Partial Cert. Granted in MLB/NHL Broadcast Monopoly Class Action

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The subscribers’ Class in the antitrust class action lawsuit accusing the Major League Baseball, National Hockey League, Comcast Corp. and DirecTV LLC of creating a broadcast monopoly was granted partial certification by a New York federal judge last week.

U.S. District Court Judge Shira A. Scheindlin granted certification to the Class of television subscribers only to the extent that they are able to seek an order requiring the sports leagues and broadcasters to change the way games are sold. Judge Scheindlin refused to grant certification to the subscribers’ Class for the purposes of collecting damages from the defendants stating that the evidence offered by the subscribers to establish damages was inadmissible.

The case stems from allegations the Major League Baseball, National Hockey League, Comcast Corp. and Direct TV LLC conspired to create a monopoly to restrict the broadcast of sporting events in a way that harms the competition. Judge Scheindlin retained most of the claims in the case in the winter of 2012, when the judge rejected the sporting league and broadcasters motion to dismiss the broadcast monopoly class action lawsuit.

The Class of subscribers did not fare as well in the most recent court action. According to court documents, the Class of subscribers seek an injunction as well as damages reflecting the amount they overpaid for their subscriptions to MLB and/or NHL broadcasting packages. Although Judge Scheindlin rejected the certification of the Class with regard to the damages claims, the judge allowed the Class to be certified in order to pursue an injunction against the sporting leagues and broadcasters.

In short, the Class of subscribers want the sporting leagues and broadcasters to stop entering into agreements that block teams and regional sports networks from selling their content directly to customers outside of their home territories. “Defendants believe that some class members, even if they are currently suffering an antitrust injury, would prefer to be injured than for the injury to be redressed — because the injury carries collateral benefits,” Judge Scheindlin wrote in the order. “Defendants’ claim fails three times over,” she summarized.

MLB, NHL, Comcast and DirectTV argued that the Class of subscribers should not be certified because some subscribers prefer the current packages offering all MLB or NHL games and these subscribers would not be able to access or would have to pay more for those packages if the plaintiffs win the case.

Judge Scheindlin rejected this argument, explaining that Class certification is determined by a common injury shared by Class Members, not by an agreement by Class Members about the best way to address the injury. “[T]here is no question that here, a common injury exists in the form of diminished consumer choice,” the judge concluded in her order.

In turn, however, Judge Schneidlin rejected the model put forth by the plaintiffs’ expert to calculate damages for the Class. “The problem for plaintiffs is that, at bottom, all of the examples defendants and [their economist] point to … expose the same underlying problem, which is quite fundamental and fatal: [plaintiffs’ expert’s] estimates do not rely on sufficient data about consumer tastes and preferences,” concluded in her order, ruling that since the plaintiffs’ model could not be used at trial, the Class of subscribers could not be certified for damage claims.

The plaintiffs are represented by Edward A. Diver, Howard I. Langer and Peter E. Leckman of Langer Grogan & Diver PC, Michael Morris Buchman and John A. Ioannou of Motley Rice LLC, Kevin M. Costello and Gary E. Klein of Klein Kavanagh Costello LLP, Alex Schmidt and Mary Jane Fait of Wolf Haldenstein Adler Freeman & Herz LLP, Robert LaRocca of Kohn Swift & Graf PC, and J. Douglas Richards and Jeffrey Dubner of Cohen Milstein Sellers & Toll PLLC.

The MLB/NHL Broadcast Monopoly Class Action Lawsuit is Laumann, et al. v. National Hockey League, et al., Case No. 12-cv-01817, in the U.S. District Court for the Southern District of New York.

UPDATE: On June 15, 2015, a New York federal judge preliminarily approved the NHL broadcast monopoly class action settlement.

UPDATE 2: On Jan. 19, 2016, Major League Baseball agrees to settle the antitrust class action lawsuit over geographic broadcast networks, only minutes before they were set to start a nine-day trial in New York.

UPDATE 3: On Feb. 16, 2016, the Major League Baseball (MLB) broadcast monopoly class action lawsuit settlement is now open, check out all the details here or at www.MLBBroadcastingSettlement.com!

UPDATE 4: On May 1, 2017, the plaintiffs in this class action filed a motion to enforce the Major League Baseball broadcast monopoly settlement. Baseball fans say that MLB raised its prices, but has not increased the value of the service. The plaintiffs acknowledged that agreements to provide service later are in place, but argued that was not enough under the terms of the settlement agreement.