Los Angeles -- MediaOne Group Inc. successfully fended off
a challenge to its late-fee amount here as a state court judge threw out a potential
class-action lawsuit.Regardless of the outcome, the lawsuit's filing showed that even
in a state where late-fee amounts are legalized, operators must communicate them clearly
or risk court appearances.
Under a state law that was originally sponsored by the
California Cable Television Association, late fees throughout the state were set at $4.75
per month, with a trigger date no sooner than 22 days after the original bill was issued.
But Los Angeles consumer Darren Manibog recently became
angry when his bill from MediaOne contained a line-item late fee of $4.99 -- 24 cents more
than the statutory amount. He filed a potential class-action lawsuit in Superior Court in
Los Angeles County over the additional fee.
During pretrial hearings on the suit, attorneys for
MediaOne explained that the charge included franchise fees earned on the late-fee income.
Federal policy allows cable operators to pass through the amount of the franchise fee.
The plaintiff's attorney argued that since it was
lumped into the late fee, it was a charge for delinquency, and not a franchise cost.
But in a ruling dated March 25, Judge Bruce Mitchell agreed
with the operator, adding that there is no language in the California statute that
precludes the operator from recovering franchise-fee costs related to the late fee.
Mitchell granted the operator summary judgment, dismissing
The lawsuit was the latest in a long series of challenges
to cable late fees in the Golden State.
Operators throughout California -- including Cox
Communications Inc.'s Cox Cable San Diego, Sacramento Cablevision (then a Scripps
Howard Cable TV property) and Viacom Cable -- were hit with challenges to their late fees
in the late 1980s and early 1990s.
In the case of Cox Cable San Diego, the county district
attorney prosecuted the operator after a flood of complaints in 1990. The prosecutor
discovered that the operator collected $1 million in late charges that year, at $7.50 a
pop. The district attorney's office believed that this amount violated the
state's Business and Professions Code.
The operator at that time agreed to a settlement of rebates
and donations to education totaling about $7 million. At the time of the prosecution, a
class action was also pending against Cox.