Premium Cable Subscribers Not Allowed to Bring Tying Claim as Class

This posting was written by Darius Sturmer, Editor of CCH Trade Regulation Reporter.

Subscribers to a communications company’s premium cable television programming packages who paid the company a monthly rental fee for an accompanying set-top box should not be certified as a class, for purposes of their claims that the company illegally tied and bundled the lease of the cable boxes to the ability to obtain premium cable programming services, the federal district court in Oklahoma City has determined.

Common v. Individualized Issues

While the proposed class satisfied the numerosity, commonality, typicality, and adequacy of representation requirements established by Federal Rule of Civil Procedure 23(a), it could not meet Rule 23(b)(3)’s burdens of showing that common issues would predominate over any individualized issues and that a class action was the superior method for adjudicating the action.

Federal Tying Claim

The subscribers could not prove all of the elements of a federal tying claim on a classwide basis because the determination of the company’s market power was not amenable to such proof, according to the court.

Since subscribers in different geographic areas faced different competitive alternatives to the defending company, such a determination required an evaluation of the actual competitive conditions of markets at a local—not national—level, the court explained.

Damages

Several methods introduced by the plaintiff’s expert for calculating aggregate damages suffered by the subscribers could not be utilized with common evidence, owing to the elasticity of demand and the subsequent need for individualized market data.

Moreover, a benchmark method proffered by the expert, in which he compared rental rates of set-top boxes in the United States to rates in Canada, was inappropriate given the expert’s failure to evaluate the different regulations in the countries and costs of Canadian and American cable providers.

Additionally, in light of the multiple regional analysis required to determine market power and impact, maintaining a class action would not be manageable, the court noted.

The decision is In Re: Cox Enterprises, Inc. Set-Top Cable Television Box Antitrust Litigation, 2012-1 Trade Cases ¶77,756.