Two months after Washington state Attorney General Bob Ferguson filed a $100 million lawsuit accusing Comcast of 1.8 million violations of the Washington Consumer Protection Act, the company has fired back in a combative court filing.
In a motion filed in King County Superior Court in Seattle late Friday afternoon, Comcast called the attorney general’s lawsuit a “profound mischaracterization of Comcast’s actual business practices” and called on Judge Timothy Bradshaw to dismiss the case.
“The complaint consistently ignores the evidence the Attorney General gathered during a multi-year investigation, repeatedly misstates the true facts, and – most pertinent to this motion – fails to identify any unfair or deceptive conduct even on the facts as alleged,” Comcast argued.
The stakes for Comcast are high and extend well beyond Washington state. The two Comcast offerings at the heart of the lawsuit – its Customer Guarantee and the Service Protection Plan — are provided nationally. Comcast is the country’s largest cable company with more than 22 million television subscribers and nearly 24 million Internet subscribers.
A class-action lawsuit similar to the Washington state case was filed last month in federal court in Missouri, and attorneys general in other states also have been looking at the issues raised in Washington.
At the heart of the dispute is Comcast’s “Customer Guarantee,” which applies to all subscribers, and its Service Protection Plan, which is sold for $4.99 per month as an optional method for customers to cover service call charges related to XFINITY TV, Internet and phone services. From January 2011 to June 2016, more than 500,000 Washington consumers paid more than $73 million in subscription fees for the plan, according to the attorney general’s lawsuit.
The lawsuit alleges that Comcast marketed the Service Protection Plan to customers as a “comprehensive” service plan that promised to “cover all chargeable service calls for your XFINITY services without additional service fees.”
In fact, the lawsuit charges, the plan only covered “a narrow scope of repairs,” and many XFINITY customers ended up paying for repairs and technicians’ visits that they thought would have been covered by the plan.
“Deception formed the core of Comcast’s Service Protection sales pitch,” the lawsuit alleges.
Comcast flatly rejected the attorney general’s accusations in its motion to dismiss the case on Friday and argued the attorney general had not included facts that backed up its charges. Comcast said that more than 99 percent of service calls covered by the Customer Guarantee and the Service Protection Plan are resolved with no charge to the customer.
“The complaint offers little more than speculation about hypothetical billing errors that the Attorney General does not allege have actually occurred,” Comcast wrote in its filing. “And even if those errors did occur, they would at most amount to isolated breaches of contract, not unfair or deceptive practices warranting a $3.6 billion legal complaint by the state’s Attorney General.”
The $3.6 billion figure is a calculation based on the attorney general’s assertion of 1.8 million violations of the Washington Consumer Protection Act, multiplied by the potential fine per violation of $2,000, according to a Comcast spokesperson.
The attorney general’s lawsuit also alleges improprieties with Comcast’s credit screening policy. According to the suit, all new Comcast customers must either pay a deposit to begin receiving services, or undergo a credit screening process to determine if a deposit is necessary.
“From January 2013 through January 2016, Comcast obtained a deposit from over 6,000 Washington customers with credit scores that were sufficient to avoid Comcast’s deposit requirement,” according to the suit. “In addition, Comcast ran credit checks on at least 91 Washington consumers over a day after they paid a deposit to avoid the running of a credit check.”
In its response Friday, Comcast said the attorney general “does not allege that Comcast made any misrepresentations to those 6,000 customers” regarding their deposits and credit checks, “nor are there any allegations of actual economic harm suffered by individual customers from these various practices.”
Comcast has assembled a formidable legal team to square off against the Washington attorney general’s office.
The company’s lead attorney in Seattle is Mark Bartlett of Davis, Wright, Tremaine, who spent 25 years in the U.S. Attorney’s office in the Western District of Washington, including 9 years as the first assistant U.S. Attorney before joining Davis, Wright, Tremaine in 2011.
Additionally, Comcast has brought in six attorneys from Washington, D.C. firm Wilmer Hale to help litigate the case, including David Gringer, a former assistant attorney general at the U.S. Department of Justice, and Matthew Martens, who served as chief litigation counsel for the division of enforcement of the Securities and Exchange Commission.
Comcast has good reason to mount a vigorous defense of the Washington state case, given the possibility of similar issues getting raised in other lawsuits related to the Service Protection Plan, such as the class-action lawsuit pending in Missouri.
There is also the possibility of new lawsuits by other state attorneys general.
For instance, soon after the Washington state case was filed a spokesman for the attorney general of Pennsylvania, where Comcast is based, indicated that the office was reviewing the Washington state filing. The spokesman, Jeffrey A. Johnson, encouraged “any Pennsylvania consumer with a similar complaint to contact the Office of Attorney General’s Bureau of Consumer Protection.”
The Pennsylvania Attorney General at the time, Kathleen Kane, subsequently resigned after she was found guilty of nine criminal charges related to leaking information to the media about a 2009 grand jury probe as a way to get back at a political rival and former state prosecutor.
Despite the tumult, Kane’s successor, Pennsylvania Attorney General Bruce Beemer, continues to monitor the Washington state case. “Our review is ongoing,” Jeffrey Johnson said Friday. Johnson reiterated his request for Pennsylvania customers with concerns about the Service Protection Plan to contact the state Attorney General’s office.
Judge Bradshaw has scheduled a hearing on December 16 to hear oral arguments on Comcast’s motion to dismiss the case. If the case proceeds, it is scheduled to go to trial on July 31, 2017.
Here is the full text of Comcast’s filing.