Epstein on the Status of Class Action Antitrust Litigation after Comcast v. Behrend
he recent Supreme Court decision in Comcast v. Behrend is not likely to attract much popular press. The case is worlds apart from the Court's highly publicized class-action decision in Wal-Mart v. Dukes, which addressed burning issues of workplace parity between men and women. In contrast, Behrend reads like a quintessential technical case reserved for class action gurus and antitrust professionals. But on closer look, it may well turn out to be much more.
The Factual Background In Behrend, the plaintiffs allege that the cable company Comcast is violating the Sherman Act through its "clustering" program. Under that program, the company swaps its facilities in areas where it has a low concentration of customers to other cable TV companies, in exchange for those companies' facilities in regions where Comcast has a higher customer concentration. One such area was the Philadelphia Metropolitan Region, where, as Justice Scalia reports in his five-member majority opinion:
In 2001, [Comcast] obtained Adelphia Communications' cable systems in the Philadelphia DMA, along with its 464,000 subscribers; in exchange, petitioners sold to Adelphia their systems in Palm Beach, Florida, and Los Angeles, California. As a result of nine clustering transactions, petitioners' share of subscribers in the region allegedly increased from 23.9 percent in 1998 to 69.5 percent in 2007.
These numbers suggest that Comcast had acquired a dominant position in the geographically discrete Philadelphia market, which under orthodox theory should allow it to raise prices above the competitive level, holding service quality constant. On the other side of the scale is the prospect that Comcast generated various kinds of operating efficiencies that could offset, either in whole or in part, the social welfare loss from higher market concentration.