Comcast losses bid to limit class action case

Reuters News
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Posted: Aug 21, 2012 10:00 PM
Comcast losses bid to limit class action case

(Reuters) - In the latest test of U.S. class action limits, telecoms firm Comcast Corp. lost a bid on Tuesday to force a customer who filed an antitrust class action to arbitrate individually, when a judge ruled it would be too costly for the customer.

The ruling by U.S. District Judge Stefan Underhill in New Haven, Conn. follows a U.S. Supreme Court ruling in April 2011 that upheld a class action waiver clause in AT&T Inc.'s contracts.

Since the AT&T ruling, companies have sought to avoid costly class actions by requiring consumers and employees to arbitrate their disputes individually.

In the latest case, a Comcast subscriber had filed a class action in 2009 accusing the firm of violating U.S. antitrust laws by unlawfully bundling digital voice service with a modem.

Subscribers had no choice but to pay a rental fee for the modem, the complaint said.

Comcast had sought to use the Supreme Court ruling to force Robert Fromer of Windsor, Conn. to bring his claims in arbitration, citing clauses in his subscriber agreement.

U.S. District Judge Underhill denied the motion on Tuesday, citing the cost of forcing Fromer to litigate on his own. He said Fromer might expect to recover $1 for every $202 he spent in litigation and recover damages of up to $495.

"Therefore, because the class action waiver in this case effectively precludes Fromer from pursuing federal statutory remedies, the class arbitration waiver is void," Underhill wrote.

The ruling follows a similar decision by the 2nd Circuit Court of Appeals in February finding American Express Co could not use arbitration clauses to avoid an antitrust lawsuit by merchant customers.

Representatives for Comcast did not respond to requests for comment Tuesday after normal business hours. A lawyer for Fromer also did not respond to a call or e-mail seeking comment.

The case is Fromer v. Comcast Corp., U.S. District Court for the District of Connecticut, 09-cv-02076 (Reporting by Nate Raymond in New York)