Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—1st Cir.: Consumer suit for cable company credits reinstated, (Jul 25, 2014)

By Greg Hammond, J.D.

Claims that a cable company violated Massachusetts law by failing to provide consumers with credits, after a snowstorm caused service interruptions, should not have been dismissed, the U.S. Court of Appeals in Boston decided. In reversing the lower court’s dismissal, the appeals court determined that consumers stated a valid claim under the Massachusetts Unfair and Deceptive Trade Practices Statute (MUDTPS) (Cooper v. Charter Communications Entertainments I, LLC, July 23, 2014, Kayatta, W.).

Background. In October 2011, Massachusetts residents experienced a severe snow storm that brought down power and cable lines, resulted in power outages, and caused media company Charter Communications Entertainment I, LLC’s equipment to fail. Four consumers—Bruce Cooper, John Romito, Roy Baker, and Whitney Taylor Thompson—filed suit against Charter after the company failed to provide them with credits during the interrupted cable, Internet, and telephone services. The federal district court granted Charter’s motion to dismiss after the cable company provided three of the consumers with credits, but the consumers appealed.

MUDTPS claim. Under the MUDTPS, consumers may sue for “[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” To state a valid claim under the unfairness prong of the MUDTPS, courts assess: (1) whether the practice is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; and (3) whether it causes substantial injury to consumers.

The court was mainly concerned with the first of the unfairness factors—whether the practice was within at least the penumbra of some statutory concept of unfairness. In its analysis, the court acknowledged that a failure to pay a statutorily-imposed contractual obligation would likely violate the MUDTPS. However, there was no regulation requiring that Charter provide credits, only that it promise to do so in specified circumstances. Nevertheless, the court concluded that providing a credit was at least within the penumbra of the statutory mandate that Charter promise to provide credits. As such, it concluded that Charter plausibly made out a MUDTPS claim, based on Charter’s alleged conduct. The district court’s dismissal was therefore reversed and remanded.

The case numbers are 13-1726 and 13-1736.

Attorneys: Jeffrey S. Morneau and Nathan A. Olin (Connor, Morneau & Olin, LLP) for Bruce M. Cooper, John W. Romito, Roy L. Baker, and Whitney Taylor Thompson. Robert J. Wagner, Kathleen M. Guilfoyle, Brian P. Voke (Campbell Campbell Edwards & Conroy), and Roman P. Wuller (Thompson Coburn, LLP) for Charter Communications Entertainments I, LLC and Charter Communications, Inc.

Companies: Charter Communications Entertainments I, LLC; Charter Communications, Inc.

Cases: StateUnfairTradePractices MaineNews MassachusettsNews NewHampshireNews PuertoRicoNews RhodeIslandNews