Supreme Court Comcast Case

 

Comcast Corp. v. Behrend, No. 11-864, 2013 WL 1222646 (Mar. 27, 2013)

In a 5-4 decision, the Supreme Court of the United States overturned the lower courts’ rulings to grant class certification for the plaintiffs’ antitrust claims.  Although this case dealt with antitrust violations, Defense Attorneys will try to apply the principles expressed in this decision to employment class actions.

The plaintiffs’ consisted of over 2 million current and former Comcast Cable subscribers, in 16 different counties of Pennsylvania.  The plaintiffs alleged that Comcast violated antitrust laws by swapping their systems outside the Philadelphia area for competitor systems inside the Philadelphia area since this strategy lessens competition and leads to above competitive prices.  The plaintiffs’ moved for class certification under Federal Rule of Civil Procedure 23(b)(3), which requires that “questions of law or fact common to class members predominate over any questions affecting only individual members,” and sought over $875 million in damages.  The issue in this case was whether the damages could be calculated on a class-wide basis.  The plaintiffs’ provided 4 theories of the antitrust impact based on expert testimony and calculated damages based on all 4 of those theories.  However, only 1 of those theories (deterrence of overbuilding) was accepted by the lower courts.  The Supreme Court found that the lower courts erred in granting class certification because the damages should have been calculated based only on the theory accepted by the courts.  The Supreme Court goes on to state that “[i]n light of the model’s inability to bridge the differences between supra-competitive prices in general and supra-competitive prices attributable to the deterrence of overbuilding, Rule 23(b)(3) cannot authorize treating subscribers within the Philadelphia [area] as members of a single class.”

Comcast may not have changed any principles regarding class certification.  As the dissent states, “The Court’s ruling is good for this day and case only.  In the mine run of cases, it remains the ‘black letter rule’ that a class may obtain certification under Rule 23(b)(3) when liability questions common to the class predominate over damages questions unique to class members.”  Even the Court’s dicta states “[t]his methodology might have been sound, and might have produced commonality of damages, if all four of those alleged distortions remained in the case.”