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Case ID: 2609 | Technology | 08/11/2003
Cable television customers in the District of Columbia may recover as much as $10 million after an appellate court affirmed the judgment in a class action against District Cablevision Limited Partnership by cable subscribers who alleged that they were forced to pay a $5 late fee penalty between November 1991 and November 1994 in violation of the district's Consumer Protection Procedure Act. The money will not be distributed until all possible appeals have been exhausted.
The trial court ruled that District Cablevision owed $3.4 million in compensatory damages to subscribers who had paid late fees. The appeals court approved this holding, but further ruled that (1) prejudgment interest is to be added to this figure, and (2) the resulting sum should be trebled (tripled) under the Consumer Protection Procedure Act. During the 1991-1994 period, District Cablevision provided cable TV to over 100,000 subscribers under a franchise awarded by the district. Subscribers entered into standardized contracts under which they agreed to pay a monthly fee for the level of service selected. Subscribers also agreed to pay a late fee set by the company. In 1990, District Cablevision boosted its late fee from $2 to $5, or one-half the charge for basic cable service. In hearings before the city's Office of Cable Television, the company acknowledged that its fee was not cost-based but was rather designed simply to "motivate" subscribers to make timely payments. Court records reveal that the company later reported to that office that it was collecting revenues of $1.2 million annually from its new $5 late fee and that some 25 percent of its subscribers incurred the $5 charge each month. The action alleges that the late fee was exorbitant, and that the late fee was misleading because District Cablevision did not disclose that its actual purpose in charging the fee was to enhance its revenues, rather than to recover damages legitimately attributable to late payment. At trial, the jury found that the $5 fee did not bear a reasonable relationship to the company's actual costs. The trial court determined that District Cablevision should keep a portion of the late fees it collected--$2.43 out of every $5--as compensation for losses it actually incurred. The subscribers' damages were not the total amount of the late fees they paid, but only the unjustified excess portion of the fee--$2.57 per payment. While the class action sought to recover on behalf of subscribers who paid a late fee during the four-year period from November 1990 to November 1994, both courts agreed that the class should be limited to those who paid the late fee during the three-year period from November 1991 to November 1994. The action has been remanded to the trial court for further proceedings to calculate damages.
At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Technology Cases of Interest Several class actions have been filed against electric utility Gexa Corporation (Nasdaq:GEXA) and certain of its officers and directors by stockholders who purchased the company's common stock between August 14, 2003, and March 30, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities.
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The parties have reached a tentative settlement in a class action filed against Pacific Bell Internet Services and Compaq Computer Corporation on behalf of Californians who purchased a promotional package consisting of free Internet service and a Compaq computer between July 7, 2000, and January 31, 2001. Eligible claimants must send in a claim form postmarked no later than November 10, 2003. Until now, Microsoft has not gone to trial in a single state antitrust case. A class action has been filed against Microsoft Corporation on behalf of Minnesota residents who purchased Microsoft operating system and application software between 1994 and 2001, who allege that the software giant used its monopoly power to overcharge them for software licenses. |
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