A divided U.S. Supreme Court has ruled for Comcast Corp. in a dispute over the alleged monopolization of the Philadelphia cable television market, overturning an appellate ruling that certified a class of about 2 million existing and former subscribers.
In the 5-4 decision, Justice Antonin Scalia, writing for the majority, said a divided U.S. Court of Appeals for the Third Circuit improperly granted class status because it failed to assess arguments from Comcast that cut against certification.
The ruling was seen as another significant blow against large class actions.
The plaintiffs had alleged Comcast violated antitrust law in an attempt to eliminate competition and keep cable service prices above competitive levels. The Third Circuit ruled that at the certification stage, plaintiffs need not "tie each theory of antitrust impact to an exact calculation of damages."
Class determination, Justice Scalia said, quoting from an earlier case, "generally involves considerations that are enmeshed in the factual and legal issues comprising the plaintiff's cause of action." He continued, "It is clear that, under the proper standard for evaluating certification, respondents' model falls far short of establishing that damages are capable of measurement on a classwide basis."
The case, he said, turned on "the straightforward application of class-certification principles." He dismissed the dissent's "extended discussion" of antitrust law.
Chief Justice John Roberts Jr. and Justices Anthony Kennedy, Samuel Alito Jr. and Clarence Thomas joined Justice Scalia in the 11-page majority ruling.
Justices Stephen Breyer and Ruth Bader Ginsburg wrote the dissent, joined by justices Elena Kagan and Sonia Sotomayor.
"Incautiously entering the fray at this interlocutory stage, the Court sets forth a profoundly mistaken view of antitrust law," Justices Breyer and Ginsburg wrote. "And in doing so, it relies on its own version of the facts, a version inconsistent with factual findings made by the District Court and affirmed by the Court of Appeals."
Gibson, Dunn & Crutcher partner Miguel Estrada, co-chair of the firm's appellate and constitutional law practice, issued a formal statement noting that the Supreme Court previously "has held that courts must rigorously scrutinize evidence pertaining to liability elements and defenses to ensure that class adjudication would be fair for all parties."
The decision "confirms that the same scrutiny must be applied to damages evidence at the class certification stage," he said. The high court ruling, he added, "will help ensure that only those cases truly suited for collective adjudication will be certified as class actions."
"In the past, a number of lower courts of appeal have been willing to certify first, ask questions later," Mayer Brown partner Archis Parasharami, co-chair of the firm's consumer litigation and class action practice, said. "The court's decision [makes] clear that some 'inquiry into the merits of the claim' may be required at the class certification stage."
Raul Zermeno, a Fisher & Phillips labor and employment associate in Los Angeles, said the ruling is likely to have a limiting effect on the number of class actions filed. "The decision in Comcast v. Behrend will significantly impact the future of employment-related class-action lawsuits nationwide," he said.
Saranac Hale Spencer of the Legal staff contributed to this article.