Running Cable Through Court Impacts Comcast

Decision on class action suit could lead to huge settlement
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While much of Washington—and the nation— was focused on the elections last week, the Supreme Court was studying some numbers itself, related to clustering of cable systems and channels. The high court heard arguments in a class-action suit against Comcast, and denied to hear an appeal of a lower court’s dismissal of another class action case against the MSO and other cable operators, satellite distributors and programmers over bundling of channels.

On Nov. 5, Comcast presented oral arguments in its appeal of a Third Circuit decision that there had been sufficient grounds to create a “class” in the class-action suit against the nation’s largest cable operator by some subscribers. Comcast had tentatively settled the suit, but it will now wait until the Supreme Court has its say before deciding how to proceed.

The issue is whether a lower court can certify a class without weighing evidence of whether that class quali! es for damages. The district court instead left that weighing of evidence for the actual trial.

While the argument in the court was over a point of law or the particular merits of the suit, a decision could determine if Comcast will pony up hundreds of millions of dollars, or whether other subscribers will suddenly feel empowered and emboldened to sue over geographical clustering.

If the Supreme Court agrees with the lower courts, which would allow the class-action suit to proceed, Comcast would likely proceed with the proposed huge-money tentative settlement. Comcast had no comment on the oral argument.

But that argument seemed to turn at times on whether Comcast had properly challenged the admissibility of the model for assessing damages offered up by the plaintiffs when it had the chance. Comcast said it had issues with that model and had stated so in a timely fashion; the opposing counsel begged to differ.

Chief Justice John Roberts suggested the court could simply decide whether or not Comcast had waived its challenge by not bringing it up expressly—if that were the case—and then send the case back to the lower court.

Based on the oral argument, antitrust attorney Matthew Cantor, a partner at Constantine Cannon, says he thinks the case will indeed be remanded back to the lower court to decide whether or not Comcast waived its challenge. That, Cantor says, would be a defeat for the MSO, since the lower court is the one that certified the class based on the damages model to begin with. If that were the case, Cantor believes, Comcast would likely settle.

While the Court’s ultimate decision could open the door to other class-action suits over clustering, the High Court closed the door on the other case, a class-action suit that would force cable operators and programmers to offer their programming à la carte.

The Supreme Court, in a one-line rejection, declined to hear the appeal of a lower court decision dismissing the suit for lack of a plausible claim.

E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton

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