The Supreme Court narrowly ruled in favor of Comcast on Wednesday, holding that a group of its Philadelphia area subscribers claiming they were overcharged could not sue the cable operator in a certified class action.
The high court’s 5-4 decision could have implications well beyond the cable TV business, as it places limitations on how consumers can pursue cases against companies as a class.
Justice Antonin Scalia, writing for the majority, said that the class had been improperly certified by a lower court, finding fault in a model used to determine damages and in turn to certify the class action. More than 2 million current and former Comcast customers were part of the class, certified by a district court and approved by the 3rd Circuit Court of Appeals.
“Prices whose level above what an expert deems ‘competitive’ has been caused by factors unrelated to an accepted theory of ‘antitrust’ harm are not ‘anticompetitive’ in any sense relevant here,” Scalia wrote.
The plaintiffs in the antitrust suit claimed that the swapping of systems to bolster market share within a particular region led to higher prices. The practice is called “clustering,” or concentrating operations within a particular region.
Comcast had argued that the class of plaintiffs did not have a commonality of interest.
The plaintiffs, six customers of Comcast, brought the suit in 2003, alleging conduct that shut out competition and eventually led to higher prices. A district court ruled in their favor in their efforts to sue as a class, something that is potentially more far reaching for Comcast, particularly when it comes to damages. The 3rd Circuit ruled that the district court “did not exceed its permissible discretion” in certifying the class or determining that there would be a methodology to determine damages.
In their decision, the 3rd circuit noted that Comcast’s share of the Philadelphia market “allegedly” increased from 23.9% in 1998 to 77.8% in 2002, settling at 69.5% in 2007.
Comcast also argued that the FCC and antitrust authorities approved the clustering in the Philadelphia market.
Justice Ruth Bader Ginsburg and Justice Stephen Breyer wrote in a dissent that the Supreme Court took the case prematurely. “Incautiously entering the fray at this interlocutory stage, the Court sets forth a profoundly mistaken view of antitrust law,” they wrote. The were joined by Justices Sonia Sotomayor and Elena Kagan.