Time Warner Cable 2011 Annual Report Download - page 119

TIME WARNER CABLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2010, the plaintiffs filed a third amended consolidated class action complaint (the “Third Amended Complaint”), alleging
that the Company violated Section 1 of the Sherman Antitrust Act, various state antitrust laws and state unfair/deceptive
trade practices statutes by tying the sales of premium cable television services to the leasing of set-top converters boxes. The
plaintiffs are seeking, among other things, unspecified treble monetary damages and an injunction to cease such alleged
practices. On September 30, 2010, the Company filed a motion to dismiss the Third Amended Complaint, which the court
granted on April 8, 2011. On June 17, 2011, plaintiffs appealed this decision to the U.S. Court of Appeals for the Second
Circuit. The Company intends to defend against this lawsuit vigorously, but is unable to predict the outcome of this lawsuit
or reasonably estimate a range of possible loss.
On November 14, 2008, the plaintiffs in Mark Swinegar, et al. v. Time Warner Cable Inc., filed a second amended
complaint in the Los Angeles County Superior Court, as a purported class action, alleging that the Company provided to and
charged plaintiffs for equipment that they had not affirmatively requested in violation of the proscription in the Cable
Consumer Protection and Competition Act of 1992 (the “Cable Act”) against “negative option billing” and that such
violation was an unlawful act or practice under California’s Unfair Competition Law (the “UCL”). Plaintiffs are seeking
restitution under the UCL and attorneys’ fees. On February 23, 2009, the court denied the Company’s motion to dismiss the
second amended complaint and, on July 29, 2010, the court denied the Company’s motion for summary judgment. On
October 7, 2010, the Company filed a petition for a declaratory ruling with the Federal Communications Commission
(“FCC”) requesting that the FCC determine whether the Company’s general ordering process complies with the Cable Act’s
“negative option billing” restriction. On March 1, 2011, the FCC issued a Declaratory Ruling that informed consent is
adequate to satisfy the requirements under the Cable Act. On March 29, 2011, the Los Angeles County Superior Court
vacated its prior summary judgment ruling and, on May 12, 2011, the court granted the Company’s motion for summary
judgment. On June 13, 2011, plaintiffs filed a motion for reconsideration of the decision, which the court denied on July 28,
2011. On September 26, 2011, plaintiffs filed a notice of appeal to the California Court of Appeal for the Second District.
The Company intends to defend against this lawsuit vigorously, but is unable to predict the outcome of this lawsuit or
reasonably estimate a range of possible loss.
On September 20, 2007, Brantley, et al. v. NBC Universal, Inc., et al. was filed in the U.S. District Court for the Central
District of California against the Company. The complaint, which also named as defendants several other cable and satellite
providers (collectively, the “distributor defendants”) as well as programming content providers (collectively, the
“programmer 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, are seeking, 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 that, among other things, dropped the Section 2 claims and all allegations of horizontal coordination.
On October 15, 2009, the district court granted with prejudice a motion by the distributor defendants and the programmer
defendants to dismiss the plaintiffs’ third amended complaint, terminating the action. On April 19, 2010, plaintiffs appealed
this decision to the U.S. Court of Appeals for the Ninth Circuit and, on June 3, 2011, the court reaffirmed the district court’s
decision. On July 7, 2011, plaintiffs filed a petition for en banc rehearing and, on October 31, 2011, the U.S. Court of
Appeals for the Ninth Circuit withdrew the June 3, 2011 decision and directed that the appellate panel be reconstituted to
consider the plaintiffs’ appeal. The Company intends to defend against this lawsuit vigorously, but is unable to predict the
outcome of this lawsuit or reasonably estimate a range of possible loss.
On August 7, 2009, the plaintiffs in Jessica Fink and Brett Noia, et al. v. Time Warner Cable Inc., filed an amended
complaint in a purported class action in U.S. District Court for the Southern District of New York alleging that the Company
uses a throttling technique which intentionally delays and/or blocks a user’s high-speed data service. Plaintiffs are seeking
unspecified monetary damages, injunctive relief and attorneys’ fees. On September 6, 2011, the district court partially
granted the Company’s motion for summary judgment and/or for partial judgment on the pleadings, but denied the motion as
to two claims under the Computer Fraud and Abuse Act of 1986 (“CFAA”) and one common law fraud claim. On October
28, 2011, the district court granted the Company’s motion for reconsideration of the court’s denial of the Company’s motion
as to the two CFAA claims, dismissing the CFAA claims with prejudice. On September 30, 2011, plaintiffs filed a second
amended complaint and, on December 23, 2011, the district court granted with prejudice the Company’s motion to dismiss
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