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From Antitrust Law Daily, November 12, 2015

Judge sets aside $6.31M jury verdict in Cox cable box tying suit

By Linda O’Brien, J.D., LL.M.

The federal district court in Oklahoma City has set aside a $6.31 million jury verdict against Cox Communications in a class action suit alleging that Cox violated the Sherman Act by requiring customers to rent a Cox set-top box in order to obtain full access to the company’s premium cable services. In granting the cable provider’s motion for judgment as a matter of law, the court found that the plaintiff failed to offer evidence from which a reasonable jury could return a verdict in his favor (In re Cox Enterprises, Inc. Set-Top Cable Television Box Antitrust Litigation, November 12, 2015, Cauthron, R.).

Richard Healy, along with a number of Cox customers, filed class action suits against Cox, alleging that the company illegally required customers to rent a Cox set-top box to gain full access to Cox’s premium cable services, in violation of Section 1 of the Sherman Act. Set-top boxes offer customers and cable providers the ability to communicate, allowing consumers to utilize certain features, such as interactive programming guide, pay-per view, and video on demand. The class actions were consolidated and transferred to the district court.

On October 29, an Oklahoma City jury returned a verdict against Cox. Cox then filed its motion for judgment as a matter of law, or in the alternative for a new trial, claiming: (1) Healy failed to present evidence sufficient to support a verdict on at least three separate elements of his claim, including coercion, substantial foreclosure of commerce, and market power; (2) evidence at trial made clear that Healy’s claim was not subject to the per se standard and had to be analyzed under the rule of reason; and (3) Healy failed to present sufficient evidence of antitrust injury, causation, or damages.

In granting Cox’s motion for judgment as a matter of law, the court found that there was no evidence that Cox foreclosed competition. According to the court, the plaintiff failed to offer evidence from which a jury could determine that other manufacturers wished to sell set-top boxes at retail or that Cox prevented other manufacturers from selling set-top boxes at retail. Because set-top boxes could not be purchased elsewhere through no fault of Cox, there was no exploitation of the market or stifling of competition.

The plaintiff’s argument that a third-party set-top box manufacturer refused to enter the market because of Cox was rejected as speculative. While acknowledging that Cox required subscribers to rent a set-top box in order to obtain premium cable, the court noted there was no evidence from which a reasonable jury could determine that the arrangement led to the foreclosure of competition.

The plaintiff was also required to prove that he was injured as a result of the alleged tying arrangement. In the court’s view, the plaintiff failed to offer evidence demonstrating that Cox customers were harmed due to the alleged tie.

The case is No. 12-ML-2048-C.

Attorneys: A. Daniel Woska (Woska Law Firm PLLC), Allan Kanner (Kanner & Whiteley LLC), Garrett W. Wotkyns (Schneider Wallace Cottrell Konecky), Joe R. Whatley , Jr. (Whatley Drake & Kallas LLC), Michael J. Blaschke (Michael J Blaschke PC), Rachel Lawrence Mor (A. Daniel Woska & Associates PC) and S. Randall Sullivan (Randall Sullivan PC) for Richard Healy. Bruce D. Sokler (Mintz Levin Cohn Ferris Glovsky & Popeo), D. Kent Meyers (Crowe & Dunlevy), Ewell E. Eagan , Jr.( Gordon Arata Mccollam Duplantis & Eagan) and Matthew D. Golish (Gonzalez Saggio & Harlan Crystal) for Cox Communications Inc.

Companies: Cox Enterprises, Inc.

MainStory: TopStory Antitrust OklahomaNews

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