Cablevision Systems Corp has been accused in a $250 million lawsuit of continuing to bill and failing to offer rebates to more than 1 million customers who lost TV, Internet or phone service because of Hurricane Sandy.
The complaint, filed on Tuesday with the New York State Supreme Court in Nassau County, said Cablevision had not met its contractual obligation to offer credits to customers who lost service for more than 24 hours.
It said the Bethpage, New York-based company instead offered rebates only to its "most favored" customers on a discretionary basis, and only after they requested them.
The lawsuit seeks class-action status, rebates, punitive damages and a halt on future billing for periods where there are lengthy service outages.
Cablevision spokesman Charlie Schueler said the complaint "misstates the facts" and is without merit.
"Blanket or arbitrary credits for cable outages could shortchange customers," he said. "Each case is different and our policy covers the entire period of time when Cablevision service was out, including when the service interruption was caused by the loss of electrical power."
The lawsuit was brought on behalf of subscribers Irwin Bard, a retired businessman from Oyster Bay, New York, and his son Jeffery, a lawyer from Huntington, New York, their lawyer Hunter Shkolnik said.
He said the $250 million figure is based on the duration of outages, the number of people affected, and the services lost.
"Most customers didn't complain because the company was making public statements that it was doing its best to restore service," Shkolnik said in a phone interview. "But that means if you didn't call, you didn't know you could get a rebate."
Also on Tuesday, the Long Island Power Authority and UK-based National Grid Plc were sued over alleged negligence linked to power outages in Nassau and Suffolk counties that followed the late-October storm.
In afternoon trading, Cablevision shares were down 2.1 percent to $13.94.
The case is Bard et al v. Cablevision Systems Corp et al, New York State Supreme Court, Nassau County, No. 602291/2012.
(Reporting by Jonathan Stempel in New York; Editing by Lisa Von Ahn and Tim Dobbyn)