The Supreme Court on Wednesday turned away a class action lawsuit against cable provider Comcast Corp., in a decision that could make it harder to file those types of lawsuits in federal court.
The high court on Wednesday overturned a lower court decision to certify as a class customers who say the company's monopoly in parts of the Philadelphia area allowed it to raise prices unfairly.
Justice Antonin Scalia said in a 5-4 decision the customers need to be able to show that they can tie a single theory of how they were harmed to a specific calculation of damages for class certification.
The Comcast subscribers had a model that would have shown damages, but it showed $875 million of damages done under four different theories.
Only one of their theories was accepted by the lower courts, so there is no showing of how much in damages was attributable to that theory, Scalia said.
"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," said Scalia, who was joined in his opinion by Chief Justice John Roberts, and Justices Anthony Kennedy, Clarence Thomas and Samuel Alito.
Justices Stephen Breyer and Ruth Bader Ginsburg wrote the dissent jointly for themselves, Sonia Sotomayor and Elena Kagan. In an unusual move, Breyer and Ginsburg read parts aloud in the courtroom.
First, they said that the court's majority rewrote the question being argued, meaning the issue was "infected by our misguided reformulation." They also said that Comcast had argued in lower courts that the other theories offered up by the Philadelphia area subscribers had no effect on prices, meaning that the damages from the model "must have stemmed exclusively" from the only theory accepted by the lower court.
Breyer and Ginsburg argued that the court's decision would not change class action lawsuit rules.
"The court's ruling is good for this day and case only," Breyer and Ginsburg said in the opinion.
But others say this will make it more difficult to file class actions.
The court's decision "reinforces that courts can't rubber stamp proposed class actions without first taking a hard look at the plaintiffs' claims," said Kate Todd, a lawyer at the National Chamber Litigation Center. "The reality is that frivolous class actions impose unjustified litigation and settlement costs on businesses that are passed on to consumers. Today's decision is a victory in the effort to curb class action abuse."
Raul Zermeno, a lawyer with Fisher & Phillips, a labor and employment law firm that represents management, agreed. "The decision in Comcast v. Behrend will significantly impact the future of employment-related class-action lawsuits nationwide," Zermeno said. "The court held that a plaintiff must introduce evidentiary proof to show that the case is susceptible to awarding damages on a class-wide basis, before class-action status is granted."
The decision is the latest in several Supreme Court rulings on class action lawsuits, which increase pressure on businesses to settle suits because of the cost of defending them and the potential for very large judgments.
In 2011, the Supreme Court raised the bar for some class-action suits when it sided with Wal-Mart against up to 1.6 million of its female employees who complained of sex discrimination. In the Wal-Mart case, the court said there were too many women in too many jobs at the nation's largest private employer to wrap into one lawsuit.
The case is Comcast v. Behrend, 11-864.