Lawsuit Alleges Time Warner Charged Improper “Modem Lease Fee”
A judge recently upheld class allegations against Time Warner Cable over monthly fees charged for leasing the modem. According to an order issued by U.S. District Judge Allyne R. Ross, Time Warner’s motion to dismiss the case entirely was denied. Judge Ross ruled that the plaintiffs’ claims are not precluded because their monetary relief claims were resolved through private arbitration. Time Warner Cable has a history of poor customer service, and has been known as the most hated company in America due its low customer satisfaction ratings.
Parker Waichman LLP is a national law firm with decades of experience representing consumers in class action lawsuits over allegedly unfair and deceitful business practices. The firm continues to offer free legal consultations to individuals with questions about filing a Time Warner Cable lawsuit.
Time Warner’s residential services subscriber agreement contains a private arbitration clause. As such, Judge Ross sent individual plaintiff claims to private arbitration in 2013. The cable provider won all claims, except for breach of contract claims brought by two plaintiffs. These individuals were awarded a modest amount of compensation. The plaintiffs amended their complaint, suing for equitable relief, and brought their allegations back to court.
Time Warner motioned for the case to be dismissed. The company claimed that the plaintiffs are barred from relitigating because their claims have been submitted to arbitration. Additionally, the cable provider argues that the plaintiffs’ allegations are not sufficient to support claims for equitable remedies.
Judge Ross rejected all of these arguments, finding no legal basis that says a plaintiff cannot relitigate in court due to an arbitration decision. Plaintiffs are barred from relitigating an issue that has been resolved in court; this doctrine is known as res judicata. This concept, however, does not extend to arbitration, the judge said.
In arguing its case, Time Warner cited collateral estoppel, a doctrine similar to res judicata. However, Judge Ross determined that the company did not show “with clarity and certainty” that plaintiffs’ allegations are the same as the ones resolved in private arbitration.
The lawsuit was filed on behalf of nine plaintiffs in February 2013. According to the class action complaint, Time Warner began charging a “modem lease fee” of $3.95 per month. Customers said they only received a “vague and misleading” postcard informing them of the new charge. The suit seeks to represent all Time Warner customers who were charged a modem lease fee. The plaintiffs also propose subclasses based on different state consumer protection laws.
Time Warner Named “Most Hated” Company in America
For years, Time Warner has been associated with its poor customer service scores. According to a Consumer Reports survey, the company has not only been the most-loathed among cable companies, but of all companies in the entire American Consumer Satisfaction Index. Time Warner Internet Service was deemed the most-hated in 2014. Last year, the company improved to third-worst.
Now, after years of poor customer service ratings and numerous complaints, the company is being acquired by Charter Communications. According to Bloomberg, Charter closed the Time Warner merger for $55.1 billion in May. Alex Dudley, a company spokesman for Charter, told Bloomberg that the Time Warner name will be gradually removed. “While Time Warner Cable and Bright House Networks customers will not see any immediate change, the company will be called Charter and the products and services will be marketed under the ‘Spectrum’ brand,” he said.
Charter CEO Tom Rutledge said that the company plans to invest “enormous amount of money” to improve customer service.
“It’s not surprising Charter wants to rebrand Time Warner Cable,” said ACSI’s managing director David VanAmburg. “Charter has scored better than Time Warner Cable in recent years, so it could bode well for Time Warner Cable customers. But the data suggests leaps-and-bounds improvement could be difficult.”
Last year, Charter received a pay-TV score of 63 compared to 51 for Time Warner. The broadband score, however, was 57 compared to 58 for Time Warner.
“Nobody in the cable industry performs particularly well,” said VanAmburg, according to Bloomberg. “One merger isn’t going to change structural issues with pricing, infrastructure and battles with content providers. When there’s not a great deal of competition in an industry, you’re not going to get great satisfaction scores.”
Some 14 million customers receive TV or high-speed internet and phone services through Time Warner Cable.
Filing a Consumer Class Action Lawsuit
If you or someone you know is interested in filing a class action lawsuit, contact Parker Waichman today. Our experienced attorneys offer free, no-obligation case evaluations. For more information, fill out our online form or call 1-800-YOURLAWYER (1-800-968-7529).