A Philadelphia federal district judge has granted preliminary approval of a $15.5 million class action settlement against the cable giant Comcast.
The proposed settlement stems from claims that the Philadelphia-based communications company unlawfully tied the sale of its premium cable service to the rental of a set-top box. U.S. District Judge Anita Brody of the Eastern District of Pennsylvania gave preliminary approval Wednesday to the settlement, finding that the terms appeared to be fair and supported by the discovery that had taken place.
“Because of the formal and informal discovery and the parties’ multiple rounds of briefing on the arbitration issue, class counsel knew the strengths and weaknesses of the case during settlement negotiations with Comcast,” Brody said. “Therefore, the investigation of plaintiffs’ claims supports preliminary approval of the proposed settlement.”
Brody, however, also determined that the there were several problems with the notice and the claim form. She ordered the plaintiffs to resubmit revised versions of those before she would consider final approval.
The proposed settlement would resolve the multidistrict litigation, In re Comcast Corp. Set-Top Cable Television Box Antitrust Litigation. According to the list of MDLs as of mid-August, only two actions were pending, but according to Brody’s opinion there are more than 3.5 million proposed class members.
The proposed settlement is meant to compensate current and former Comcast subscribers from Washington, California and West Virginia, who, beginning in 2005, rented a set-top box. Comcast, according to the allegations, had made renting the set-top box mandatory for the subscribers who opted for premium cable, which included high-definition channels and the ability to purchase other channels, such as HBO.
The plaintiffs claimed that tying the cable box to the premium cable package was anti-competitive and led them to pay “supracompetitive” prices.
The proposed settlement includes between $10 and $15 in cash for former users, and current users also have the option of receiving in-kind relief, including free movie rentals. The value of the in-kind relief, according to Brody, ranged from $5.99 to $59.95.
In approving the settlement, Brody said the disparity between the amount that could be collected for current versus former uses did not constitute favoritism for one group over the another. She noted that although the costs to the consumers are different, the cost to Comcast to provide the relief is roughly the same.
“The $59.95 maximum value of in-kind relief that a current subscriber may receive only costs Comcast $15, or less,” she said. “At best, the in-kind relief is equivalent to the cash payments available to all putative class members.”
Both Dianne Nast of NastLaw, who is representing the plaintiffs, and Jaime Bianchi of White & Case, who is representing Comcast, did not return a call for comment.