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Monday, December 9, 2019

Okla. federal judge overturns jury's $19M verdict against Cox Communications

By Vimbai Chikomo | Jan 8, 2016


OKLAHOMA CITY (Legal Newsline) - After a jury awarded plaintiffs $6.31M, trebled to $19M, in an antitrust class action lawsuit against Cox Communications, the cable telecommunications company breathed a sigh of relief when a judge overturned the jury’s verdict.

“The judge actually overturned the jury decision, so we actually won,” said Todd Smith, spokesperson for Cox Communications. “It happened about 7-10 days after the initial ruling. So we are very happy that the judge agreed with us."

On Nov. 12, 2015, U.S. District Judge Robin Cauthron made the decision to overturn the verdict almost 2 weeks after what many considered to be a significant ruling in favor of cable TV subscribers displeased with the cost of renting cable boxes.

Cauthron ruled that the evidence presented did not support a $6.31M verdict.

According to the complaint, the plaintiffs alleged that Cox violated the Sherman Act by illegally tying its premium cable services to its set-top box rentals. They also alleged that Cox created barriers preventing other companies from offering third-party set-top boxes.

Cox argued that it rents out the boxes because users need the boxes to use the services provided by the company and that there was no other place users could get them. Other services brought into question were interactive content, program guides, pay-per-view and parental controls.

In addition, Cox argued that the allegation that it conspired to block set-top boxes from being purchased on eBay was simply an attempt to prevent the potential circulation of stolen boxes, not proof of an illegal tying arrangement.

After deliberations, the jury awarded damages based on the plaintiffs’ set-top box rental fees. Since no damages were awarded based on DVR fees, the amount the jury awarded was far less than the $49M the plaintiffs sought.

In her decision, Cauthron found that even though Cox required its customers to rent a set-top box to receive premium cable, the plaintiffs failed to provide sufficient evidence that the arrangement led to substantial foreclosure and injury.

Cauthron concluded that because the set-top box could not be purchased from another entity, Cox could not be charged with exploiting the market or squashing competition, especially since there was no evidence that a competitor wished to sell the boxes.

She further noted that the jury saw no evidence indicating that manufacturers failed to enter the market as a result of Cox’s arrangement with its customers, and that the plaintiffs failed to show that Cox’s customers had been harmed because of Cox’s rental policy.

The plaintiffs are appealing Cauthron’s ruling.

There have been many class action lawsuits filed against cable providers, and some are still pending. In 2014, Comcast, which is the largest cable television company in the world, reached a $50M settlement in a lawsuit claiming it overcharged its cable subscribers.

While the outcome of the Oklahoma case was favorable to Cox, the company did not have the same fortune in a recent online piracy lawsuit in Virginia. On Dec. 17, a jury ordered Cox to pay $25 million in damages to music publisher BMG.

Cox Communications is one of the largest broadband and entertainment companies in the country, and provides digital video, internet, telephone and home automation services. It is headquartered in Atlanta and is the third-largest cable television provider in the U.S.

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