A judge will likely decide next week whether to throw out Washington state Attorney General Bob Ferguson’s $100 million lawsuit accusing Comcast of 1.8 million violations of the Washington Consumer Protection Act.
Both sides presented their arguments Friday on Comcast’s request in October to dismiss the case. King County Superior Court Judge Timothy Bradshaw said he would likely make a decision before Christmas. If the case goes forward, a trial is scheduled for July 31, 2017.
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 Comcast 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 plan to customers as a “comprehensive” option that promised to cover service calls without additional fees.
But the lawsuit alleges the plan only covered a narrow scope of repairs and many customers ended up paying for repairs and technicians’ visits that they thought would have been covered by the plan. The complaint alleges Comcast charged thousands of customers for service calls related to its own equipment or network problems.
“If you say one thing but you provide another, a reasonable person is going to believe the thing that you actually told them is what you are providing,” Washington Assistant Attorney General Daniel Davies said.
Comcast argued that after two years of investigation, the attorney general hasn’t presented a single instance of the company charging for a repair that should have been covered. Instead, Comcast said, the investigation has only pointed to situations where customers could be overcharged by mistake.
Matthew Martens of Washington D.C. law firm WilmerHale argued on behalf of Comcast that the company clearly spells out what its service plan covers and what it doesn’t. He pointed to the plan’s the terms and conditions, which Martens argued explicitly name two issues not covered by the plan: opening up walls and repairing TVs.
Comcast said more than 99 percent of service calls covered by the plan are resolved with no charge to the customer.
“To provide 99 percent coverage and disclose your exceptions on the website is deception, that is the (attorney general’s) theory, and that theory makes no sense,” Martens said.
But Davies countered that the main crux of the matter isn’t charges against the customer. The issue, he said, is the simple statement that the plan is comprehensive when it actually isn’t. One example touted by the attorney general since the lawsuit was filed in August is that Comcast says it will cover all “inside wiring,” but doesn’t include wiring inside the walls of the home.
“The real harm comes every single time someone was induced to purchase the plan based on a deceptive representation of what it covered,” Davies said. “The consumer may not end up needing comprehensive coverage, but they purchased it based on the understanding that it had comprehensive coverage.”
Martens, who served as chief litigation counsel for the division of enforcement of the Securities and Exchange Commission, is a key part of a formidable legal team Comcast assembled to square off against the Washington attorney general’s office. That team includes six attorneys from WilmerHale, as well Comcast’s lead attorney in Seattle, Mark Bartlett of Davis Wright Tremaine. He spent 25 years in the U.S. Attorney’s office in the Western District of Washington, including nine years as the first assistant U.S. Attorney before joining Davis, Wright, Tremaine in 2011.
Comcast has good reason to mount a vigorous defense in this case. Comcast has put its potential damages at $3.6 billion calculated by multiplying the alleged 1.8 million violations of the Washington Consumer Protection Act by the potential fine per violation of $2,000, a Comcast spokesperson previously told GeekWire. The two Comcast offerings at the heart of the lawsuit – the Customer Guarantee and the service 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.
Additionally, the suit opens open the possibility of similar issues getting raised in other lawsuits related to the service plan, such as a class-action lawsuit pending in Missouri. There is also the possibility of new lawsuits by other state attorneys general.