Comcast fails to get hidden fee class-action suit thrown out of court

Comcast claims it can tack on Broadcast and Sports fees after order is submitted.

A class-action complaint against Comcast can move forward after a federal judge rejected a Comcast motion to dismiss it.

The lawsuit, filed in October 2016 in US District Court in Northern California, accuses Comcast of falsely advertising low prices and then using poorly disclosed fees to increase the amount paid by cable TV customers. Those fees are the “Broadcast TV Fee,” which had increased from $1.50 a month to $6.50 since 2014, and the “Regional Sports Fee” that rose from $1 to $4.50 since 2015.

These fees are not included in the advertised prices, so customers end up paying higher prices than the ones they are led to believe they will pay, the lawsuit said. When customers question Comcast reps about the fees, “Comcast staff and agents explicitly lie by stating that the Broadcast TV Fee and the Regional Sports Fee are government-related fees or taxes over which Comcast has no control,” the complaint said.

Comcast filed a motion to dismiss, claiming that its order submission process could not have created a contract and that customers agreed to pay the fees in the “Subscriber Agreement” and “Minimum Term Agreement.” But US District Court Judge Vince Chhabria disputed Comcast’s reasoning and wrote that the class-action plaintiffs have made plausible claims.

Chhabria wrote yesterday in his order:

“The motion to dismiss the breach of contract claim is denied. The plaintiffs have alleged the existence of a valid contract, which was created when [Comcast customers Dan] Adkins and [Christopher] Robertson submitted their order for Comcast services through Comcast’s website. It is plausible to infer from the complaint that, by clicking “Submit Your Order,” Adkins and Robertson agreed to pay Comcast’s advertised price, plus taxes and government-related fees, in exchange for the services Comcast offered them. It is also plausible to infer from the complaint that Comcast breached its agreements with the plaintiffs when it sent them bills charging them Broadcast TV and/or Regional Sports Fees (alleged to be neither taxes nor government-related fees) in excess of the agreed-upon price, and when it subsequently sought to raise the amount of the fees.”

Agreement did not mention specific fees

Chhabria disputed Comcast’s claim that customers agreed to the fees in the Subscriber Agreement. The agreement refers only to “permitted fees and cost recovery charges” and not specifically to the Broadcast TV and Sports fees, he wrote.

“As to the Minimum Term Agreement, the plaintiffs plausibly allege that they never saw this agreement at the time they submitted their order for services and have never consented to it,” the judge wrote. “Whether the plaintiffs had access to this agreement at the time they submitted their orders for services, or whether they subsequently consented to it, are disputed factual questions more appropriate for summary judgment.”

Comcast argued that the order submission doesn’t create a contract “because of the integration clause contained in Comcast’s Subscriber Agreement,” the judge wrote. This integration clause says that the Subscriber Agreement and other documents “constitute the entire agreement.”

“While the Subscriber Agreement discusses a subscriber’s agreement to pay the cost of services generally, it does not appear to contain any terms pertaining to any particular price the plaintiffs allege they agreed to pay for the services they ordered. It is therefore questionable whether the alleged order-submission contract and the Subscriber Agreement pertain to the same subject matter,” the judge wrote.

The plaintiffs also “adequately alleged that a reasonable consumer would be misled” about the price of service when going through Comcast’s ordering process, Chhabria wrote.

Chhabria gave Comcast a partial victory in yesterday’s order, dismissing the plaintiffs’ claim for breach of implied covenant of good faith and fair dealing. This was “dismissed because the theory of breach the plaintiffs allege is the same as the breach of contract theory. The claim is therefore superfluous.”

The judge’s decision allows plaintiffs to continue pursuing attorneys’ fees and punitive damages. But the judge warned plaintiffs that they likely will have to file a separate state court action in order to seek injunctive relief that would force Comcast to change its practices.

“The judge previously removed six out-of-state named plaintiffs from the suit, finding the court lacked jurisdiction to resolve their claims,” Courthouse News Service wrote.

Chhabria in April granted one of Comcast’s previous motions to dismiss the case, but he allowed the plaintiffs to file an amended complaint. The class representatives filed the amended complaint on May 16. Comcast then filed a motion to dismiss it, leading to yesterday’s ruling.

Comcast has repeatedly raised the Broadcast TV and Regional Sports fees even for customers who signed multi-year contracts for fixed monthly rates, the plaintiffs say. “By increasing these fees in the middle of the contract term, Comcast has found a way to secretly and repeatedly increase the monthly price it charges for its channel packages despite its promise to charge a flat rate for one or two years,” the original complaint said.