Comcast has beaten back an attempt by a class of plaintiffs to enforce a proposed settlement with the cable company in an antitrust case that subsequently was granted certiorari by the U.S. Supreme Court.
The parties in Behrend v. Comcast disputed whether they struck a final settlement in a case involving up to 2 million subscribers in the Philadelphia area who alleged Comcast has been monopolistic and stymied competition in the Philadelphia marketplace.
U.S. District Judge John R. Padova of the Eastern District of Pennsylvania has now denied the plaintiffs’ motion to enforce the settlement, ruling the term sheet of the proposed settlement is not capable of being summarily enforced as a binding agreement to settle the dispute.
Padova found the terms on the sheet were not fully negotiated. He said it was clear “the parties intended to execute a more formal contract in the future.”
“In such circumstances, the law requires that, to be enforceable on its own, the informal contract must demonstrate that there was a meeting of the minds on all of the terms of the parties’ agreement,” Padova said. “Given the material terms left unresolved in the term sheet and the content of the draft agreements that the class subsequently forwarded to Comcast, we cannot conclude as a matter of law that the undisputed facts objectively establish a meeting of the minds.”
Comcast’s certiorari petition was pending when the terms of the settlement were being negotiated. The exact amount of the alleged settlement is unknown because Padova entered an order to seal the settlement papers.
The Supreme Court, in granting certiorari on June 25, has agreed to consider a district court’s ability to certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a classwide basis.
In a letter addressed to Padova on June 13, defense counsel Michael P. Carroll of Davis Polk & Wardwell in New York and plaintiffs’ counsel Barry Barnett of Susman Godfrey in Dallas said, “The parties are pleased to inform the court they have reached a tentative agreement to resolve the above-referenced actions. The parties expect to have the legal documentation necessary to finalize the settlement prepared by June 30, after which the settlement will be presented to your honor for preliminary approval, to be followed by notice to the three classes and a settlement hearing.”
The plaintiffs argued in court papers that the Supreme Court’s June 25 order does not lessen “this Fortune 50 corporation’s duty to abide by the bargain its senior vice president and lawyers made and signed on June 11, confirmed in emails on June 12 and 13, and ask this court to grant relief on the basis of by letter on June 13,” according to a motion signed by Barnett and Daniel H. Charest of Susman Godfrey; Samuel D. Heins, Vincent J. Esades, David Woodward, Jessica N. Servais and Katherine T. Kelly of Heins Mills & Olson in Minneapolis; and Joseph Goldberg of Freedman Boyd Hollander Goldberg Ives & Duncan in Albuquerque, N.M.
The plaintiffs also argued that Comcast failed to inform the Supreme Court of the settlement, according to the plaintiffs’ court papers.
Comcast, however, said that “a Supreme Court appeal is not mooted until after district court approval of a proposed class action settlement,” according to Comcast’s response signed by Darryl J. May of Ballard Spahr in Philadelphia; Carroll, Arthur J. Burke and Dana M. Seshens of Davis Polk; and Sheron Korpus of Kasowitz Benson Torres & Friedman.
Comcast also rejected as unfounded the argument that it abdicated its duties to inform the Supreme Court of the parties’ tentative agreement, according to court papers.
According to Padova’s opinion, Comcast informed plaintiffs’ counsel on June 26, the day after certiorari was granted, that it no longer wished to pursue settlement. The company also said there were new terms the plaintiffs added to the proposed settlement that Comcast did not agree with, demonstrating no meeting of the minds.
“We find that the term sheet is incomplete in significant respects and cannot be summarily enforced,” Padova said in his Tuesday opinion.
Padova said the class itself called the term sheet an “‘outline of a tentative agreement.’” He said four of the nine terms listed by the parties were expressly subject to further discussion and negotiation. One of the most important of those terms to Padova’s analysis, he said, was the fact that the services portion of the monetary term, which constituted two-thirds of the settlement fund, was never finalized. While the parties agreed on the value of that portion of the fund, they didn’t agree on what services would be available to the class members or how the services would be valued, Padova said.
The judge also noted that the term sheet did not say when Comcast would withdraw its certiorari petition, which was pending at that time.
Padova also granted Comcast’s motion to stay the trial and pretrial proceedings pending the Supreme Court’s resolution of the issue before it.
Calls to Carroll of Davis Polk and Barnett of Susman Godfrey were not returned. A spokeswoman for Comcast said the company wouldn’t comment on continuing litigation.
(Copies of the 15-page opinion in Behrend v. Comcast, PICS No. 12-1836, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •