6/25. The Supreme Court granted certiorari in Comcast v. Behrend, a class action against Comcast alleging violations of federal antitrust law in connection with transactions that enabled Comcast to increase their share of the cable market in the Philadelphia area a decade ago.

Supreme Court review will be limited to the issue of class certification. In question is whether or not the District Court may look into the merits of the claims during the class certification process.

The Supreme Court stated in its June 25 orders list [20 pages in PDF] that "The petition for a writ of certiorari is granted limited to the following question: ``Whether a district court may certify a class action without resolving whether the plaintiff class has introduced admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.´´"

The law firm of Susman Godfrey filed a complaint in the U.S. District Court (EDPenn) alleging violation of Sections 1 and 2 of the Sherman Act in connection with provision of multichannel video programming distribution (MVPD) services in the Philadelphia designated market area (DMA).

The plaintiffs are nominally several individuals, who seek class action status. Susman Godfrey seeks to collect damages based on alleged injury to all current and former Comcast customers in the Philadelphia area since 1999 -- over 2 Million people. The Eastern District of Pennsylvania includes Philadelphia. However, it is also a forum of choice for plaintiffs' antitrust lawyers.

The complaint alleges violation of Section 1, which is codified at 15 U.S.C. § 1, for "imposing horizontal territory, market and customer allocations by conspiring with and entering into and implementing unlawful swap agreements, arrangements or devices", and violation of Section 2, 15 U.S.C. § 2, on theories of monopolization and attempted monopolization.

The plaintiffs argue that Comcast engaged in an anticompetitive "clustering scheme". They argue that Comcast companies concentrated their operations in regional geographic areas by acquiring cable systems in those regions where they already had a significant presence, by purchasing in region cable holdings, and selling out of region cable holdings.

The Court of Appeals wrote that the plaintiffs allege that "As a result of its clustering, Comcast allegedly harmed the class by eliminating competition, raising entry barriers to potential competition, maintaining increased prices for cable services at supra-competitive levels, and depriving subscribers of the lower prices that would result from effective competition. ... In other words, Comcast subscribers allegedly pay too much for their non-basic video programming cable service."

That is, the plaintiffs argue that a common business practice in the cable industry is a violation of antitrust law. Moreover, the Federal Communications Commission (FCC), which has statutory regulatory authority, has approved license transfers, in de facto antitrust merger reviews, in which companies are pursuing clustering strategies.

The plaintiffs filed a motion, pursuant to Rule 23, Federal Rules of Civil Procedure (FRCP), for class certification.

23(b) pertains to "Types of Class Actions". 23(b)(3) provides that "A class action may be maintained if Rule 23(a) is satisfied and if ... (3) the court finds that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. The matters pertinent to these findings include: (A) the class members’ interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action."

The Court of Appeals wrote that the plaintiffs proposed this class: "All cable television customers who subscribe or subscribed at any time since December 1, 1999, to the present to video programming services (other than solely to basic cable services) from Comcast, or any of its subsidiaries or affiliates in Comcast's Philadelphia cluster".

The District Court issued an order in which it certified the class. Applying the 3rd Circuit's 2008 opinion [55 pages in PDF] in In re Hydrogen Peroxide Antitrust Litigation, 552 F.3d 305, the District Court held that the plaintiffs could establish antitrust impact through evidence common to a class comprising Comcast cable television customers in the Philadelphia DMA.

Comcast appealed to the U.S. Court of Appeals (3rdCir). It issued its divided opinion [98 pages in PDF] on August 23, 2011, affirming the judgment of the District Court.

Judge Ruggero Aldisert, who was born in 1919, wrote the opinion of the Court, in which Judge Fisher joined. Judge Jordan wrote a lengthy opinion (which begins at page 58), concurring in the conclusion, but offering a different reasoning.

The majority held that the District Court "did not exceed its permissible discretion in determining that Plaintiffs established by a preponderance of evidence that they would be able to prove through common evidence (1) class-wide antitrust impact (higher cost on non-basic cable programming), and (2) a common methodology to quantify damages on a class-wide basis. Accordingly, we will affirm."

Hydrogen Peroxide was decided in December of 2008. The District Court ruled in 2010. Subsequently, on June 20, 2011, the Supreme Court issued its opinion [42 pages in PDF] in Wal-Mart Stores, Inc. v. Dukes, a class certification case involving FRCP Rule 23(b)(2). The 3rd Circuit ruled two months later.

Both the Aldisert and Jordan opinions reference Wal-Mart, but only in footnotes. Judge Aldisert concluded that the "Supreme Court confirmed our interpretation" in Wal-Mart. Moreover, "The factual and legal underpinnings of Wal-Mart -- which involved a massive discrimination class action and different sections of Rule 23 -- are clearly distinct from those of this case. Wal-Mart therefore neither guides nor governs the dispute before us."

Comcast petitioned the Supreme Court for writ of certiorari, which the Supreme Court has just granted. Comcast relies heavily on Wal-Mart. It argued in its petition for writ of certiorari that the 3rd Circuit relied on pre-Wal-Mart opinions that are inconsistent with Wal-Mart.

Comcast also argued that there is a circuit split, with the 9th Circuit in 2011 adhering to Wal-Mart in Ellis v. Costco Wholesale Corp., 657 F.3d 970, and the 8th Circuit in 2011 in Bennett v. Nucor Corp., 656 F.3d 802, similarly requiring the courts to examine the merits of the plaintiffs' claim.

The District Court did not reach final judgment in this case. There has been no trial or no summary judgment. The District Court only certified the class. This, however, is a key decision in class action litigation.

Comcast is represented before the Supreme Court by Miquel Estrada of the Washington DC office of the law firm of Gibson Dunn & Crutcher. The plaintiffs are represented by Barry Barnett of the Dallas office of the law firm of Susman Godfrey.

Former President Bush nominated Estrada for a seat on the U.S. Court of Appeals (DCCir). However, Senate Democrats successfully filibustered the nomination, preventing a vote in the Senate.

6/21. Gene Kimmelman, the Department of Justice's (DOJ) Antitrust Division's Chief Counsel for Competition Policy and Intergovernmental Relations, gave a speech in Washington DC to the American Antitrust Institute (AAI) titled "Antitrust Enforcement and Media Industries: Competition and Beyond".

He addressed several DOJ proceedings: an obscure newspaper matter in West Virginia, the Comcast NBC Universal transaction, AT&T's attempt to acquire T-Mobile USA, and the DOJ's pending action against Apple.

The US judicial interpretation of the purpose of antitrust law is to promote consumer welfare by promoting competition and the consequential beneficial effects on prices, product quality and innovation.

However, Kimmelman also made the statement that "enforcement of the antitrust laws also can promote the dissemination of ideas, diversity of opinion, and creative expression".

Kimmelman first addressed a DOJ action regarding newspapers. He praised the DOJ's action against the Charleston, West Virginia, newspapers Daily Mail and Gazette. He stated that "We halted a plan that likely would have left the citizens of Charleston, West Virginia, with a single local daily newspaper that would have cost more and provided lower quality content."

See also, story titled "DOJ Antitrust Action Takes Segmented View of Media" in TLJ Daily E-Mail Alert No. 1,586, May 23, 2007, "More News" in TLJ Daily E-Mail Alert No. 1,784, June 23, 2008, and story titled "DOJ Requires Separate Operation of Two Print Daily Newspapers in Charleston WV" in TLJ Daily E-Mail Alert No. 2,037, January 20, 2010.

Kimmelman also addressed the Comcast NBCU transaction and the distribution of video programming. Both the DOJ and the Federal Communications Commission (FCC) allowed that transaction to proceed.

On January 18, 2011, the DOJ approved approved the transaction, with conditions. The DOJ and several states filed, and simultaneously settled, a complaint in the District Court. See also, proposed final judgment.

He said that "We obtained remedies designed to prevent Comcast from using its control of NBC Universal's programming and other assets to hamstring its rivals and thereby increase price and lower quality in the distribution of video programming."

Kimmelman also addressed the DOJ's suit to block AT&T's acquisition of T-Mobile USA. He asserted that "Developments since AT&T abandoned the acquisition seemingly confirm the Division's view that T-Mobile represents an important competitive factor in the wireless space."

On August 31, the DOJ filed a complaint [25 pages in PDF] in the U.S. District Court (DC) against AT&T, T-Mobile USA and Deutsche Telekom that sough an injunction against AT&T's acquisition of T-Mobile USA on the grounds that it would have substantially lessened competition in violation of Section 7 of the Clayton Act, which is codified at 15 U.S.C. § 18. See, story titled "DOJ Files Complaint to Block AT&T Acquisition of T-Mobile USA" in TLJ Daily E-Mail Alert No. 2,298, August 31, 2011. The companies later subsequently abandoned the transaction. See, story titled "AT&T and T-Mobile Abandon Merger Effort" in TLJ Daily E-Mail Alert No. 2,320, December 20, 2011.

Finally, Kimmelman touched on the Apple case. "Our current case against Apple and certain book publishers seeks to end a conspiracy that has inflated e-book prices." He added that "eliminating anticompetitive conduct in the e-book sector possibly could make it cheaper and easier for readers to get books and create new ways for authors to reach readers."

See, story titled "DOJ Sues Apple and Book Publishers Alleging E-Book Price Collusion" and related stories in TLJ Daily E-Mail Alert No. 2,368, April 11, 2012.

6/20. Rep. Ben Quayle (R-AZ) and Rep. Trey Gowdy (R-SC) introduced HRes 695, which resolves that the Attorney General should appoint outside counsel to investigate recent releases of national security information, including regarding the stuxnet cyber attack on Iran's nuclear weapons development program.

This resolution resolves that it is the sense of the House of Representatives that the Attorney General should appoint an "outside special counsel" for investigation and prosecution related to the "unauthorized disclosures of classified and highly sensitive information related to various United States military and intelligence plans, programs, and operations reported in recent publications".

This resolution does not identify any classified or sensitive information. However, the cyber warfare leaks at issue resulted in the publication in the NYT of a story by David Sanger on June 1, 2012, titled "Obama Order Sped Up Wave of Cyberattacks Against Iran". See also, story titled "Members of Congress Condemn Leaks of Information About US Cyber Attacks on Iran" in TLJ Daily E-Mail Alert No. 2,391, June 6, 2012.

On June 8 the Attorney General, Eric Holder, appointed two U.S. Attorneys responsible to him to investigate. Rep. Quayle and Rep. Gowdy issued a release that states that "their objectivity is questionable".

See also, story titled "Holder Assigns Two to Investigate Cyber Warfare Leaks" and related stories in TLJ Daily E-Mail Alert No. 2,394, June 9, 2012.

Rep. Quayle stated in this release that "The leaking of highly-sensitive information by the Obama Administration has put our nation’s security in peril, and cast doubt on our ability to execute important missions. These leaks must stop, and those responsible for them must be brought to justice. An investigation of this magnitude can only be carried out by an independent investigator."

The House will meet at 2:00 PM in pro forma session only. See, Rep. Cantor's schedule.

The Senate will meet at 2:00 PM. It will resume consideration of the motion to proceed to S 1940 [LOC | WW], the "Flood Insurance Reform And Modernization Act".

Deadline to submit to the Federal Communications Commission (FCC) replies to oppositions to the petitions for reconsideration of the FCC's latest Low Power Radio Service order. The FCC adopted and released this Fourth Report and Order and Third Order on Reconsideration on March 19, 2012. It is FCC 12-29 in MB Docket No. 99-25. See, notice in the Federal Register, Vol. 77, No. 105, Thursday, May 31, 2012, at Page 32075. See also, petition of the Educational Media Foundation, petition of Hope Christian Church of Marlton and others, petition of Corner Media, and petition of Kyle Magrill. And see, story titled "FCC Releases Two Items Regarding Local Community Radio Act" in TLJ Daily E-Mail Alert No. 2,351, March 20, 2012.

Deadline for Facebook to respond to the interrogatories propounded by Rep. Ed Markey (D-MA) and Rep. Joe Barton (R-TX) in their June 4, 2012, letter [3 pages in PDF] regarding Facebook's plans to allow children under 13 to use Facebook. See, story titled "Rep. Markey and Rep. Barton Write Facebook Regarding Plans to Target Children" in TLJ Daily E-Mail Alert No. 2,391, June 6, 2012.

Deadline to submit oppositions and comments to the Federal Communications Commission (FCC) regarding the American Cable Association's (ACA) Petition for Reconsideration of the FCC's Fifth Report and Order [130 pages in PDF] regarding the Emergency Alert System (EAS). This order continues the FCC's process of revising its EAS rules to specify the manner in which EAS participants must be able to receive alert messages formatted in the Common Alerting Protocol (CAP). The FCC adopted this item on January 9, 2012, and released the text on January 12, 2012. It is FCC 12-7 in EB Docket No. 04-296. The ACA asked in its April 23, 2012, petition for a streamlined waiver process for small cable systems serving fewer than 501 subscribers that lack physical connectivity to broadband Internet access. See also, notice in the Federal Register, Vol. 77, No. 111, Friday, June 8, 2012, at Pages 33995-33997. See also, the ACA's April 23 release and the FCC's May 25, 2012, Public Notice (DA 12-834).

15th anniversary of the Supreme Court's opinion in Reno v. ACLU, 521 U.S. 844 (1997).

The House will meet at 2:00 PM for legislative business. It will consider numerous non-technology related items under suspension of the rules. Votes will be postponed until 6:30 PM. See, Rep. Cantor's schedule.

8:00 AM - 5:00 PM. The Department of Commerce's (DOC) National Institute of Standards and Technology (NIST) will host an event titled "National Cybersecurity Center of Excellence Workshop". The deadline to register is 5:00 PM on June 19. See, notice in the Federal Register, Vol. 77, No. 87, Friday, May 4, 2012, at Page 26511-26512. Location: Universities at Shady Grove, 9630 Gudelsky Drive, Rockville, MD.

11:00 AM - 12:00 NOON. The National Science Board's (NSB) Committee on Science and Engineering Indicators will hold a meeting on site and by teleconference. See, notice in the Federal Register, Vol. 77, No. 114, Wednesday, June 13, 2012, at Page 35430. Location: National Science Foundation, 4201 Wilson Blvd., Arlington, VA.

12:00 NOON - 1:30 PM. The American Bar Association (ABA) will host a teleconferenced panel discussion titled "An Overview of the Process: A Discussion on the Procedural Aspects of Merger Review". The topics to be discussed include voluntary requests, second requests, timing agreements, privilege logs, remedies, privacy issues, and civil investigative demands. The speakers will be Vittorio Cottafavi (Shearman & Sterling), Jeremy Morrison (FTC), Richard Mosier (DOJ Antitrust Division), and Kathleen Sanderson (Baker & McKenzie). No CLE credits. Free. See, notice.

2:00 - 4:15 PM. There will be an event titled "Cyber Security: The Perfect Storm". The lead off speakers will be Sen. Tom Carper (D-DE) and Sen. Scott Brown (R-MA). There will then be a panel discussion titled "Federal Cyber Security -- Mobility and Cloud Technologies". The speakers will include John Streufert (DHS/NPPD). See, event website. Location: Room 212, Capital Visitor Center.

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. See, Rep. Cantor's schedule.

10:00 AM. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology (SCT) will hold a hearing titled "The Future of Video". See, notice. Location: Room 2123, Rayburn Building.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Intellectual Property, Competition and the Internet will hold a hearing titled "International IP Enforcement: Protecting Patents, Trade Secrets and Market Access". See, notice. Location: Room 2141, Rayburn Building.

10:00 AM. The House Science Committee's (HSC) Subcommittee on Research and Science Education will hold a hearing titled "The Role of Research Universities in Securing America’s Future Prosperity: Challenges and Expectations". See, notice. Location: Room 2318, Rayburn Building.

10:00 AM. The House Intelligence Committee (HIC) will hold a closed hearing titled "Ongoing Intelligence Activities". See, notice. Location: Room HVC-304, Capitol Visitor Center.

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing on the nominations of Frank Geraci (USDC/WDNY), Fernando Olguin (USDC/CDCal), Malachy Mannion (USDC/MDPenn), and Matthew Brann (USDC/MDPenn). See, notice. The SJC will webcast this hearing. Location: Room 226, Dirksen Building.

1:00 - 3:15 PM. The DC Bar Association will host a presentation titled "Cloud Computing Transactions Workshop: A Systems Approach to Avoiding Thunderstorms". The speakers will be Ward Classen (Computer Sciences Corporation) and Philip Porter (Hogan Lovells). The price to attend ranges from $89 to $129. Reporters are barred from attending most DC Bar events. CLE credits. See, notice. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a teleconferenced presentation titled "Government, Technology and the Expectation of Privacy in the Aftermath of U.S. v. Jones". Prices vary. See, ABA notice. See also, January 23, 2012, opinion [34 pages in PDF] of the U.S. Supreme Court holding that GPS tracking of a vehicle constitutes a search within the meaning of the 4th Amendment.

The House will meet at 10:00 AM for morning hour, and at 12:00 NOON for legislative business. See, Rep. Cantor's schedule.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Crime, Terrorism, and Homeland Security will hold a hearing titled "Identity Theft and Income Tax Preparation Fraud". See, notice. Location: Room 2141, Rayburn Building.

10:00 AM. The House Homeland Security Committee's (HHSC) Subcommittee on Counterterrorism and Intelligence will hold a hearing titled "Economic Espionage: A Foreign Intelligence Threat to American Jobs and Homeland Security". See, notice. Location: Room 311, Cannon Building.

10:00 AM. The Senate Commerce Committee (SCC) will hold a hearing titled "A Need for Privacy Protections: Is Industry Self Regulation Adequate?". The witnesses will be Bob Liodice (Association of National Advertisers), Peter Swire (Ohio State University), Berin Szoka (Tech Freedom), and Alex Fowler (Mozilla). Location: Room 253, Russell Building.

10:00 AM. The Senate Judiciary Committee (SJC) will hold an executive business meeting. The agenda includes consideration of the nominations of Terrence Berg (USDC/EDMich), Jesus Bernal (USDC/CDCal), and Lorna Schofield (USDC/SDNY). See, notice. The SJC will webcast this meeting. Location: Room 226, Dirksen Building.

6:00 - 8:15 PM. The Federal Communications Bar Association's (FCBA) International Telecommunications Committee will host an event titled "The 2012 WCIT: Crafting International Telecommunication Regulations for the Twenty-First Century". There will be a government panel. The speakers will be Richard Beaird (Senior Deputy United States Coordinator for International Communications and Information Policy, Department of State), Vernita Harris (Deputy Associate Administrator, Office of International Affairs, NTIA), and Al Lewis (Special Counsel, FCC). There will then be a private sector panel. The speakers will be David Gross (Wiley Rein), Richard Whitt (Google), Walter McCormick (USTelecom), Gigi Sohn (Public Knowledge), and Sally Wentworth (Internet Society). Registrations and cancellations due by 12:00 NOON on June 27. CLE credits. See, notice. Location: Bingham McCutchen, 2020 K St., NW.

8:00 AM. Day one of a two day event hosted by the National Governors Association (NGA) titled "National Forum on Preparing Public Safety Broadband". See, notice. Location: National Conference Center, 18980 Upper Belmont Place, Leesburg, VA.

The House will meet at 9:00 AM for legislative business. See, Rep. Cantor's schedule.

Day two of a two day event hosted by the National Governors Association (NGA) titled "National Forum on Preparing Public Safety Broadband". See, notice. Location: National Conference Center, 18980 Upper Belmont Place, Leesburg, VA.

1:00 - 2:30 PM. The American Bar Association (ABA) will host a webcast and teleconferenced presentation titled "The America Invents Act: An In-Depth Look at Procedures that Become Effective in September 2012". The speakers will be Orion Armon (Cooley), Robert Bahr (acting Associate Commission for Patent Examination Policy, USPTO), Elizabeth Brannen (Barnes & Noble), Michael Tierney (Lead Administrative Patent Judge, Patent Trial and Appeal Board), and David Postolski (Cantor Fitzgerald). CLE credits. The price ranges from $95 to $195. See, notice.

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