Antitrust Law Daily Wrap Up, ANTITRUST—WDOkla: Cable Provider’s Motion to Dismiss Consumer Antitrust Suit Denied, (Jan 11, 2013)

By Jeffrey May, J.D.

Cable television provider Cox Communications Inc. failed to convince the federal district court in Oklahoma City, Oklahoma, to dismiss a putative antitrust class action brought on behalf of Oklahoma City consumers who purchased premium cable from Cox and were required to rent a set-top box from the company. The suit alleges that Cox abuses its substantial economic power in the market for premium cable by forcing subscribers, as a condition of purchasing its premium cable services, to rent the set-top boxes that it distributes (Healy v. Cox Communications Inc., January 9, 2013, Cauthron, R.).

This suit followed failed attempts to certify a national class against Cox for the same conduct. The national class could not be certified because of differences in the geographic markets. The plaintiff now limits the suit to the Oklahoma City premium cable market.

Cox argued that the relevant geographic market was not properly defined. At this stage of the litigation, the geographic market was properly pleaded, the court ruled. Rejected was Cox's argument that the definition was inadequate because it ignored “the relevant competitive forces at play in the defined region.”

According to Cox, there was no way to know if it had market power in the geographic area because the definition ignored the fact that within its Oklahoma City service area, customers might have many different options for multi-channel video programming distribution. However, Cox was challenging the plaintiff's ability to prevail rather than whether the case was properly pleaded. Whether Cox had sufficient market power was an issue for resolution at summary judgment or on the merits, the court explained.

The court also rejected Cox's statute of limitations argument that the plaintiff’s damages had to be limited to injury occurring since April 2008 (four years prior to the filing of the suit). The failed national antitrust class action tolled the statute of limitations, according to the court.

Cox unsuccessfully argued that the consumer's claims were not tolled because the pendency of a previously filed class action did not toll the limitations period for additional class actions by putative members of the originally asserted class. If the plaintiff were pursuing individual claims, then the limitations period would be tolled for those claims. To deny the same plaintiff tolling simply because the plaintiff chose to take advantage of the class action procedure would run counter to the goals of Federal Rule of Civil Procedure 23, the court reasoned.

This is Case 5:12-cv-00481-C.

Michael J. Blaschke for Richard Healy. Helen G. Guyton (Mintz Levin Cohn Ferris Glovsky & Popeo) for Cox Communications Inc.

Cases: Antitrust OklahomaNews