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Comcast Corp. v. Behrend - 569 U.S. 27, 133 S. Ct. 1426 (2013)

Rule:

Calculations of damages need not be exact, but at the class-certification stage (as at trial), any model supporting a plaintiff’s damages case must be consistent with its liability case, particularly with respect to alleged anticompetitive effect of the violation. For purposes of Fed. R. Civ. P. 23, courts must conduct a rigorous analysis to determine whether that is so.

Facts:

Plaintiffs Caroline Behrend and others were subscribers to cable-television services provided by defendants Comcast Corporation and its subsidiaries (collectively, "Comcast"). According to the subscribers, Comcast "clustered" its cable-television operations within a particular region by swapping its systems outside the region for competitor systems inside the region. The subscribers filed a putative class-action antitrust suit against Comcast in federal district claiming that they were harmed because Comcast's strategy lessened competition and led to supra competitive prices. They sought class certification under Fed. R. Civ. P. 23(b)(3). The district court accepted only one of the subscribers' four proposed theories of antitrust impact: that Comcast's actions lessened competition from "overbuilders," i.e., companies that built competing networks in areas where an incumbent cable company already operated. It then certified the class, finding that the damages from overbuilder deterrence could be calculated on a classwide basis. In affirming, the court of appeals refused to consider Comcast's argument that the model failed to attribute damages to overbuilder deterrence because doing so would require reaching the merits of the subscribers' claims at the class-certification stage. Comcast was granted a writ of certiorari.

Issue:

Was the subscribers' class properly certified?

Answer:

No.

Conclusion:

The Supreme Court of the United States reversed the appellate court's judgment. The Court held that the subscribers' class was improperly certified because the subscribers failed to show that common issues of damages predominated in the action as required by the law. The damages model did not isolate damages for Comcast's alleged swapping activities from other theories of antitrust impact which were rejected, the model thus could not establish that damages attributable to the accepted theory were susceptible of measurement across the entire class. Moreover, the Court ruled, it was permissible as well as necessary to make some inquiry into the merits of the damages calculation to determine whether common issues of damages predominated.

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