Antitrust Law Daily Wrap Up, ANTITRUST NEWS: High Court denies review of cable tying class action decision, (Jan 11, 2016)

By Greg Hammond, J.D.

The U.S. Supreme Court today denied review of a petition for certiorari from Cox Communications, Inc., seeking review of a decision by the U.S. Court of Appeals in Washington, D.C., which upheld a ruling that Cox waived its right to arbitrate a class action antitrust suit filed by its customers. Consumers alleged that the company illegally tied its premium cable service to rental of a Cox set-top box.

In its petition, Cox asked: (1) whether, in a putative class action, a defendant waives its right to compel arbitration of the claims of absent class members by not filing its motion to compel arbitration until after the court has obtained jurisdiction over class members by certifying a class; (2) whether, as the D.C. Circuit has held and the Tenth Circuit suggested below, a defendant waives its right to compel arbitration by filing a motion for summary judgment simultaneously with a motion to compel arbitration or, as the Fifth Circuit has held, a defendant may file alternative motions to compel arbitration or for judgment on the merits; and (3) whether a reduction in the size of a class constitutes prejudice to plaintiffs sufficient to support a waiver of the defendant’s arbitration rights with respect to absent class members (Cox Communications, Inc. v. Healy, Dkt. 15-466).

Fraud conspiracy. Separately, three former UBS AG executives were also denied review of a decision entered by the U.S. Court of Appeals in New York City, in an action brought by the Department of Justice Antitrust Division. The appellate court refused to overturn their convictions for participating in fraud schemes concerning bidding on contracts for the investment of municipal bond proceeds. They asked whether 18 U.S.C. §3293(2), which extends the statute of limitations for mail or wire fraud from five to ten years if the fraud “affects a financial institution,” applies where the defendant is a bank employee, the bank is a culpable actor, and the alleged effect is that the bank made payments to settle, or incurred legal fees to defend, certain civil, regulatory and criminal actions. In other words, does the statute apply where the bank “affects itself?”

The Antitrust Division brought the initial charges against the three executives in December 2010. A six-count superseding indictment against the executives was then filed in September 2011. Following a jury trial, all three defendants were convicted of conspiracy to commit wire fraud in violation of 18 U.S.C. §§ 371 and 1349, and two of the executives were additionally convicted of wire fraud in violation of 18 U.S.C. § 1343. The appellate court affirmed, finding that the superseding indictment naming the individuals was not time-barred and rejecting the remaining arguments that challenged the convictions on the ground that they were without merit (Heinz v. U.S., Dkt. 15-432).

Companies: UBS AG; Cox Communications, Inc.

News: Antitrust AntitrustDivisionNews