U.S. SC: Class action over cable company's alleged monopolization improperly certified

By Jessica M. Karmasek | Mar 27, 2013

WASHINGTON (Legal Newsline) -- The U.S. Supreme Court ruled 5-4 Wednesday that a class action filed over a cable company's alleged monopolization was improperly certified.

In Comcast v. Behrend, subscribers -- more than 2 million current and former -- sued Comcast Corp. and various Comcast subsidiaries, alleging that the company monopolized Philadelphia's cable market and excluded competition in violation of federal antitrust laws.

To constitute a class, plaintiffs proffered an expert damages model that purported to prove each class member's damages by evidence common to all.

Comcast responded that the model was incapable of calculating damages for the class because it was based on several erroneous assumptions about the asserted claims, and that common proof of damages is impossible given significant differences among the class members.

Despite this, the district court certified the class.

Comcast appealed the decision to the U.S. Court of Appeals for the Third Circuit, which affirmed the certification order.

In its ruling, the Third Circuit said "[w]e have not reached the stage of determining on the merits whether the methodology [offered by Plaintiffs] is a just and reasonable inference or speculative."

The court also concluded that Comcast's "attacks on the merits of the methodology" had "no place in the class certification inquiry."

In its 11-page majority opinion Wednesday, the nation's high court ruled that the Third Circuit erred in refusing to decide whether the plaintiff class' proposed damages model could show damages on a class-wide basis.

Citing the Federal Judicial Center's Reference Manual on Scientific Evidence, the majority held that the first step in a damages study is the "translation of the legal theory of the harmful event into an analysis of the economic impact of that event."

"The District Court and the Court of Appeals ignored that first step entirely," Justice Antonin Scalia wrote for the majority, reversing the Third Circuit's judgment.

Chief Justice John Roberts and justices Anthony Kennedy, Clarence Thomas and Samuel Alito joined Scalia in the majority opinion.

Justices Stephen Breyer and Ruth Bader Ginsburg dissented, joined by justices Sonia Sotomayor and Elena Kagan.

DRI: The Voice of the Defense Bar, which filed an amicus brief in the case last year, applauded the court's ruling.

"The Third Circuit's approach to class certification would have allowed plaintiffs to obtain certification without showing a reasonable likelihood that they will be able to prove their class-wide claims (predominately) by common evidence," it said in a statement Wednesday.

"This would have significantly lowered class plaintiffs' burden under Rule 23 and resulted in the certification of many more non-meritorious class actions."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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