Fischer v. Time Warner Cable Inc.
234 Cal. App. 4th 784
| Cal. Ct. App. | 2015Background
- Time Warner Cable bundled Lakers and Dodgers channels into its basic tier, raising monthly rates for subscribers.
- Time Warner paid $3 billion for Lakers rights (20 years) and $8 billion for Dodgers rights (25 years), expanding sports channels in the tier.
- Subscribers sued under California’s UCL alleging unlawful bundling and rate hikes to fund sports channel carriage.
- Trial court sustained demurrers without leave to amend, finding potential preemption by federal law.
- Regulatory framework: FCC regulates cable under the Cable Act; 47 C.F.R. § 76.981 permits certain nonfundamental changes without subscriber consent and preempts conflicting state protections.
- Court addresses whether Regulation 76.981 preempts the California UCL in this rate-change context.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal regulatory preemption applies to the UCL claim. | Appellants contend state law may regulate negative option billing and rate changes. | Respondents argue Regulation 76.981 preempts state enforcement of these practices. | Preemption applies; UCL claim barred by Regulation 76.981. |
| Whether Regulation 76.981 covers nonfundamental channel changes. | Three added channels and rate hikes constitute a fundamental change. | Regulation 76.981 allows nonfundamental changes without consent and preempts state law. | Regulation 76.981 governs nonfundamental changes and preempts state law claims. |
| Whether the FCC interpretation of 76.981 is a permissible regulatory action. | FCC interpretation should not preempt California consumer protections. | FCC interpretation reasonably reconciles rate regulation with consumer protections. | FCC interpretation deemed proper; preemption upheld. |
Key Cases Cited
- Time Warner Cable v. Doyle, 66 F.3d 867 (7th Cir. 1995) (regulatory preemption of state consumer protection in negative option billing)
- Time Warner, 56 F.3d 151, 56 F.3d 151 (D.C. Cir. 1995) (FCC interpretation of negative option billing and preemption framework)
- City of New York v. FCC, 486 U.S. 57 (U.S. 1988) (preemption and agency authority over regulatory schemes)
- Brown v. Mortensen, 51 Cal.4th 1052 (Cal. 2011) (supremacy and preemption principles in California law)