“Quasi-criminal”: the 3rd court circuit relaunches an action against the billing practices of the cable television provider Altice

The United States Court of Appeals for the Third Circuit has reopened a lawsuit brought by New Jersey regulators challenging certain billing practices of cable television provider Altice USA Inc.

The court ruled that a U.S. District Court judge wrongly dismissed a lawsuit brought by the New Jersey Board of Public Utilities over Altice’s failure to prorate monthly customer bills.

The judge below said New Jersey’s requirement for pro-rated billing was pre-empted by federal law, but in doing so he incorrectly applied the forbearance doctrine under Younger vs. Harrisa 1971 U.S. Supreme Court case, the appeals court said.

Deputy attorneys general Alec Schierenbeck and Meliha Arnautovic represented the BPU. Lee Moore, a spokesman for the attorney general’s office, declined to comment on the case.

Matthew Hellman and Howard Symons of Jenner & Block represented Altice, along with Thomas Gamarello and Jeffrey LaRosa of Schenck, Price, Smith & King in Florham Park, New Jersey. They did not respond to requests for comment on the decision.

Prorated billing

The dispute between Altice and state regulators arose after many consumers complained about the company’s policy against bill prorating.

The BPU has ordered the company to explain why its failure to apportion bills on a pro-rata basis is not a violation of an order issued by the agency in 2016 during its merger with competitor Cablevision, ordering it to Comply with state customer service standards, including billing requirements. .

When Altice resisted, the BPU ordered it to prorate bills, issue refunds to customers whose bills were not prorated, pay $10,000 to a program providing low- cost and provide a list of customers who had not received prorated invoices.

Altice appealed this order to the Superior Court of New Jersey.

Altice also sued the BPU in federal court in 2019, saying the pro-rated billing rule was beyond the agency’s authority.

U.S. District Judge Brian Martinotti dismissed the case on March 23, 2021, finding that Younger the forbearance did not apply because the underlying state matter is not criminal or quasi-criminal in nature. Younger the forbearance prevents federal courts from hearing a challenge brought by a person who is currently being prosecuted in state court for a criminal matter arising from the claim.

The BPU appealed and Judges Thomas Hardiman, Patty Shwartz and D. Brooks Smith declared that the absence of a criminal analogue was not a prerequisite for Younger abstention. However, even if a criminal analog were required, New Jersey law criminalizes certain violations of its cable television law, the panel said.

Altice’s claim that the state could not prove that it violated a criminal law is irrelevant, the court said. The question is not whether the current action is criminal or whether criminal charges are warranted, but whether there is a criminal analog, the court said. It is not necessary to determine whether a criminal action against the party would succeed, the court said.

“For these reasons, the BPU’s civil enforcement proceedings were quasi-criminal in nature and, therefore, the type of proceedings to which Younger applies,” Shwartz wrote for the court.

In addition, the district court should have applied Younger abstention based on a three-factor test of a 1982 U.S. Supreme Court decision, Middlesex County Ethics Committee v. Garden State Bar Association, the panel said. Based on these factors – whether or not there are pending legal proceedings, whether those proceedings involve significant state interests, and whether the party against whom forbearance is asserted has an adequate opportunity in the state procedure to raise constitutional challenges –Younger abstention is supported, the panel said.

The appeals court overturned the district court’s order and returned the case to dismiss Altice’s claim.