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From Antitrust Law Daily, December 3, 2014

Subscribers unable to resurrect illegal tying claims against cable provider

By Linda O’Brien, J.D., LL.M.

A group of cable subscribers were unable to resurrect their claims that Insight Communications Company, L.P. illegally tied its interactive premium cable (IPC) services to cable box rentals. The federal district court in Louisville denied the subscribers’ motion to alter or amend the court order granting Insight’s motion for summary judgment (Jarrett v. Insight Communications Company, L.P., December 1, 2014, McKinley, J.).

IPC services provide two-way communication between cable subscribers and Insight, which allows for pay-per-view services, an interactive programming guide, and on-demand options. A group of consumers filed suit against the cable services company, asserting that its policy of requiring cable subscribers to rent cable boxes from Insight in order to receive Insight’s IPC services was an illegal tying scheme.

In granting Insight’s motion for summary judgment on the consumers’ third amended complaint in July 2014, the court found that the group of consumers failed to produce sufficient evidence to create a genuine dispute about whether Insight violated Section 1 of the Sherman Act. The plaintiffs subsequently moved to alter or amend the court order granting summary judgment.

Motions to alter or amend judgments under Federal Rule of Civil Procedure 59(e) may be allowed if: (1) an intervening change of controlling law; (2) evidence not previously available has become available; and (3) it is necessary to correct a clear error of law or prevent manifest injustice, the court explained.

The plaintiffs argued that the court failed to resolve a particular issue of material fact that was before the court. Specifically, the plaintiffs contended that Insight’s policy change as to whether customers could provide their own set-top box for use with Insight’s system, after its acquisition by Time Warner Cable in February 2012, should be considered as it created a genuine issue of material fact.

In denying the plaintiffs’ motion to reconsider the merit of the case, the court noted that the plaintiffs did not assert any claims against Time Warner, which was not a defendant in the action. When the plaintiffs filed their third amended complaint in November 2012, they did not name Time Warner as a defendant or allege that they were subject to set-top policies by Time Warner that violated Section 1 of the Sherman Act. The plaintiffs’ claims relate solely to Insight’s requirements and representations and any claims against Time Warner should have been filed against Time Warner and not Insight.

Additionally, the plaintiffs did not demonstrate that, in June 2013 when Time Warner informed Insight customers that their services would transition to Time Warner, Insight customers were required to lease set-top boxes to obtain two-way interactive services. The Time Warner notice expressly referenced future services that were not yet available to customers. Moreover, the products identified on Time Warner’s webpage were Time Warner products and were not a part of the tied product alleged in the plaintiffs’ third amended complaint—Insight’s interactive premium cable, the court concluded.

The case is No. 3:09-CV-00093-JHM.

Attorneys: Adrienne W. Kim (Gray & White) for Laurie Jarrett. Craig A. Goldberg (Time Warner Cable, Inc.) and Laurence John Zielke (The Zielke Law Firm) for Insight Communications Company, L.P.

Companies: Insight Communications Company, L.P.

MainStory: TopStory Antitrust KentuckyNews

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