Community Antenna Service, Inc. v. Charter Communications VI, LLC

712 S.E.2d 504, 227 W. Va. 595, 2011 W. Va. LEXIS 55
CourtWest Virginia Supreme Court
DecidedJune 23, 2011
Docket35703
StatusPublished
Cited by24 cases

This text of 712 S.E.2d 504 (Community Antenna Service, Inc. v. Charter Communications VI, LLC) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Community Antenna Service, Inc. v. Charter Communications VI, LLC, 712 S.E.2d 504, 227 W. Va. 595, 2011 W. Va. LEXIS 55 (W. Va. 2011).

Opinion

KETCHUM, Justice:

This case has a simple central issue: did one television cable company offer discounted rates to some (but not all) of its customers in violation of a state law that prohibits “unduly discriminatory rates”?

The parties — two cable companies — have litigated this issue for over a decade. After a trial, a jury concluded that one cable company’s reduced i-ates for only a few of its customers violated state law, and were designed to unfairly drive the smaller and economically weaker cable company out of business. The jury awarded the smaller cable company compensatory and punitive damages.

In this appeal from the Circuit Court of Wood County — -the third time these parties have appeared before this Court — we find there is a private cause of action under the West Virginia Cable Television Systems Act against cable operators that illegally offer “unduly discriminatory” cable rates. We further find that the jury’s award of compensatory and punitive damages was supported by the evidence.

I.

Facts and Background

Appellant Charter Communications VI, PLLC (“Charter”), acquired an existing television cable company in 1999, and began providing cable services to citizens in the more “urban” incorporated areas of Wood County, largely centered in Parkersburg, West Virginia. Appellee Community Antenna Service, Inc. (“Community Antenna”), is a much smaller company that provided cable services in rural, unincorporated areas of Wood County. In 1999, Community Antenna received a franchise agreement with the City of Parkersburg, and began extending its service into areas already served by the Charter system.

This appeal has its genesis in a lawsuit filed in the circuit court in October 2000. Appellant Charter brought a lawsuit alleging that Community Antenna had unlawfully entered into agreements with certain apartment building owners, whereby Community Antenna would be the exclusive cable provider for tenants in those buildings. Upon a certified question from the circuit court, we concluded that state law does not allow the kinds of exclusive contracts that Community Antenna made with apartment owners. 1

At issue in this appeal is a counterclaim filed by Community Antenna in the underlying lawsuit. Community Antenna alleged that Charter was using an unlawful pricing *601 scheme called “CAS buy-back plans” to unfairly drive Community Antenna out of business. A buy-back pricing plan was only offered by Charter to (1) Community Antenna customers, and (2) Charter customers who indicated an intent to leave Charter to subscribe to Community Antenna. The buyback pricing plan was only offered in service areas where Charter and Community Antenna competed. No other Charter customer was eligible.

Under the buy-back pricing plans, Charter essentially offered some of its customers rates that would “meet or beat” Community Antenna’s rates, and which were lower than Charter’s rates for its customers who were not offered the buy-back pricing. If a Charter customer qualified for and received services under the plan — and about 800 did — the customer got some variation of cash rebates, credits, and/or reduced rates while simultaneously receiving added cable services. Charter customers usually received the benefit of the plan for a twelve-month period; however, some were allowed to extend their service under the plan, at reduced rates, indefinitely. The large number of Charter customers who were not in the service areas where Charter competed with Community Antenna were not offered the buy-back pricing plan.

During the pendency of the circuit court action, Community Antenna filed a complaint with the Public Service Commission. Community Antenna asked the Commission to find that Charter’s buy-back pricing plans were “unduly discriminatory” in violation of the Cable Television Systems Act, W.Va. Code, 24D-l-13(b) [1999]. In 2002, an administrative law judge determined that Charter’s buy-back plans “unduly discriminate in favor of certain customers [since] [o]nly customers who have [Community Antenna] service available and either leave Charter or threaten to leave Charter for [Community Antenna] are offered the plans.” However, the Public Service Commission rejected the administrative law judge’s recommended decision, and in 2004 decided that the buy-back pricing plans were “reasonable and not discriminatory.”

Community Antenna appealed the Commission’s decision to this Court. In 2006, in a careful and extended discussion by Justice Benjamin of federal and state laws pertaining to the regulation of the cable television industry, we concluded that the Public Service Commission had erred. 2 We determined that Charter had a statutory responsibility to offer a uniform rate structure to its customers in the Wood County geographic area. By offering special pricing plans to only a few of its customers, Charter could be considered to have offered “unduly discriminatory” rates. The case was remanded to the Commission for further proceedings.

While the Public Service Commission’s decision was under review by this Court, Charter sold its West Virginia cable systems to another provider. On remand, the Commission found that the case was moot because Charter no longer provided cable service in West Virginia, and because neither Charter nor its successor offered a pricing plan similar to those at issue after 2002. The Commission did, however, order that Charter and its successors “not offer the pricing plans which are at issue in this proceeding.”

After this Court’s decision in 2006, the parties began vigorously litigating Community Antenna’s counterclaim against Charter which, again, alleged that Charter had, in violation of state and federal law, engaged in rate discrimination which was calculated to harm Community Antenna’s business. After nine days of trial, on February 28, 2008, a jury concluded that Charter’s buy-back plans constituted “unduly discriminatory rates” in violation of state law, and concluded that Charter had tortiously interfered with Community Antenna’s business relationships with its customers. The jury awarded Community Antenna damages of $1,150,954 for discrimination; $1,446,350 for tortious interference; and $1,500,000 in punitive damages.

Charter filed various post-trial motions challenging the jury’s verdict. In an order dated January 5, 2010, the circuit court de *602 nied Charter’s motions and upheld the jury’s verdict.

Charter now appeals the circuit court’s January 5, 2010 order.

II.

Standard of Review

Charter challenges the circuit court’s interpretation of the Cable Television Systems Act. “Interpreting a statute or an administrative rule or regulation presents a purely legal question subject to de novo review.” 3

Charter also challenges the jury’s award of punitive damages, and again, our review is de novo 4 The standard of review of an order denying a motion for judgment as a matter of law after trial, pursuant to Rule 50(b), is also

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Bluebook (online)
712 S.E.2d 504, 227 W. Va. 595, 2011 W. Va. LEXIS 55, Counsel Stack Legal Research, https://law.counselstack.com/opinion/community-antenna-service-inc-v-charter-communications-vi-llc-wva-2011.