Time Warner was one of the largest cable television providers in the United States. The company was acquired by Charter Communications in 2016. Founded in 1962, Time Warner served the American public for sixty years. Multiple lawsuits filed against Time Warner cost the company billions. Here are the 10 biggest Time Warner Lawsuits in company history.
10. Time Warner Cable sued for employment-related offenses Penalty amount: $3.75 million
Time Warner Cable agreed to settle charges of wage and hour violations for $3.75 million. A civil lawsuit was filed against Time Warner in a Southern District of New York Federal Court under the case name Oleniak et al v. Time Warner Cable Inc. et al. The private litigation alleged that workers at a call center owned by Time Warner were denied compensation for all hours worked. They were forced to clock out and continue working without pay, by the company. The violations happened at the New York and New Jersey facilities. The workers banded together in a class-action lawsuit requesting compensation for the hours worked without pay. Forcing employees to work off the clock without pay is a violation of wage and hour laws, enforced by the Labor Boards in the respective states. It’s also considered unfair employment practices, and it’s against the law. Time Warner agreed to a settlement of $3.75 million to resolve the allegations and end the case. The settlement was agreed upon and approved on October 30, 2014.
9. Time Warner Sued for making false claims to gain business Settlement amount: $18.8 million
San Diego and Riverside, Los Angeles County district attorneys filed a lawsuit against Time Warner over allegations of luring through deceptive advertising and making promises it knew it could not keep. The Cable giant advertised faster internet speeds for an inflated price when it could not deliver on those promises. It lured consumers into signing up for faster internet speeds, after introducing its higher internet speeds in 2013, but the modems issued to consumers could not handle the increase in bandwidth. Time Warner had engaged in false and deceptive advertising, fraud, and consumer protection violations. Time Warner agreed to a settlement of $16.9 million in reimbursements to affected customers for restitution. The internet provider was also instructed to provide updated modems capable of handling the increased bandwidth. An additional penalty of $1.9 million was ordered to cover the costs of investigations to three prosecuting agencies involved in the litigation. More than 170,000 customers in Southern California were affected by the activities of Time Warner.
8. Public Employees file claims against Time Warner Settlement amount: $144 million
The Star confirms The Ohio Bureau of Workers’ Compensation filed suit against Time Warner for five state pension funds that enured loss of $400 million due to the drop in TW’s stock from the disastrous merger with AOL. Investors saw stocks drop drastically in the wake of the company’s ill-advised adventure. AOL was originally part of the claim but it was eventually dropped from the lawsuit, leaving Time Warner solely responsible for the penalties. During the proceedings, Time Warner admitted no wrongdoing but agreed to pay a settlement of $144 million to resolve the case that included multiple plaintiffs from Ohio, who opted out of the larger class action lawsuit. The event happened in 2001 with lawsuits filed in 2003. Class-action lawsuits can be drawn-out for several years or even decades. Plaintiffs opting out of the larger movement resolve their cases faster and generally receive higher amounts in their settlements than if they continue to pursue membership in the class action.
7. Spectrum-Time Warner sued for failure to keep promises Settlement amount: $174.2 million
Top Class Actions reports that the Attorney General’s Office filed a lawsuit on behalf of the customers of Spectrum-Time Warner for claims that promises made to customers about internet speeds were unfulfilled. The failure to provide the quality of agreed-upon services for the fees charged resulted in fraud. The internet speeds promised to customers with outside of the realm of what the cable provider was capable of rendering. Time Warner knew that the claims were beyond its capacity. They, therefore, defrauded the public, and customers, making them liable for charging prices for the products that were not as represented. Each subscriber became eligible to receive a minimum of $75 or more in credits on their bills for the victimization they endured. Other options for subscribers to the cable and internet service include three months of free HBO or six months of Showtime or other combinations that compensate for the loss. The settlement was reached in 2018.
6. Time Warner settles with California Universities over shareholder lawsuit Settlement amount: $246 million
RGD Law reports that the unsuccessful merger of AOL and Time Warner resulted in $200 billion in losses. A class action lawsuit is long and drawn out. Multiple institutional investors dropped out of the class action to pursue recovery of financial damages for their shareholders. The Regents of the University of California opted out and went to the negotiation table with Time Warner to reach an agreement for their portion of the settlement. They filed a case in a California State Court in 2003. The plaintiffs, as members of the class action, held the potential for receiving far lower settlement amounts because of the complexity of the litigation, and the number of institutional investors seeking compensation for their losses. Those who opted out received settlements that exceeded 14 to 16 times the financial recovery over what the class action would have produced. After penalties and legal fees, the total settlement amount that the Regents of the University of California received was slightly more than $200 million.
5. Time Warner penalized millions for aiding and abetting illegal activities Penalty amount: $300 million
The Securities and Exchange Commission charged Time Warner with aiding and abetting the fraudulent activity of other companies. The SEC went hard on TW because this was not its first offense. The company was already under a previous Cease and Desist order. Several key employees in executive positions were charged with activities that led to reporting violations. Time Warner knew about three other securities frauds in progress, and according to the investigating agencies, it aided and abetted them in criminal activities. Time Warner neither admitted nor denied the allegations. Instead of fighting the lawsuit in court, it consented to pay a settlement amount of $300 million in penalties to the SEC to help offset additional judgments rendered in the then ongoing SEC case. Time Warner faced other received orders to comply with the Cease and Desist order since 2000, along with its agreement to “restate its historical financial results to redo its reported online advertising revenues.” It had previously restated $190 million. Investigators discovered an additional $500 million in misstatements they required them to change. AOL Time Warner had to hire an independent examiner to approve the changes. The settlement resolved the case in 2005.
4. Time Warner settles in opt-out settlement from a class-action lawsuit Settlement amount: $400 million
PlanSponsor reports that institutional investors involved in a class-action lawsuit against Time Warner opted out of the lawsuit. Five investors settled outside of the suit with Time Warner for $400 million amid an ongoing case that claimed illegal accounting standards embraced by America Online. The University of California will receive the largest share of the settlement. The opt-out agreements resolved their claims in 2007 with a mutual agreement for compensation. The compensations for the five opted-out investors were significantly higher than the amount they would have received as members of the class action. Other undisclosed settlement amounts got distributed among Amalgamated Bank, the California Public Employees Retirement System, and two employees to pension funds in Los Angeles County. The case is one of the largest opt-out settlements in the history of the company.
3. Time Warner settles with DOJ for hundreds of millions in penalties for SEC violations Settlement amount: $510 million
The United States Department of Justice investigated claims that America Online and Time Warner made deals for advertising services that included false claims. AOL’s exaggeration of its growth met the criteria for making fraudulent statements and deceptive practices in advertising, both illegal activities. The allegations claim AOL and Time Warner struck deals with smaller internet companies to allow the false claims. The Securities and Exchange Commission conducted its investigation of the claims independent of the DOJ investigations, searching for irregularities in the accounting practices of America Online. Neither denied the allegations nor did either admit to any wrongdoing. Time Warner representative stepped to the forefront of the battle to attempt to expedite the separate investigations because the entity had plans to join another company in a proposed merger. Time Warner wanted to close the case as soon as possible to lessen legal expenses for the defense in the case. Other reasons included allowing AOL to get on with business after years of poor performance and numerous legal issues. Time Warner faced civil and criminal allegations from the Department of Justice and the Securities and Exchange Commission, with charges likely if the evidence supported the credibility of the claims against them. They expected the settlement to resolve the case with the Department of Justice and the Securities and Exchange Commission with an estimated penalty between $500 million to $600 million. The case closed in December of 2004 with Time Warner paying the DOJ $210 million and negotiations to agree on the SEC penalty of $300 million, according to The Ledger.
2. Time Warner Settles Securities Fraud Lawsuit from 2001 Settlement amount: $2.5 billion
Time Warner settled the class-action lawsuit that accused the cable and internet giant and AOL of securities fraud, causing financial harm to its shareholders. CNN/Money reported that the litigation was ongoing from 2001 when AOL inflated its advertising revenue and misstated the number of internet subscribers it had in 2001. Plaintiffs alleged that Time Warner’s merger with AOL caused stocks to drop dramatically, causing financial harm. Exaggerations of AOL’s performance and advertising and statements made by the company that was known to be untrue are deceptive advertising and fraudulent. The SEC investigated allegations with other agencies and found evidence to support the claims made from the corporate advertising activities between January 27, 1999, and August 27, 2002. The amount of the lawsuit settlement cost $2.4 billion paid by Time Warner Inc. and $100 million paid by Ernst & Young, its auditor. The settlement agreement saved all parties in legal expenses for long and drawn-out litigation with added court costs and attorney fees.
1. Time Warner and Comcast sued for racial bias allegations Lawsuit amount: $20 billion
First Post confirms a lawsuit for $20 billion emerged against Time Warner Cable and Comcast for allegations of discrimination and racial bias against African Americans. The National Association of African-American Owned Media et al, v. Comcast Corp et al, is the case name filed in a US District Court, Central District of California in 2015. The lawsuit claims that Time Warner Cable and Comcast each had only one channel owned by African-Americans, called the Africa Channel. A proposed merger between Comcast Corp and Time Warner Cable linked them together in other complaints of discrimination. The plaintiffs further allege that Comcast offered large sums of cash in donations for their silence and endorsement of the legal action for their refusal to contract with the group. Comcast denied any wrongdoing and hinted at counterclaims of defamation. Neither Time Warner nor the NAACP would comment on the suit. Comcast settled out of court. In 2020, the Supreme Court ruled that the Time Warner case may proceed. This is the largest lawsuit and settlement filed against Time Warner.