Comcast 2007 Annual Report Download - page 68

In the Southern District of New York actions (item (i) above), the
court dismissed all claims. The plaintiffs appealed this decision, and
the Court of Appeals for the Second Circuit denied the plaintiffs’
appeal and subsequent petition for rehearing. The U.S. Supreme
Court denied plaintiffs’ petition for further appeal. The Delaware case
(item (ii) above) was transferred to the United States District Court for
the Southern District of New York. The court dismissed the Sec-
tion 16(b) claims, and the breach of fiduciary duty claim for lack of
federal jurisdiction. The Court of Appeals for the Second Circuit
denied the plaintiffs’ appeal from the decision dismissing the Sec-
tion 16(b) claims, and the U.S. Supreme Court denied the plaintiffs’
petition for a further appeal. Plaintiffs recommenced the breach
of fiduciary duty claim in Delaware Chancery Court. In October
2007, we settled with plaintiffs, our portion of which was $40 million.
The settlement was approved by the Bankruptcy Court and the
lawsuit has been dismissed. As a result, we recorded $40 million to
selling, general and administrative expenses for the year ended
December 31, 2007.
Antitrust Cases
We are defendants in two purported class actions originally filed in
the United States District Courts for the District of Massachusetts
and the Eastern District of Pennsylvania (“Eastern District”),
respectively. The potential class in the Massachusetts case is our
subscriber base in the “Boston Cluster” area, and the potential
class in the Pennsylvania case is our subscriber base in the
“Philadelphia and Chicago Clusters,” as those terms are defined in
the complaints. In each case, the plaintiffs allege that certain sub-
scriber exchange transactions with other cable providers resulted
in unlawful horizontal market restraints in those areas and seek
damages under antitrust statutes, including treble damages.
Our motion to dismiss the Pennsylvania case on the pleadings was
denied and classes of Philadelphia Cluster and Chicago Cluster
subscribers were certified. Our motion to dismiss the Massachu-
setts case, which was recently transferred to the Eastern District of
Pennsylvania, was also denied. We are proceeding with discovery
on plaintiffs’ claims concerning the Philadelphia Cluster. Plaintiffs’
claims concerning the other two clusters are stayed pending de-
termination of the Philadelphia Cluster claims.
In addition, we are among the defendants in a purported class
action filed in the United States District Court for the Central District
of California in September 2007. The plaintiffs allege that the defen-
dants who produce video programming (including us, among
others) have entered into agreements with the defendants who dis-
tribute video programming via cable and satellite (including us,
among others), which preclude the distributors from reselling chan-
nels to subscribers on an a la carte (or channel-by-channel) basis in
violation of federal antitrust laws. The plaintiffs seek treble damages
for the loss of their ability to pick and choose the specific channels
to which they wish to subscribe, and injunctive relief requiring each
distributor defendant to resell certain channels to its subscribers on
an a la carte basis. The potential class is comprised of all persons
residing in the United States who have subscribed to an expanded
basic level of video service provided by one of the distributor de-
fendants. We have filed motions to dismiss the plaintiffs’ case and a
hearing on our motion is scheduled for March 2008.
Securities and Related Litigation
We and several of our current and former officers have been named
as defendants in a purported class action lawsuit filed in the Eastern
District in January 2008. The alleged class comprises purchasers of
our publicly issued securities between February 1, 2007 and De-
cember 4, 2007. The plaintiff asserts that during the alleged class
period, the defendants violated federal securities laws through alleged
material misstatements and omissions relating to the Company’s
forecast results for 2007. The plaintiff seeks unspecified damages.
Other purported plaintiffs have indicated that they may commence
lawsuits based on the same types of allegations.
We, our directors and one of our current officers have been named
as defendants in a purported class action lawsuit filed in the East-
ern District in February 2008. The alleged class comprises
participants in our retirement-investment (401(k)) plan that invested
in the plan’s company stock account. The plaintiff asserts that the
defendants breached their fiduciary duties in managing the plan.
The plaintiff seeks unspecified damages.
Patent Litigation
We are a defendant in several unrelated lawsuits claiming infringe-
ment of various patents relating to various aspects of our busi-
nesses. In certain of these cases other industry participants are
also defendants, and also in certain of these cases we expect that
any potential liability would be in part or in whole the responsibility
of our equipment vendors under applicable contractual indem-
nification provisions.
***
We believe the claims in each of the actions described above in
this item are without merit and intend to defend the actions vigor-
ously. The final disposition of the claims in each of the actions is not
expected to have a material adverse effect on our consolidated
financial position, but could possibly be material to our consolidated
results of operations or cash flows for any one period. Further, no
assurance can be given that any adverse outcome would not be
material to our consolidated financial position.
Other
We are subject to other legal proceedings and claims that arise in
the ordinary course of our business. The amount of ultimate liability
with respect to such actions is not expected to materially affect
our financial position, results of operations or cash flows.
Comcast 2007 Annual Report on Form 10-K 66