February 4, 1998 in Nation/World

Tci Settlement Sparks Debate Critic Calls Proposal A ‘Sweetheart Deal’ That Benefits Attorneys More Than Consumers

By The Spokesman-Review
 

Washington customers of TCI must respond quickly if they want to stop a deal that could deny them millions in refunds, a Washington, D.C., lawyer said Tuesday.

Phil Friedman said the cable television provider has negotiated a “sweetheart deal” with an Okanogan County attorney that does not adequately roll back late fees, or return past overcharges.

Friedman, who has already won multimillion-dollar judgments against TCI in the District of Columbia and Baltimore, said he and the Washington Attorney General’s office oppose the settlement, which has been submitted to Okanogan County Superior Court Judge Jack Burchard for approval.

The settlement calls for a reduction in late fees from $5 to $3. Although the deal also extends the late period 10 days to a total of 40 days - a provision Friedman endorses - he noted TCI also would be entitled to charge a new $15 disconnect fee 15 days after the late period has elapsed.

Subscribers also would receive three $2.50 coupons to apply toward $5 pay-per-view movies. Friedman predicted less than 5 percent would use the coupons.

Friedman said TCI puts the potential cost of the settlement at $11.5 million if its 500,000 subscribers redeem all the coupons.

By comparison, he said, TCI’s 100,000 Baltimore customers would split $7.5 million if that judgment is upheld. In his ruling, the judge there said anything more than 50 cents was an excessive late fee, Friedman said. That case is on appeal.

If Washington subscribers were awarded the same relief, he said, TCI would be liable for as much as $37.5 million in refunds.

Friedman said the Washington settlement was the result of a deal between TCI and Omak attorney Richard Price, who filed a class action suit in 1994.

Burchard dismissed that case.

When Price appealed, TCI offered the settlement now before the court. Price and fellow attorney Scott Kane stand to split as much as $650,000 if the deal is approved, Friedman said.

He said the settlement makes opting out of the package difficult. Foes must draft their own letters, get them notarized, and they must be postmarked If he succeeds in arguing against recognizing the Okanogan lawsuit as a class action, he said he will file a new case, probably in King County.

TCI attorney Brian Everle said the settlement is reasonable in light of rulings elsewhere in the country, and legislation in states like California.

Also, he said, all TCI subscribers benefit, not just those who have paid late fees. That approach saves substantial amounts of administrative costs, he said.

Everle said TCI will argue that Price and Kane are entitled to only $250,000 in fees. The money Burchard sets aside will not come out of the settlement amount, he added.

Friedman has sought one-third of the settlements he has won in Baltimore and the District of Columbia, Everle noted.

Price said the fees he and Kane are seeking amount to about 5 percent of the estimated cash value of the settlement, compared with the 22 percent typically taken by attorneys in class action lawsuits.

The Washington Attorney General’s office also will file a brief in the case, but a spokeswoman said the details of the state’s response have not been worked out.

, DataTimes MEMO: To opt out of the settlement, TCI subscribers must send a notarized letter of their decision with their name, address and telephone number to: TCI Class Action Settlement; 315 N. Second; P.O. Box 707; Okanogan, WA.; 98840.

To opt out of the settlement, TCI subscribers must send a notarized letter of their decision with their name, address and telephone number to: TCI Class Action Settlement; 315 N. Second; P.O. Box 707; Okanogan, WA.; 98840.


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