Arbitration -- 2020



Tillage v. Comcast Corp.   (9th Circuit)

Arbitration of California public injunction claims

The NAM filed an amicus brief to reverse a 9th Circuit ruling that would eviscerate arbitration agreements in California. The case implicates the question of whether consumer arbitration agreements in California are enforceable if they waive a plaintiff’s right to seek a “public injunction” against the defendant company. California’s consumer protection laws generally allow a consumer to seek a public injunction that compels the defendant company to take public action to remedy the alleged consumer protection violation. In this case, for example, the plaintiffs sought a public injunction compelling Comcast to include certain broadcasting fees in the base monthly price advertised to consumers. Successful public injunction claims can force companies to undertake major and disruptive changes to their business, products or services. A federal district court and the 9th Circuit invalidated Comcast’s arbitration agreement because it contained a public injunction waiver. Comcast petitioned the full 9th Circuit to review the case en banc. In support of review, the NAM filed an amicus brief that argues the Federal Arbitration Act preempts California law and that requiring arbitration of public injunction claims frustrates and undermines the purpose and benefits of individualized arbitration. On January 14, 2020, the court denied rehearing.


Related Documents:
NAM brief  (August 20, 2019)

 

Comcast Corp. v. Tillage; AT&T Mobility LLC v. McArdle   (U.S. Supreme Court)

Arbitration of California public injunction claims

The NAM filed an amicus brief in support of AT&T and Comcast's petition for certiorari to reverse two 9th Circuit rulings in related cases that would eviscerate arbitration agreements in California. The cases implicate the question of whether consumer arbitration agreements in California are enforceable if they waive a plaintiff’s right to seek a “public injunction” against the defendant company. California’s consumer protection laws generally allow a consumer to seek a public injunction that compels the defendant company to take public action to remedy the alleged consumer protection violation. In this case, for example, the plaintiffs sought public injunctions compelling AT&T and Comcast, respectively, to change their disclosures regarding certain fees. Successful public injunction claims can force companies to undertake major and disruptive changes to their business, products or services. The 9th Circuit affirmed lower court rulings invalidating the arbitration agreements because they contained a public injunction waiver. After filing in the Ninth Circuit, NAM filed an amicus brief in support of review that argues that the Federal Arbitration Act preempts California law and that requiring arbitration of public injunction claims frustrates and undermines the purpose and benefits of individualized arbitration. On June 1, 2020, the Supreme Court declined to hear the case.


Related Documents:
NAM brief  (March 30, 2020)

 


Class Actions -- 2013



Comcast Corp. v. Behrend   (U.S. Supreme Court)

Evidence and analysis for the certification of a class

In another important precedent for defending class actions, on March 27, 2013 the Supreme Court ruled that trial courts must apply a rigorous analysis to the prerequisites for class certification, particularly the commonality of the harm, even if the analysis overlaps with the merits of the case. In this case, class certification was inappropriate because damages could not be shown on a class-wide basis. This decision raises the bar for plaintiff class certification and lessens the burden on companies that are forced to defend or settle class actions that should not be certified in the first place.

In this antitrust class action, subscribers to Comcast’s cable television services alleged that Comcast’s clustering of operations eliminated competition and led to supra-competitive prices in the Philadelphia market and sought certification of a 2 million member class. Rule 23(b)(3) of the Federal Rules of Civil Procedure requires that "questions of law or fact common to class members predominate over any questions affecting only individual members." The plaintiffs put forward multiple theories of harm, but the trial court accepted only one theory. However, the plaintiffs' damages expert testified based on a model that assumed the validity of all theories and did not isolate the harms arising from only the theory accepted by the trial court. The plaintiffs argued that examination of the expert’s methodology was looking at the merits and not appropriate at the class certification stage, but the court disagreed. This case builds on recent Supreme Court cases imposing restrictions on class action plaintiffs, particularly Wal-Mart Stores Inc. v. Dukes, by explaining that the “predominance” standard in damages class actions is even more demanding than in other types of class actions, even if the analysis involves an inquiry into the merits.