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Comcast Wins Class Action at Supreme Court

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by Publius
Posted March 28, 2013, 4:43 PM

The Philadelphia Inquirer reports:

The U.S. Supreme Court, in a decision released Wednesday, voted 5-4 along ideological lines in favor of Comcast Corp. in a consumer class-action lawsuit that has been grinding its way through the Philadelphia federal courts since December 2003.

The suit claims to represent two million Philadelphia-area Comcast TV customers who it says were harmed by anticompetitive business practices, and seeks $875 million in damages. The courts in Philadelphia certified the consumers as a class to collectively sue, but the Supreme Court overturned their rulings.

There are related allegations against Comcast over its actions in the Boston and Chicago markets.

Comcast said it was pleased with the decision. Lead plaintiffs attorney Barry C. Barnett of the Susman Godfrey L.L.P. firm in Dallas vowed to continue with the suit.

"We respectfully disagree with the majority's ruling. We look forward to satisfying the court's narrow methodological concerns on remand to the trial court and to trying the case on the merits as soon as practicable," Barnett said in a statement.

That could bring years more of litigation.

Comcast Corp. v. Behrend had gained national attention. It's part of a trend by the Supreme Court to tighten the standards by which plaintiffs can pursue class-action lawsuits, said attorney Ankur Kapoor of the Constantine Cannon L.L.P. firm's New York office.

Jonathan Cohn of Sidley Austin L.L.P. in Washington, who wrote a brief supporting Comcast, said the decision would make it more difficult for plaintiffs to pursue meritless suits and force companies into settlement talks because of the threat of a big jury award.

Others said the decision was anticonsumer and pro-business. Ken Jacobsen, law professor at Temple University, said it was predictable and "consistent with an agenda to tighten the noose on class actions by the majority" on the court.

The suit claims that Comcast's clustering of cable systems in the Philadelphia area through swaps with other cable companies between 1998 and 2007 enabled it to boost its market share to almost 70 percent of TV customers from 24 percent.

For example, according to court documents, Comcast acquired 460,000 cable customers in the Philadelphia area from Adelphia Communications in 2001. In exchange, Comcast sold to Adelphia cable-TV subscribers in South Florida and the Los Angeles area.

The clustering bolstered Comcast's market power in the Philadelphia area and reduced the threat of competition from a cable-TV over-builder - a company that would create a competing network, the suit claims. The result was less competition and higher prices.

After years of litigation, Comcast agreed last June 12 to settle the case before a trial scheduled for the fall, though the settlement agreement was not finalized. A federal judge had sealed the offer meant to settle the case. Then on June 25, the Supreme Court granted Comcast's request to hear the case. The case was argued in November in Washington.

The Supreme Court did not consider the issue of alleged anticompetitive behavior. It focused on the narrow question of whether damages among the class of individual Comcast subscribers could be fairly measured throughout the huge Philadelphia market.

"The permutations involving four theories of liability and two million subscribers located in 16 counties are nearly endless," Justice Antonin Scalia wrote in the majority opinion.

"It is clear that under the proper standard for evaluating certification, respondents' model falls far short of establishing that damages are capable of measurement on a class-wide basis."

Chief Justice John G. Roberts Jr. and Justices Clarence Thomas, Samuel A. Alito Jr., and Anthony M. Kennedy joined Scalia in the opinion. . . .

 

 

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