The Supreme Court yesterday threw out a class action lawsuit against Comcast (NASDAQ: CMCSA ) that had been brought by 2 million current and former Comcast customers citing competition concerns.
A post on the Supreme Court justices' official blog said Justice Antonin Scalia's opinion for the Court "held that the class action in that case had been improperly certified under Rule 23(b)(3). The Third Circuit erred in refusing to decide whether the plaintiff class's proposed damages model could show damages on a classwide basis. Under proper standards, the model was inadequate and the class should not have been certified."
The Court's opinion said the plaintiffs were suing Comcast for creating a monopoly by buying up smaller cable operations in the Philadelphia area, and that Comcast then charged customers rates above competitive prices. Comcast's share of customers in the Philadelphia region grew from just under 24% in 1998 to 69.5% in 2007, according to the Court's ruling.
The ruling said, "The first step in a damages study is the translation of the legal theory of the harmful event into an analysis of the economic impact of that event. The District Court and the Court of Appeals ignored that first step entirely." The vote was 5-4 with Justices Breyer and Ginsburg writing a joint dissent, and Justices Sotomayor and Kagan joining.