Cable Operators

Comcast Loses In Bid to Quash Class-Action Suit

9/05/2011 12:01 AM Eastern

A class-action lawsuit against Comcast
— alleging the cable operator violated federal antitrust
laws and overcharged subscribers — is moving
forward after a federal
appeals court
last month affirmed
the case’s classaction
certification.


Behrend v. Comcast
Corp
., which
seeks damages of
more than $875 million,
was originally
filed in December
2003. Attorneys
for the six plaintiffs claim Comcast
overcharged customers for cable service after acquiring
cable providers in the Philadelphia area and obtaining
a monopoly in violation of the Sherman Act.

A three-judge panel for the U.S. Court of Appeals
for the Third Circuit ruled 2-1 on Aug. 23 that the class
met all the tests for a class action under federal guidelines
and concluded the class could show damages
using common proof. That upheld a decision by the
U.S. District Court for the Eastern District of Pennsylvania
holding the question of “common impact”
provable with class-wide evidence.

In upholding the lower court’s ruling, the appeals
panel said, “[W]e hold that the Court did not
exceed its permissible discretion in determining
that Plaintiffs established by a preponderance of
evidence that they would be able to prove through
common evidence (1) class-wide antitrust impact
(higher cost on non-basic cable programming), and
(2) a common methodology to quantify damages on
a class-wide basis.”

Comcast declined to comment on the ruling.

The suit alleges that Comcast in 1998 began acquiring
or engaging in “swaps” for cable systems in the
Philadelphia designated market area. That, according
to the plaintiffs, increased Comcast’s share of subscribers
in the Philadelphia DMA from 23.9% in 1998
to 77.8% by 2002, then declining to 69.5% in 2007.

The six plaintiffs, non-basic Comcast cable customers,
alleged the operator violated section 1 of the
Sherman Act for “imposing horizontal territory,
market and customer allocations by conspiring with
and entering into and implementing unlawful swap
agreements, arrangements or devices.” They also
charged Comcast violated section 2 of the Sherman
Act on theories of monopolization and attempted monopolization.

In addition to claims covering the Philadelphia
designated market area, the class-action lawsuit
alleges Comcast engaged in similar monopolistic
conduct in the Boston and Chicago markets.

Susman Godfrey and Heins Mills & Olson serve
as co-lead counsel for the class. Two other firms —
Freedman Boyd Hollander Goldberg Ives & Duncan
and Bolognese & Associates — act as additional class
counsel.

The case is docket No. 10-2865 at the U.S. Court of
Appeals for the 3rd Circuit.

November

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