programming.
- Plaintiffs filed a putative nationwide class action alleging breach of contract and breach of the implied covenant of good faith and fair dealing based on DISH’s failure to provide monetary relief for the outages.

## Issues

1. Whether the Subscription Agreement was unenforceable as an illusory contract because DISH retained broad unilateral rights to change programming and prices.
2. Whether Colorado’s implied covenant of good faith and fair dealing could require DISH to provide monetary relief for programming interruptions despite an express contractual no-refund provision.

## Decision

- The Eighth Circuit reversed the district court’s refusal to dismiss the claims seeking class-wide monetary relief and remanded.
- The court held the Subscription Agreement was not illusory under Colorado law, given years of mutual performance and enforceable obligations.
- The court held the implied covenant of good faith and fair dealing could not be used to impose monetary relief that the contract expressly disclaimed.
- Because the contract unambiguously stated subscribers were not entitled to refunds due to programming deletions or changes, plaintiffs’ monetary-relief theories failed to state a claim.

## Legal Principles

- Under Colorado law, a contract is not rendered illusory merely because one party retains discretion to modify certain terms; mutual performance over time is strong evidence of a binding exchange.
- The implied covenant of good faith and fair dealing enforces the parties’ justified expectations within the contract’s express terms and cannot contradict provisions for which the parties bargained.
- Even where discretion is constrained by good faith, the covenant cannot create remedies or payment obligations that an agreement explicitly negates, including an unambiguous no-refund clause for programming changes.

## Conclusion

The court held that DISH’s broad modification provisions did not make the subscriber agreement illusory and that the implied covenant of good faith and fair dealing cannot require credits or refunds when the contract expressly bars refunds for programming deletions or changes, requiring dismissal of class-wide monetary relief claims based on the interruptions.


Stokes v. DISH Network, L.L.C., 838 F.3d 948 (8th Cir. 2016)