Time Warner Cable 2008 Annual Report Download - page 143

other cable and satellite providers (collectively, the “distributor defendants”), alleged violations of Sections 1 and 2
of the Sherman Antitrust Act. Among other things, the complaint alleged coordination between and among the
programmer defendants to sell and/or license programming on a “bundled” basis to the distributor defendants, who
in turn purportedly offer that programming to subscribers in packaged tiers, rather than on a per channel (or “à la
carte”) basis. Plaintiffs, who seek to represent a purported nationwide class of cable and satellite subscribers,
demand, among other things, unspecified treble monetary damages and an injunction to compel the offering of
channels to subscribers on an “à la carte” basis. On December 3, 2007, plaintiffs filed an amended complaint in this
action (the “First Amended Complaint”) that, among other things, dropped the Section 2 claims and all allegations
of horizontal coordination. On December 21, 2007, the programmer defendants, including Time Warner, and the
distributor defendants, including TWC, filed motions to dismiss the First Amended Complaint. On March 10, 2008,
the court granted these motions, dismissing the First Amended Complaint with leave to amend. On March 20, 2008,
plaintiffs filed a second amended complaint (the “Second Amended Complaint”) that modified certain aspects of
the First Amended Complaint in an attempt to address the deficiencies noted by the court in its prior dismissal order.
On April 22, 2008, the programmer defendants, including Time Warner, and the distributor defendants, including
the Company, filed motions to dismiss the Second Amended Complaint, which motions were denied by the court on
June 25, 2008. On July 14, 2008, the programmer defendants and the distributor defendants filed motions requesting
the court to certify its June 25, 2008 order for interlocutory appeal to the U.S. Court of Appeals for the Ninth Circuit,
which motions were denied by the district court on August 4, 2008. On November 14, 2008, Time Warner was
dismissed as a programmer defendant, and Turner Broadcasting System, Inc. was substituted in its place. The
Company intends to defend against this lawsuit vigorously.
On June 22, 2005, Mecklenburg County filed suit against TWE-A/N in the General Court of Justice District
Court Division, Mecklenburg County, North Carolina. Mecklenburg County, the franchisor in TWE-A/N’s
Mecklenburg County cable system, alleges that TWE-A/N’s predecessor failed to construct an institutional
network in 1981 and that TWE-A/N assumed that obligation upon the transfer of the franchise in 1995.
Mecklenburg County is seeking compensatory damages and TWE-A/N’s release of certain video channels it is
currently using on the cable system. On April 14, 2006, TWE-A/N filed a motion for summary judgment, which is
pending. TWE-A/N intends to defend against this lawsuit vigorously.
On June 16, 1998, plaintiffs in Andrew Parker and Eric DeBrauwere, et al. v. Time Warner Entertainment
Company, L.P. and Time Warner Cable filed a purported nationwide class action in U.S. District Court for the
Eastern District of New York claiming that TWE sold its subscribers’ personally identifiable information and failed
to inform subscribers of their privacy rights in violation of the Cable Communications Policy Act of 1984 and
common law. The plaintiffs seek damages and declaratory and injunctive relief. On August 6, 1998, TWE filed a
motion to dismiss, which was denied on September 7, 1999. On December 8, 1999, TWE filed a motion to deny
class certification, which was granted on January 9, 2001 with respect to monetary damages, but denied with respect
to injunctive relief. On June 2, 2003, the U.S. Court of Appeals for the Second Circuit vacated the district court’s
decision denying class certification as a matter of law and remanded the case for further proceedings on class
certification and other matters. On May 4, 2004, plaintiffs filed a motion for class certification, which the Company
opposed. On October 25, 2005, the court granted preliminary approval of a class settlement arrangement, but final
approval of that settlement was denied on January 26, 2007. The parties subsequently reached a revised settlement
to resolve this action on terms that are not material to the Company and submitted their agreement to the district
court on April 2, 2008. On May 8, 2008, the district court granted preliminary approval of the settlement, but it is
still subject to final approval by the district court, and there can be no assurance that the settlement will receive this
approval. Absent the issuance of final court approval of the revised settlement, the Company intends to defend
against this lawsuit vigorously.
Certain Patent Litigation
On September 1, 2006, Ronald A. Katz Technology Licensing, L.P. (“Katz”) filed a complaint in the
U.S. District Court for the District of Delaware alleging that TWC and several other cable operators, among
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)