Viacom Inc. will pay $13 million to settle a class-action lawsuit challenging 12-year-old rate hikes by systems in the San Francisco Bay area that the company no longer owns.
The legal challenge, filed in Alameda County Superior Court, was brought on behalf of about 650,000 area cable consumers who saw their rates increase 14% beginning in 1991. In the mid-1980s, Californians approved an initiative called Proposition 13, which rolled back property taxes and capped annual hikes. But the sale of property — or in Viacom's case its $3 billion merger with National Amusements Inc. — triggered a reassessment. Viacom saw its cable property tax bill soar from $387,100 to about $2.6 million annually in 1991. It passed the hike along to Viacom Cable customers, adding about $1 to the monthly cable bill.
Viacom vowed to challenge the reassessment and to share any rebates with consumers.
Two Marin residents, Suzanne Gayette and William Citara, were the named plaintiffs in a suit filed in 2000 seeking rebates for the rest of Viacom's customers.
A Viacom spokesman said, "We are very pleased that we are able to resolve this matter particularly in a way that benefits the community at large." She declined further comment, such as how the company would get the rebate back into the hands of former subscribers.
The region formerly served by Viacom Cable is now in the hands of Comcast Corp.
The court must still approve the settlement. A hearing on that was set for late October. The plaintiffs' lead attorney did not return calls for comment on how the refunds would be executed.
Some ex-customers could receive up to $15 apiece. According to the lawsuit Web site, Viacom agreed to make notifications of the settlement.
Attorneys set up a toll-free information number, but a recording there advises callers that details will not be available until Aug. 19.