State v. Comcast Cable Commc'ns Mgmt., LLC

482 P.3d 925

STATE of Washington, Appellant,

v.COMCAST CABLE COMMUNICATIONS MANAGEMENT, LLC; Comcast Cable Communications, LLC; and Comcast of Colorado/Florida/Michigan/New Mexico/Pennsylvania/Washington, LLC, Respondents.

No. 80547-9-I

Court of Appeals of Washington, Division 1.

FILED March 8, 2021

Daniel T. Davies, Mary Elizabeth Howe, Seann C. Colgan, Washington Attorney General's Office, John Matthew Geyman, Attorney General of Washington, 800 Fifth Ave. Ste. 2000, Seattle, WA, 98104-3188, for Appellant.

Mark N. Bartlett, Ross Colin Siler, Davis Wright Tremaine LLP, 920 5th Ave. Ste. 3300, Seattle, WA, 98104-1610, David Gringer, Daniel Volchok, 1875 Pennsylvania Avenue N.w., Washington, DC, 20006, David Lehn, District of Columbia, 1875 Pennsylvania Ave. N.w., Washington, DC, 20006, for Respondents.

PUBLISHED OPINION

Dwyer, J.

¶ 1 The State of Washington brought this parens patriae action under the Consumer Protection Act, chapter 19.86 RCW, against Comcast Cable Communications Management, LLC, Comcast Cable Communications, LLC, and Comcast of Colorado/Florida/Michigan/New Mexico/Pennsylvania/Washington, LLC (collectively Comcast). Following a six-week bench trial, the trial court announced its decisions and entered findings of fact and conclusions of law. The trial court determined that Comcast violated the Consumer Protection Act by subscribing consumers’ accounts to a product known as the "Service Protection Plan"¹ both without obtaining consent and without disclosing the recurring monthly fees that attached to the plan. Accordingly, the trial court assessed civil penalties against Comcast and ordered Comcast to provide restitution to those consumers identified at trial as having been illegally subscribed to the Service Protection Plan.

¶ 2 After the trial court entered its findings of fact and conclusions of law, the State filed a CR 52(b) motion for amended and additional findings. In this motion, the State requested—for the first time—that the trial court order a detailed notice and claim procedure to provide the remedy of restitution to those consumers not identified and proved at trial as having been illegally subscribed to the Service Protection Plan. The State's motion also requested that the trial court amend its findings of fact and conclusions of law so that the civil penalties assessed were premised on the number of accounts, rather than the number of consumers, subscribed to the Service Protection Plan without consent. The trial court denied the State's motion.

¶ 3 On appeal, we are presented with two principal issues: (1) whether the trial court erred by denying the State's posttrial request for a notice and claim procedure, and (2) whether the trial court erred by basing civil penalties on the number of consumers, rather than the number of accounts, subscribed to the Service Protection Plan without consent. We affirm the trial court with respect to the first issue. However, with respect to the second issue, we reverse and remand to the trial court for further proceedings consistent with this opinion.

I

¶ 4 In 2016, the State brought this parens patriae action against Comcast, alleging that Comcast had violated the Consumer Protection Act in four ways: (1) by misrepresenting the scope of coverage provided by a guarantee offered by Comcast, (2) by misrepresenting the scope of coverage provided by the Service Protection Plan, (3) by subscribing consumers to the Service Protection Plan without consent, and (4) by subscribing consumers to the Service Protection Plan without disclosing the recurring monthly fees that attached to the plan.

¶ 5 The State did not prevail at trial on the first two claims. It did, however, prevail on its claims that Comcast illegally subscribed consumers to the Service Protection Plan both without obtaining consent and without disclosing the recurring monthly fees.

¶ 6 During discovery, the State requested that Comcast produce all telephone recordings in which Washington consumers were enrolled in the Service Protection Plan. Comcast objected on the ground that this request created an undue burden. The State filed a motion to compel, and the trial court ordered Comcast to produce 1,500 telephone recordings in which the Service Protection Plan was sold to Washington consumers. Comcast then produced over 7,000 telephone recordings from two separate sample periods: a sample from 2014 to 2015 and a sample from 2016.

¶ 7 The State's expert analyzed the telephone recordings from these sample periods to determine whether Comcast either obtained consent or disclosed the recurring monthly fees before subscribing consumers to the Service Protection Plan. In total, the expert identified 1,830 accounts in these call recordings: 392 from the 2014 to 2015 sample and 1,438 from the 2016 sample. For the 2014 to 2015 sample, the expert's analysis revealed that Comcast agents had failed to obtain consent for 34.8 percent of these accounts and failed to make fee disclosures for an additional 20.4 percent. Regarding the 2016 sample, the expert's analysis revealed that 36.6 percent of the accounts were subscribed without consent and 22.4 percent were subscribed without fee disclosures. Thus, approximately 1,000 of the 1,830 identified consumer accounts were subscribed to the Service Protection Plan either without consent or without fee disclosures.²

¶ 8 At trial, Comcast's expert testified that certain consumers had multiple accounts and, therefore, the total number of accounts subscribed to the Service Protection Plan did not equate to the number of consumers subscribed. In particular, Comcast's expert testified that 92,923 consumers in total were enrolled in the Service Protection Plan from January 2014 through June 2016. After Comcast rested its case, the trial court ruled that, on the evidence presented, there could be "no finding of liability under the [Consumer Protection Act] ... pre-July 1, 2014."³ Thus, Comcast's expert's testimony regarding the total number of consumers subscribed to the Service Protection Plan applied to a period of time that was six months longer than the period of liability.

¶ 9 The trial court found that 86,080 Washington accounts, rather than consumers, were subscribed to the Service Protection Plan from July 2014 through June 2016.⁴ To determine how many of these accounts were subscribed either without consent or without fee disclosures, the trial court applied the percentages from the State's expert's testimony to the total number of accounts subscribed to the Service Protection Plan. Accordingly, the trial court found that 30,946 accounts were subscribed without consent and 18,660 were subscribed without fee disclosures.

¶ 10 However, in calculating the civil penalties that were imposed on Comcast for the consent claim, the trial court based the penalties on the number of consumers, rather than the number of accounts, subscribed without consent. Specifically, the trial court found that 20,049 consumers were subscribed to the Service Protection Plan without consent from July 2014 through June 2016. Finding of Fact 186.

¶ 11 Although the trial court calculated civil penalties for the consent claim based on the number of consumers subscribed to the Service Protection Plan without consent, it calculated civil penalties for the fee-disclosure claim based on the number of accounts subscribed without fee disclosures. Notably, the trial court found that "[t]he total revenue that Comcast collected from Washington customers who enrolled in the [Service Protection Plan] by telephone from July 1, 2014 through June 30, 2016 was $2,438,721." Finding of Fact 183. The civil penalties assessed against Comcast amounted to $6,014,700 for the consent claim and $3,078,900 for the fee-disclosure claim. Conclusions of Law 76, 79.

¶ 12 In addition to seeking civil penalties, the State made numerous requests for restitution. Regarding the consent and fee-disclosure claims, the State requested, during closing argument, that the trial court order restitution to those consumers whose accounts were subscribed to the Service Protection Plan both without consent and without fee disclosures:

And how much [restitution] is owing? Again, the slamming claim,^{[5 ]} 36.6 percent of subscribers that were subscribed over the telephone, negative option,^{[6 ]} 22.4 percent of subscribers who were enrolled over the telephone.

¶ 13 The State also requested, as a part of its claim that Comcast misrepresented the scope of coverage provided by the Service Protection Plan, that the trial court order restitution to every consumer who was subscribed to the plan:

[E]verybody's entitled to restitution because everybody was subject to the [Service Protection Plan] scope claim. That's 100 percent of subscribers.

So even if there's questions about how far -- how much to extrapolate the slamming claim, the negative option claim, because everybody was subject to the Service Protection Plan, the misrepresentations regarding its scope, all customers are entitled to restitution.

¶ 14 The State's trial brief also explained that this particular request for restitution was limited to the claim regarding the Service Protection Plan's scope of coverage:

Comcast violated the [Consumer Protection Act] for each [Service Protection Plan] purchaser at the time of his or her enrollment. Comcast may challenge the specific number of slamming and negative option victims, but a precise breakdown of the percentage of consumers subject to each of those subcategories is unnecessary for awarding full restitution: Comcast violated the [Consumer Protection Act] when it told all remaining [Service Protection Plan] enrollees that the [Service Protection Plan] covered all service calls without disclosure of the [Service Protection Plan]’s coverage exclusions. Comcast's [Service Protection Plan] scope [Consumer Protection Act] violations date back to January 2011 at a minimum, and the parties stipulated that the call recordings produced by Comcast are

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