Judge denies Comcast’s motion to limit class action suit

Judge Stefan Underhill voided a class action waiver clause in Comcast’s contract, ruling that it would make litigation too costly for plaintiffs

A judge denied Comcast Corp.’s motion to limit an antitrust class action suit by forcing the plaintiff to bring his claims in arbitration.

Comcast customer Robert Fromer brought the suit in December 2009, after the company allegedly bundled digital voice service with a modem, forcing subscribers to pay a rental fee for the modem.

Comcast argued that a class action waiver clause in its contract prohibits the suit. But U.S. District Judge Stefan Underhill disagreed, noting that litigation costs would effectively prevent Fromer from collecting any damages. (He estimated that the plaintiff would spend $202 for every $1 he recovered.)

Courts have taken a variety of stances in cases involving similar arbitration clauses. Just this spring, the 2nd Circuit found that a mandatory arbitration clause in American Express customer agreements did not prevent merchant customers from filing class action suits. Writing for the majority, Judge Rosemary Pooler said that the decision “preserv[ed] plaintiffs’ ability to vindicate federal statutory rights, rather than eviscerating more than 120 years of antitrust law by closing the courthouse door to all but the most well-funded plaintiffs.”

In AT&T Mobility v. Concepcion, however, the Supreme Court ruled against a California couple who filed a fraud class action suit against AT&T, holding that the Federal Arbitration Act preempts state laws that prohibit contracts with mandatory arbitration clauses.

Read more at Thomson Reuters.

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