Comcast Class Action Unlikely to Net Billions

SAN FRANCISCO (CN) — A class action claiming Comcast siphons billions of dollars from cable TV subscribers through phony, undisclosed fees is unlikely to net a big payout, a federal judge said Thursday.

“The case seems to be worth very little money in any event, and the claims of plaintiffs are sketchy,” U.S. District Judge Vince Chhabria said during a hearing on a motion to dismiss.

Lead plaintiff Dan Adkins sued Comcast in October 2016, claiming it added "newly invented" fees to cable bills, raising customers’ monthly charges above the prices they were promised when they signed up.

Lead class counsel Daniel Hattis said Comcast misrepresented the total cost of its TV bundles by charging up to $10 extra each month in “broadcast TV” and “regional sports” fees, which it tried to pass off as government-imposed taxes.

The complaint cites web chats with Comcast agents, who told consumers and subscribers they would not incur extra charges on their bills beyond taxes, and that the disputed fees were in fact government required fees, though they are not.

However, because customers have the option to cancel service and get a full refund within 30 days, Chhabria said the case is “potentially worth very little money.”

Adkins was named lead plaintiff less than 30 days after he signed up for service. Instead of suing the nation's largest cable-media company, he could have simply canceled his subscription and received a full refund, Comcast attorney Seamus Duffy argued.

Chhabria replied: “He still has a claim for being duped into signing up for service.”

In its motion to dismiss, Comcast said it charges the fees to recover some of the costs of “retransmitting broadcast TV signals” and “distributing regional sports networks.” It says Congress “encouraged” it to itemize those costs as separate charges when it passed the Cable Television Consumer Protection and Competition Act of 1992, in an attempt to “educate consumers about the cause of bill increases.”

Nevertheless, the plaintiffs say Comcast failed to clearly disclose those hidden fees and charges when it quoted prices to customers who were signing up for service.

Chhabria did not find Comcast’s direct mail ads and itemized bills particularly misleading, but he did find the failure to clearly disclose extra fees during the signup process sufficient to support a claim of misrepresentation.

Duffy said the extra fees were clearly disclosed in contracts signed by customers and in a separate link to terms of service in the online ordering process.

“The problem is, two contradictory representations were made,” Chhabria replied. “You have the contract terms, but the order summary doesn't mention those fees.”

Chhabria said the order summary, which quoted a lower monthly price than the actual total, was displayed more prominently than a link to the terms of service.

Duffy countered that the contract documents deserve greater focus and attention when analyzing Comcast’s liability.

“It's not unusual to have a monthly recurring charge,” Duffy said. “That's what customers expect.”

The Comcast attorney said Adkins and others agreed to be bound by the contractual terms when they signed up.

“At least the contract claim should be dismissed because the contract says those charges will be included,” Duffy said.

Chhabria said he would dismiss with leave to amend, and that the plaintiffs have “some cleaning up to do” before they file an amended complaint.

He stayed ruling on whether six out-of-state named plaintiffs could also sue Comcast over the fees, pending resolution of a Supreme Court case set to be decided in June. A ruling in Bristol-Myers Squibb Co. v. San Francisco County Superior Court will determine whether out-of-state plaintiffs can sue an out-of-state entity like Comcast, headquartered in Pennsylvania, for injuries suffered in a separate state.

All eight named plaintiffs in the Adkins suit opted out of Comcast’s arbitration clause, which would have forced them to resolve their claims outside of court.

A second federal class action against Comcast was filed in San Francisco last week by lead plaintiff Joseph Loomis, who did not opt out of the arbitration clause but claims it is unenforceable under California law.

Internet and cable TV providers are among the most-hated companies in America, according to numerous customer surveys, and the Yahoo Finance website reported in January that Comcast leads the list.

Comcast is the nation’s largest cable-media company and the 35^th largest publicly traded company on the planet, with $74.5 billion in annual revenue and $148.2 billion in market capitalization as of May 2016, according to Forbes.

Comcast did not immediately respond to an email seeking comment Thursday.

Follow @NicholasIovino

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