Comcast 2010 Annual Report Download - page 93

Table of Contents
The minority owners in certain of our technology
development ventures also have rights to trigger an exit
process after a certain period of time based on the fair value
of the entities at the time the exit process is triggered.
Antitrust Cases
We are defendants in two purported class actions originally
filed in December 2003 in the United States District Courts
for the District of Massachusetts and the Eastern District of
Pennsylvania. The potential class in the Massachusetts case,
which has been transferred to the Eastern District of
Pennsylvania, is our customer base in the “Boston Cluster”
area, and the potential class in the Pennsylvania case is our
customer base in the “Philadelphia and Chicago Clusters,” as
those terms are defined in the complaints. In each case, the
plaintiffs allege that certain customer exchange transactions
with other cable providers resulted in unlawful horizontal
market restraints in those areas and seek damages under
antitrust statutes, including treble damages.
Classes of Philadelphia Cluster and Chicago Cluster
customers were certified in May 2007 and October 2007,
respectively. In March 2009, as a result of a Third Circuit
Court of Appeals decision clarifying the standards for class
certification, the order certifying the Philadelphia Cluster
class was vacated without prejudice to the plaintiffs filing a
new motion. In January 2010, in its decision on the plaintiffs’
new motion, the Eastern District of Pennsylvania certified a
class subject to certain limitations. In June 2010, the Third
Circuit Court of Appeals granted our petition for an
interlocutory appeal from the class certification decision. In
March 2010, we moved for summary judgment dismissing all
of the plaintiffs’ claims in the Philadelphia Cluster; the
summary judgment motion is stayed pending the class
certification appeal. The plaintiffs’ claims concerning the
other two clusters are stayed pending determination of the
Philadelphia Cluster claims.
We also 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 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 defendants. The plaintiffs allege that
the defendants who produce video programming have
entered into agreements with the defendants who distribute
video programming via cable and satellite (including us),
which preclude the distributor defendants from reselling
channels to customers on an “unbundled” basis in violation of
federal antitrust laws. The plaintiffs seek treble damages and
injunctive relief requiring each distributor defendant to resell
certain channels to its customers on an “unbundled” basis. In
October 2009, the Central District of California issued an
order dismissing the plaintiffs’ complaint with prejudice. The
plaintiffs have appealed that order to the Ninth Circuit Court
of Appeals. Oral argument on the appeal has been scheduled
for March 2011.
In addition, we are the defendant in 22 purported class
actions filed in federal district courts throughout the country.
All of these actions have been consolidated by the Judicial
Panel on Multidistrict Litigation in the United States District
Court for the Eastern District of Pennsylvania for pre-trial
proceedings. In a consolidated complaint filed in November
2009 on behalf of all plaintiffs in the multidistrict litigation, the
plaintiffs allege that we improperly “tie” the rental of set-top
boxes to the provision of premium cable services in violation
of Section 1 of the Sherman Antitrust Act, various state
antitrust laws and unfair/deceptive trade practices acts in
California, Illinois and Alabama. The plaintiffs also allege a
claim for unjust enrichment and seek relief on behalf of a
nationwide class of our premium cable customers and on
behalf of subclasses consisting of premium cable customers
from California, Alabama, Illinois, Pennsylvania and
Washington. In January 2010, we moved to compel
arbitration of the plaintiffs’ claims for unjust enrichment and
violations of the unfair/deceptive trade practices acts of
Illinois and Alabama. In September 2010, the plaintiffs filed
an amended complaint alleging violations of additional state
antitrust laws and unfair/deceptive trade practices acts on
behalf of new subclasses in Connecticut, Florida, Minnesota,
Missouri, New Jersey, New Mexico and West Virginia. In the
amended complaint, plaintiffs dropped their unjust
enrichment claim, as well as their state law claims on behalf
of the Alabama, Illinois and Pennsylvania subclasses. In
November 2010, the court stayed the case until the United
States Supreme Court renders its decision in AT&T Mobility
LLC v. Concepcion.
The West Virginia Attorney General also filed a complaint in
West Virginia state court in July 2009 alleging that we
improperly “tie” the rental of set-top boxes to the provision of
premium cable services in violation of the West Virginia
Antitrust Act and the West Virginia Consumer Credit and
Protection Act. The Attorney General also alleges a claim for
unjust enrichment/restitution. We removed the case to the
United States District Court for West Virginia, and it was
subsequently transferred to the United States District Court
for the Eastern District of Pennsylvania and consolidated with
the multidistrict litigation described above. In March 2010, the
Eastern District of Pennsylvania denied the Attorney
General’s motion to remand the case back to West Virginia
state court. In June 2010, the Attorney General moved to
sever and remand the portion of the claims seeking civil
penalties and injunctive relief back to West Virginia state
court. We filed a brief in opposition to the motion in July
2010.
ERISA Litigation
We and several of our current officers have been named as
defendants in a purported class action lawsuit filed in the
United States District Court for the Eastern District of
Pennsylvania in February 2008. The potential class
comprises participants in our retirement investment (401
(k)) plan that invested in the plan’s company stock account.
The plaintiffs assert that the defendants breached their
fiduciary duties under the Employee Retirement Income
Security Act of 1974 (ERISA) in managing the plan by
allowing participants