Loading
Telecommunications
7 min read
Areas of Expertise :
Antitrust, Statistics, Economics, Economic Damages, Class Action, Pricing, Telecommunications
Published Date:
Last Modified Date:
Jurisdiction:
Federal. Supreme Court
Comcast Corp. v. Behrend, 569 U.S. 27 (2013), was a federal antitrust class action brought by Comcast cable subscribers in the Philadelphia market. The plaintiffs alleged that Comcast's acquisition and exchange of cable systems reduced competition and caused subscribers to pay supracompetitive prices. The dispute reached the U.S. Supreme Court after lower courts certified the proposed class under Federal Rule of Civil Procedure 23(b)(3).
Plaintiffs' expert Dr. James T. McClave used multiple-regression analysis to compare actual cable prices with estimated prices under competitive conditions. His model calculated approximately $875.6 million in alleged damages. The Supreme Court reversed the Third Circuit's judgment affirming class certification because the analysis did not isolate losses tied to the single antitrust theory approved for class treatment. After remand, the plaintiffs revised their expert analysis, and the underlying class claims were resolved through a settlement valued at approximately $50 million.
Stanford Glaberson and other Comcast subscribers filed a proposed class action in the U.S. District Court for the Eastern District of Pennsylvania. They alleged that Comcast's acquisition and exchange of cable systems reduced competition in violation of Sections 1 and 2 of the Sherman Act. According to the plaintiffs, Comcast's regional concentration limited entry by competing cable providers and caused subscribers to pay higher prices. The litigation later focused on whether the alleged antitrust effects and damages could be established through evidence common to the proposed class.
The district court granted class certification after finding that the plaintiffs had satisfied the requirements of Rule 23. Their claims included allegations that Comcast's regional clustering strategy reduced competition and affected subscriber pricing throughout the Philadelphia market.
After the Third Circuit issued In re Hydrogen Peroxide Antitrust Litigation in 2008, the district court reconsidered whether common issues predominated under Rule 23(b)(3). The court then conducted a more detailed review of the plaintiffs' economic evidence and proposed method for calculating damages.
The district court held a four-day evidentiary hearing on antitrust impact and damages. Expert testimony addressed market structure, benchmark areas, cable pricing, competitive entry, and regression methodology.
Dr. McClave used multiple regression to estimate the difference between actual Comcast prices and prices he calculated would have existed under competitive conditions. Comcast's experts challenged the benchmark markets, selected variables, pricing inputs, and assumptions incorporated into the analysis.
Following its renewed Rule 23 analysis, the district court entered an amended order recertifying the Philadelphia class. It limited the plaintiffs' theory of antitrust impact to the claim that Comcast's clustering strategy deterred entry by competing cable providers, often referred to as overbuilders.
The court also accepted a common method for addressing damages. Dr. McClave estimated approximately $875.6 million in alleged overcharges, while Comcast challenged the model's specifications and assumptions.
The U.S. Court of Appeals for the Third Circuit affirmed the district court's certification order. It found that the plaintiffs had presented common evidence addressing antitrust impact and a method for calculating alleged damages across the class.
Comcast argued that deficiencies in the expert analyses prevented the plaintiffs from satisfying Rule 23(b)(3). The Third Circuit treated several of those objections as disputes over the merits of the evidence and left the certification order in place.
The U.S. Supreme Court reversed the Third Circuit's judgment affirming class certification in Comcast Corp. v. Behrend, 569 U.S. 27 (2013). The Court examined whether Dr. McClave's damages model measured losses attributable specifically to the overbuilder-deterrence theory accepted for class treatment.
His analysis had been developed around four antitrust theories originally advanced by the plaintiffs and did not separately calculate damages for the single theory that remained certified. The Court concluded that the class had been improperly certified under Rule 23(b)(3) because the model did not establish that damages attributable to the accepted theory could be measured on a classwide basis.
The dispute therefore centered on the relationship between the proposed damages methodology and the plaintiffs' remaining liability theory. Because the model reflected the combined effects of several theories, it did not provide a calculation limited to the conduct covered by the certified theory.
After remand, the plaintiffs submitted revised analyses from Dr. McClave and economist Dr. Michael Williams in support of another request for class certification. Their work addressed antitrust impact and damages under the claim that Comcast's clustering discouraged competing cable providers from entering the Philadelphia market.
Comcast continued to contest the plaintiffs' methodology through its own economic experts. The parties remained divided over whether the revised evidence met the requirements of Rule 23.
The plaintiffs sought another opportunity to certify a narrower class following remand. Comcast argued that the Supreme Court's mandate prevented further certification proceedings, but the district court rejected that position.
The court allowed the plaintiffs to proceed with a revised class definition and modified expert analysis. The case continued under the narrower overbuilder-deterrence theory.
While the renewed certification proceedings remained pending, the parties negotiated a class settlement. The district court granted preliminary approval and conditionally certified a settlement class.
The proposed agreement covered eligible current and former Comcast subscribers within the defined Philadelphia-area market. The litigation then moved through the class settlement approval process.
The U.S. District Court for the Eastern District of Pennsylvania granted final approval to a settlement valued at approximately $50 million. The agreement provided cash payments and service benefits to eligible current and former Comcast subscribers and covered a settlement class of at least 800,000 members.
The settlement resolved the underlying class claims after litigation that had proceeded through the district court, the Third Circuit, and the U.S. Supreme Court.
Court:
Supreme Court of the United States
Case Name:
Comcast Corp. v. Behrend
Comcast subscribers alleged that the company's cable system acquisitions reduced competition and caused higher prices in the Philadelphia market.
The plaintiffs' regression-based damages model estimated approximately $875.6 million in alleged overcharges.
The dispute centered on whether the statistical model measured damages attributable to the single antitrust theory approved for class treatment.
In 2013, the Supreme Court reversed class certification because the damages model did not isolate losses tied to the remaining overbuilder-deterrence theory.
Following revised expert analyses and further proceedings, the parties reached a settlement valued at approximately $50 million, approved in 2015.
Regression Analysis
Econometrics
Class Certification
Cable Television
Economic Analysis
Quantitative analysis
Damages Calculations
Broadband Communications
Comcast Corp. v. Behrend, 569 U.S. 27 (2013), was a federal antitrust class action brought by Comcast cable subscribers in the Philadelphia market. The plaintiffs alleged that Comcast's acquisition and exchange of cable systems reduced competition and caused subscribers to pay supracompetitive prices. The dispute reached the U.S. Supreme Court after lower courts certified the proposed class under Federal Rule of Civil Procedure 23(b)(3).
Plaintiffs' expert Dr. James T. McClave used multiple-regression analysis to compare actual cable prices with estimated prices under competitive conditions. His model calculated approximately $875.6 million in alleged damages. The Supreme Court reversed the Third Circuit's judgment affirming class certification because the analysis did not isolate losses tied to the single antitrust theory approved for class treatment. After remand, the plaintiffs revised their expert analysis, and the underlying class claims were resolved through a settlement valued at approximately $50 million.
Stanford Glaberson and other Comcast subscribers filed a proposed class action in the U.S. District Court for the Eastern District of Pennsylvania. They alleged that Comcast's acquisition and exchange of cable systems reduced competition in violation of Sections 1 and 2 of the Sherman Act. According to the plaintiffs, Comcast's regional concentration limited entry by competing cable providers and caused subscribers to pay higher prices. The litigation later focused on whether the alleged antitrust effects and damages could be established through evidence common to the proposed class.
The district court granted class certification after finding that the plaintiffs had satisfied the requirements of Rule 23. Their claims included allegations that Comcast's regional clustering strategy reduced competition and affected subscriber pricing throughout the Philadelphia market.
After the Third Circuit issued In re Hydrogen Peroxide Antitrust Litigation in 2008, the district court reconsidered whether common issues predominated under Rule 23(b)(3). The court then conducted a more detailed review of the plaintiffs' economic evidence and proposed method for calculating damages.
The district court held a four-day evidentiary hearing on antitrust impact and damages. Expert testimony addressed market structure, benchmark areas, cable pricing, competitive entry, and regression methodology.
Dr. McClave used multiple regression to estimate the difference between actual Comcast prices and prices he calculated would have existed under competitive conditions. Comcast's experts challenged the benchmark markets, selected variables, pricing inputs, and assumptions incorporated into the analysis.
Following its renewed Rule 23 analysis, the district court entered an amended order recertifying the Philadelphia class. It limited the plaintiffs' theory of antitrust impact to the claim that Comcast's clustering strategy deterred entry by competing cable providers, often referred to as overbuilders.
The court also accepted a common method for addressing damages. Dr. McClave estimated approximately $875.6 million in alleged overcharges, while Comcast challenged the model's specifications and assumptions.
The U.S. Court of Appeals for the Third Circuit affirmed the district court's certification order. It found that the plaintiffs had presented common evidence addressing antitrust impact and a method for calculating alleged damages across the class.
Comcast argued that deficiencies in the expert analyses prevented the plaintiffs from satisfying Rule 23(b)(3). The Third Circuit treated several of those objections as disputes over the merits of the evidence and left the certification order in place.
The U.S. Supreme Court reversed the Third Circuit's judgment affirming class certification in Comcast Corp. v. Behrend, 569 U.S. 27 (2013). The Court examined whether Dr. McClave's damages model measured losses attributable specifically to the overbuilder-deterrence theory accepted for class treatment.
His analysis had been developed around four antitrust theories originally advanced by the plaintiffs and did not separately calculate damages for the single theory that remained certified. The Court concluded that the class had been improperly certified under Rule 23(b)(3) because the model did not establish that damages attributable to the accepted theory could be measured on a classwide basis.
The dispute therefore centered on the relationship between the proposed damages methodology and the plaintiffs' remaining liability theory. Because the model reflected the combined effects of several theories, it did not provide a calculation limited to the conduct covered by the certified theory.
After remand, the plaintiffs submitted revised analyses from Dr. McClave and economist Dr. Michael Williams in support of another request for class certification. Their work addressed antitrust impact and damages under the claim that Comcast's clustering discouraged competing cable providers from entering the Philadelphia market.
Comcast continued to contest the plaintiffs' methodology through its own economic experts. The parties remained divided over whether the revised evidence met the requirements of Rule 23.
The plaintiffs sought another opportunity to certify a narrower class following remand. Comcast argued that the Supreme Court's mandate prevented further certification proceedings, but the district court rejected that position.
The court allowed the plaintiffs to proceed with a revised class definition and modified expert analysis. The case continued under the narrower overbuilder-deterrence theory.
While the renewed certification proceedings remained pending, the parties negotiated a class settlement. The district court granted preliminary approval and conditionally certified a settlement class.
The proposed agreement covered eligible current and former Comcast subscribers within the defined Philadelphia-area market. The litigation then moved through the class settlement approval process.
The U.S. District Court for the Eastern District of Pennsylvania granted final approval to a settlement valued at approximately $50 million. The agreement provided cash payments and service benefits to eligible current and former Comcast subscribers and covered a settlement class of at least 800,000 members.
The settlement resolved the underlying class claims after litigation that had proceeded through the district court, the Third Circuit, and the U.S. Supreme Court.
Statistics and Econometrics Expert Witness – Dr. James T. McClave (Plaintiffs)
Dr. McClave served as the plaintiffs' damages expert and held a Ph.D. in statistics. He used multiple-regression analysis to compare actual Comcast prices with estimated competitive prices and calculate alleged overcharges.
His methodology became a central issue in the class-certification dispute because the original model incorporated effects associated with four antitrust theories rather than separately calculating damages for the single overbuilder-deterrence theory that remained certified.
Antitrust Economics Expert Witness – Dr. Michael Williams (Plaintiffs)
Dr. Williams provided opinions on market definition, competitive conditions, and alleged antitrust impact. His analysis considered whether Comcast's regional clustering could deter competing cable providers and affect subscriber prices.
After the Supreme Court's decision, Dr. Williams and Dr. McClave submitted revised analyses addressing antitrust impact and damages under the narrower overbuilder-deterrence theory.
Antitrust Economics Expert Witness – Dr. Hal Singer (Plaintiffs)
Dr. Singer provided expert analysis during the class-certification proceedings concerning competitive conditions and the economic effects associated with Comcast's clustering strategy. His work formed part of the broader expert evidence addressing competition and alleged antitrust impact in the Philadelphia cable market.
Econometrics and Antitrust Economics Expert Witness – Dr. Tasneem Chipty (Comcast)
Dr. Chipty challenged parts of the plaintiffs' damages analysis. Her work addressed benchmark selection, demographic factors, discounted prices, and alternative regression specifications.
Those issues went directly to how the plaintiffs' model estimated competitive prices and whether its assumptions provided an appropriate basis for measuring alleged classwide overcharges.
Industrial Organization and Antitrust Economics Expert Witness – Dr. David J. Teece (Comcast)
Dr. Teece offered opinions on competition and the economic assumptions underlying the plaintiffs' claims. His analysis included challenges to the proposed benchmark markets and the plaintiffs' assertions about competitive entry.
His testimony formed part of Comcast's broader challenge to the economic evidence supporting the plaintiffs' theory of antitrust impact.
Rule 23(b)(3) Predominance and Common Evidence
Rule 23(b)(3) requires common questions of law or fact to predominate over issues affecting individual class members. In Comcast, the parties disputed whether the plaintiffs could establish antitrust impact and damages through methods that applied to the proposed class as a whole.
The certification dispute therefore involved more than whether the plaintiffs had developed an economic damages model. The courts also had to consider whether that model addressed the theory of antitrust impact that remained part of the certified case.
Connecting the Damages Model to the Certified Liability Theory
The central methodological issue was the relationship between the plaintiffs' damages calculation and the theory accepted for class treatment. Dr. McClave's original regression analysis incorporated effects associated with four antitrust theories, while the district court ultimately accepted only the overbuilder-deterrence theory.
A model may estimate an overall amount of alleged economic loss, but the class-certification question in Comcast concerned whether that calculation measured damages attributable to the particular theory that remained in the case. The Supreme Court concluded that the original model did not make that separation.
Multiple Regression and Competitive Price Benchmarks
Multiple regression can be used to estimate relationships between economic variables and prices and to construct a hypothetical competitive benchmark. In Comcast, Dr. McClave used regression analysis to estimate the difference between actual cable prices and prices expected under competitive conditions.
The parties disputed the variables, geographic comparisons, pricing data, benchmark markets, and assumptions used in that analysis. These disagreements affected both the estimated amount of alleged overcharges and the broader question of whether the methodology could support classwide treatment.
Competing Expert Methodologies at Class Certification
The proceedings included competing economic and statistical analyses concerning pricing, competition, antitrust impact, and damages. The four-day evidentiary hearing allowed the parties to challenge benchmark markets, regression specifications, competitive-entry assumptions, demographic factors, and pricing inputs.
The expert dispute illustrates how class-certification proceedings can require detailed consideration of whether a proposed methodology is capable of addressing the common issues presented by the certified claims.
Revised Analysis and Settlement After Supreme Court Review
The Supreme Court's 2013 decision returned the case to the district court for further proceedings. The plaintiffs then sought certification of a narrower class and submitted revised expert analyses focused on the overbuilder-deterrence theory.
While those renewed proceedings remained pending, the parties reached a settlement valued at approximately $50 million. The district court granted final approval on September 22, 2015.
Comcast Corp. v. Behrend centered on whether a regression-based damages methodology corresponded to the antitrust theory approved for class treatment. The Supreme Court concluded that the original model did not isolate damages attributable to the remaining overbuilder-deterrence theory and reversed the Third Circuit's judgment affirming certification under Rule 23(b)(3).
After remand, the plaintiffs pursued a narrower class and submitted revised economic and statistical analyses. The litigation ultimately concluded with a settlement valued at approximately $50 million, which received final approval from the U.S. District Court for the Eastern District of Pennsylvania on September 22, 2015.
Why did the Supreme Court reverse the class-certification judgment?
The Supreme Court reversed because the plaintiffs' damages model did not isolate losses attributable to the single antitrust theory accepted for class treatment. Dr. McClave's original analysis incorporated effects associated with four theories originally advanced by the plaintiffs.
What happened to the case after the Supreme Court's 2013 decision?
The plaintiffs sought certification of a narrower class after the case returned to the district court. They submitted revised analyses from Dr. James T. McClave and Dr. Michael Williams addressing antitrust impact and damages under the overbuilder-deterrence theory, while Comcast continued to challenge their methodology.
What aspects of the regression analysis did the parties dispute?
The parties disputed benchmark markets, selected variables, geographic comparisons, pricing data, demographic factors, discounted prices, regression specifications, and other assumptions used to estimate competitive prices and alleged overcharges.
What happened after the Supreme Court’s 2013 decision in Comcast v. Behrend?
After the Supreme Court reversed the class-certification ruling in 2013, the plaintiffs returned to the district court and pursued a narrower proposed class using revised economic and damages analyses. The parties later reached a settlement valued at approximately $50 million, which the U.S. District Court for the Eastern District of Pennsylvania finally approved on September 22, 2015.
Statistics and Econometrics Expert Witness – Dr. James T. McClave (Plaintiffs)
Dr. McClave served as the plaintiffs' damages expert and held a Ph.D. in statistics. He used multiple-regression analysis to compare actual Comcast prices with estimated competitive prices and calculate alleged overcharges.
His methodology became a central issue in the class-certification dispute because the original model incorporated effects associated with four antitrust theories rather than separately calculating damages for the single overbuilder-deterrence theory that remained certified.
Antitrust Economics Expert Witness – Dr. Michael Williams (Plaintiffs)
Dr. Williams provided opinions on market definition, competitive conditions, and alleged antitrust impact. His analysis considered whether Comcast's regional clustering could deter competing cable providers and affect subscriber prices.
After the Supreme Court's decision, Dr. Williams and Dr. McClave submitted revised analyses addressing antitrust impact and damages under the narrower overbuilder-deterrence theory.
Antitrust Economics Expert Witness – Dr. Hal Singer (Plaintiffs)
Dr. Singer provided expert analysis during the class-certification proceedings concerning competitive conditions and the economic effects associated with Comcast's clustering strategy. His work formed part of the broader expert evidence addressing competition and alleged antitrust impact in the Philadelphia cable market.
Econometrics and Antitrust Economics Expert Witness – Dr. Tasneem Chipty (Comcast)
Dr. Chipty challenged parts of the plaintiffs' damages analysis. Her work addressed benchmark selection, demographic factors, discounted prices, and alternative regression specifications.
Those issues went directly to how the plaintiffs' model estimated competitive prices and whether its assumptions provided an appropriate basis for measuring alleged classwide overcharges.
Industrial Organization and Antitrust Economics Expert Witness – Dr. David J. Teece (Comcast)
Dr. Teece offered opinions on competition and the economic assumptions underlying the plaintiffs' claims. His analysis included challenges to the proposed benchmark markets and the plaintiffs' assertions about competitive entry.
His testimony formed part of Comcast's broader challenge to the economic evidence supporting the plaintiffs' theory of antitrust impact.
Rule 23(b)(3) Predominance and Common Evidence
Rule 23(b)(3) requires common questions of law or fact to predominate over issues affecting individual class members. In Comcast, the parties disputed whether the plaintiffs could establish antitrust impact and damages through methods that applied to the proposed class as a whole.
The certification dispute therefore involved more than whether the plaintiffs had developed an economic damages model. The courts also had to consider whether that model addressed the theory of antitrust impact that remained part of the certified case.
Connecting the Damages Model to the Certified Liability Theory
The central methodological issue was the relationship between the plaintiffs' damages calculation and the theory accepted for class treatment. Dr. McClave's original regression analysis incorporated effects associated with four antitrust theories, while the district court ultimately accepted only the overbuilder-deterrence theory.
A model may estimate an overall amount of alleged economic loss, but the class-certification question in Comcast concerned whether that calculation measured damages attributable to the particular theory that remained in the case. The Supreme Court concluded that the original model did not make that separation.
Multiple Regression and Competitive Price Benchmarks
Multiple regression can be used to estimate relationships between economic variables and prices and to construct a hypothetical competitive benchmark. In Comcast, Dr. McClave used regression analysis to estimate the difference between actual cable prices and prices expected under competitive conditions.
The parties disputed the variables, geographic comparisons, pricing data, benchmark markets, and assumptions used in that analysis. These disagreements affected both the estimated amount of alleged overcharges and the broader question of whether the methodology could support classwide treatment.
Competing Expert Methodologies at Class Certification
The proceedings included competing economic and statistical analyses concerning pricing, competition, antitrust impact, and damages. The four-day evidentiary hearing allowed the parties to challenge benchmark markets, regression specifications, competitive-entry assumptions, demographic factors, and pricing inputs.
The expert dispute illustrates how class-certification proceedings can require detailed consideration of whether a proposed methodology is capable of addressing the common issues presented by the certified claims.
Revised Analysis and Settlement After Supreme Court Review
The Supreme Court's 2013 decision returned the case to the district court for further proceedings. The plaintiffs then sought certification of a narrower class and submitted revised expert analyses focused on the overbuilder-deterrence theory.
While those renewed proceedings remained pending, the parties reached a settlement valued at approximately $50 million. The district court granted final approval on September 22, 2015.
Comcast Corp. v. Behrend centered on whether a regression-based damages methodology corresponded to the antitrust theory approved for class treatment. The Supreme Court concluded that the original model did not isolate damages attributable to the remaining overbuilder-deterrence theory and reversed the Third Circuit's judgment affirming certification under Rule 23(b)(3).
After remand, the plaintiffs pursued a narrower class and submitted revised economic and statistical analyses. The litigation ultimately concluded with a settlement valued at approximately $50 million, which received final approval from the U.S. District Court for the Eastern District of Pennsylvania on September 22, 2015.
Why did the Supreme Court reverse the class-certification judgment?
The Supreme Court reversed because the plaintiffs' damages model did not isolate losses attributable to the single antitrust theory accepted for class treatment. Dr. McClave's original analysis incorporated effects associated with four theories originally advanced by the plaintiffs.
What happened to the case after the Supreme Court's 2013 decision?
The plaintiffs sought certification of a narrower class after the case returned to the district court. They submitted revised analyses from Dr. James T. McClave and Dr. Michael Williams addressing antitrust impact and damages under the overbuilder-deterrence theory, while Comcast continued to challenge their methodology.
What aspects of the regression analysis did the parties dispute?
The parties disputed benchmark markets, selected variables, geographic comparisons, pricing data, demographic factors, discounted prices, regression specifications, and other assumptions used to estimate competitive prices and alleged overcharges.
What happened after the Supreme Court’s 2013 decision in Comcast v. Behrend?
After the Supreme Court reversed the class-certification ruling in 2013, the plaintiffs returned to the district court and pursued a narrower proposed class using revised economic and damages analyses. The parties later reached a settlement valued at approximately $50 million, which the U.S. District Court for the Eastern District of Pennsylvania finally approved on September 22, 2015.
Regression Analysis
Econometrics
Class Certification
Cable Television
Economic Analysis
Quantitative analysis
Damages Calculations
Broadband Communications
Trade Secret, +3
Telecommunications
Patent, +4
Telecommunications