Date: 06-12-2007

Case Style: Thomas Belton, et al. v. Comcast Cable Holdings, LLC

Case Number: A112591

Judge: Stein

Court: California Court of Appeal, First Appellate District on appeal from the Superior Court of Sonoma County

Plaintiff's Attorney:

Norbert C. Babin and Michael J. Langston of Babin & Seeger, LLP, Santa Rosa, California

Defendant's Attorney: Richard R. Patch, Virginia A. Crisp, and Susan K. Jamison of Coblentz, Patch, Duffy & Bass LLP, San Francisco, California

Description:

Thomas Belton and Larry Hall (hereafter plaintiffs) are subscribers to cable service provided by Comcast Cable Holdings, LLC (Comcast). They appeal from a judgment entered in Comcast's favor after the court granted Comcast's motion for summary adjudication with respect to plaintiffs' causes of action for unfair competition (Bus. & Prof. Code, § 17200) and violation of the Unruh Act (Civ. Code, § 51 (the Unruh Act)). The court also dismissed, pursuant to Civil Code section 1381, subdivision (c)(3), the remaining cause of action alleging violation of the Consumer Legal Remedies Act, Civil Code section 1750 et seq. (CLRA).

We shall affirm the judgment.

Facts

The amended complaint alleged that plaintiffs are residents of Sonoma County and subscribers to Comcast cable services. Larry Hall is legally blind. All of the causes of action were premised upon the common allegation that Comcast offered FM or music services to Sonoma County residents only as a part of a basic cable tier package that included television cable service. Plaintiffs alleged that this practice forced them to purchase television cable services that they did not want because they had no other practicable means of obtaining access to the FM or music services. With respect to Hall, the complaint also alleged Comcast's practice was discriminatory because Hall was blind and could not use the television cable service. Plaintiffs further alleged that Comcast expressly or impliedly falsely represented to the public that it was "technologically or legally necessary" to subscribe to the basic cable tier "in order to receive the FM/music service." Finally, they alleged that Comcast's advertisements did not "conspicuously disclose the actual price of the FM and/or music services."

After deposing plaintiffs, Comcast moved for summary adjudication of the first cause of action for unfair competition (Bus. & Prof. Code, § 17200), and the third cause of action for a violation of the Unruh Act. Comcast also filed a motion, pursuant to Civil Code section 1781, subdivision (c)(3), to dismiss the remaining cause of action alleging violation of the CLRA.

As relevant to the issues on appeal, the motions were based upon the following undisputed facts:

When Mr. Belton subscribed, he was informed that a subscription to the basic cable tier, which included television service, was required to receive the FM music service that was also included in that tier. Belton later asked a Comcast customer service representative whether he could get FM service only, and was told he could not. He did not ask why he had to purchase the basic cable tier because he had asked the same question of several of Comcast's predecessors, and he was always told that it was "technical." Mr. Belton did not want television cable service. He subscribed to it only in order to get the audio. Although Mr. Belton protested the unavailability of FM or music services a la carte,1 he did ask Comcast to provide the basic cable tier of service, and he has never been billed for a service he did not request.

When Mr. Hall subscribed to Comcast services, he was informed and understood that he had to subscribe to basic cable programming in order to get the audio service that he wanted.2 Approximately a year after Mr. Hall subscribed to Comcast services, he twice inquired about the availability of the FM audio service a la carte. He informed the representative that he was blind, and that was why he was making the request. He initially testified that he was told Comcast did not have the technology to do that. Yet, later in the deposition he stated he was informed that it was not "possible" to get audio only, but could not recall whether the representative said it was technically not possible. Hall testified Comcast treated him the same as their sighted subscribers. It was also undisputed that Comcast applies its policy of requiring its customers to subscribe to the basic cable tier of service in order to receive FM music service to all residential subscribers. Hall subscribed to a premium cable package, and placed an order to add a digital video and audio package. He, like Belton, did not want the television service included in the package. Both plaintiffs admitted that they "understood basic cable is required to receive music service."

Both Hall and Belton could obtain FM music service by listening to remote stations live over the Internet, and they both had computers and Internet service.3 It was undisputed that DirecTV, a satellite service, also offered digital quality music. Both plaintiffs could also receive a number of FM stations on the radio at home.4

With respect to their allegation of misrepresentations or false advertising, both plaintiffs admitted they had not seen any false written statements from Comcast suggesting that music service was offered a la carte. It was also undisputed that the rate cards attached to the complaint did not contain any representations that legal or technical reasons prevented Comcast from offering FM radio or music service separately from the rest of the basic cable package. Plaintiffs further admitted that the cards stated either that basic cable is required to receive any other services, or that basic service was the minimum level of cable service that could be purchased. They also admitted that all of the rate cards stated the correct price for basic cable service, which included FM service.5

With respect to plaintiffs' assertion that representatives of Comcast had orally represented to them there were technical reasons why they could not get FM or music service a la carte, Comcast offered the declarations of James Bordessa, its construction manager, and Shirley I. Gulbransen, its regional vice president. Bordessa declared that Comcast's basic television service was the service automatically provided when cable service is installed. The signal for all other services must be either "trapped," i.e., blocked by a physical device installed at the curb, or electronically "scrambled," for those customers who do not order and pay for them. To receive a trapped service the physical trap is removed by the installer. To receive a scrambled service the customer must obtain and hook up a converter box that " ‘unscrambles' the signal." In order to provide FM music service without the basic television service, it would be necessary either to install a trap that blocks the basic television signal but allows the music signal through, or to scramble the basic signal. Comcast had not designed or manufactured a trap for, and did not scramble, the basic signal so that it could offer "stand-alone" FM music service, for several reasons. The same expense of installation, customer service, and other costs would still exist whether the customer received the basic cable package or FM music service alone. Therefore provision of the music service alone would not be profitable unless priced at a level close to that charged for the basic cable service package. At the same time, because Comcast also faced extensive competition from other providers of music service, such as local radio stations, Internet-based radio services, and satellite entertainment providers, there was a significant risk that the demand for such "standalone" music service would not be high enough to allow it to recoup its "roll-out" costs and the administrative and infrastructure expenses it would incur. Also, scrambling or trapping posed a significant risk of theft of service because a knowledgeable customer can remove the trap, or obtain boxes that will unscramble the signal.

Plaintiffs offered an expert declaration disputing the assertion that reconfiguring Comcast's system to trap out basic cable television would be costly, because another company already manufactured a trap that could trap out the basic television cable, but let the FM signal through. The expert also challenged the business reasons Comcast's witnesses had stated for Comcast's decision not to implement the technical changes that would allow it to offer FM or music service a la carte. He declared that because a trap that could accomplish this was already being manufactured it would not be costly for Comcast to deploy such a trap. He further declared that the risk of theft of service would not be any greater than under Comcast's current configuration of its tiers of service because "a savvy customer can learn how to remove any trap."

After ruling on the parties' evidentiary objections, the court, in a detailed order, found that there were no material triable issues of fact, and stated its reasons for concluding that Comcast was entitled to judgment as a matter of law on the causes of action for violation of Business and Professions Code section 17200 and for a violation of the Unruh Act. In a separate order, the court determined that the cause of action for violation of the CLRA was without merit. It entered judgment in Comcast's favor. Plaintiffs filed a timely notice of appeal.

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" ‘Business and Professions Code section 17200 . . . establishes three varieties of unfair competition - acts or practices which are unlawful, or unfair, or fraudulent. "In other words, a practice is prohibited as ‘unfair' or ‘deceptive' even if not ‘unlawful' and vice versa." ' " (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 (Cel-Tech).) "It governs ‘anti-competitive business practices' as well as injuries to consumers, and has as a major purpose ‘the preservation of fair business competition.' [Citations.] By proscribing ‘any unlawful' business practice, ‘section 17200 "borrows" violations of other laws and treats them as unlawful practices' that the unfair competition law makes independently actionable." (Ibid.)

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Outcome: The judgment is affirmed. Respondent is entitled to costs on appeal

Plaintiff's Experts: Unknown

Defendant's Experts: Unknown

Comments: None