Fixing Class Action Lawsuits

from the objecting-to-settlements dept

For a long time, we've noted that while class action lawsuits do serve a useful purpose, it seems like all too often they're abused. Quite frequently, we see the only "class" that really benefits from such lawsuits are the lawyers who file the lawsuit, who end up taking the bulk of any "settlement." In some cases, it's even worse -- where not only do lawyers get the bulk of the settlement, the rest of the class actually gets pushed into buying more products from the company that was sued. Such class action lawsuits not only make the lawyers richer, they actually act as marketing for the company that was sued. One of the worst such cases we can remember involved Netflix, which "settled" a class action lawsuit by giving current customers a "free" one-month upgrade -- but if you didn't manually downgrade your account, they started charging you the higher price the following month. That's not a "settlement" so much as a way to get a bunch of customers to upgrade. If I remember correctly, that settlement was actually thrown out.

Eric Goldman points us to an interesting profile of Ted Frank, a lawyer who is focusing on trying to stop such bad class action lawsuits and settlements by objecting to the settlements when they seem so far over the line. While, as the article notes, there have been a bunch of "professional settlment objectors" in the past, most have been doing it for money (getting some of the attorney's fees). Frank, however, hasn't taken attorney fees (though he says it's a possibility in the future), and is funded by a charity:
"The whole reason I started this is because there is a high probability of district courts rubber-stamping settlements," Frank says. "I think these are very bad settlements that the [9th U.S. Circuit Court of Appeals] will ... provide guidance for when judges should or shouldn't approve settlements."
Again, the concept of a class action lawsuit isn't bad, but it's definitely been widely abused -- so it's nice to see someone pushing back from within to try to stop the worst abuses.
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: class action lawsuits, settlements, ted frank

Reader Comments

Subscribe: RSS

View by: Time | Thread

  1. icon
    Steve R. (profile), 27 Mar 2010 @ 1:30pm

    Re: Cox Censorship

    A major concern with class action lawsuits is that the lawyers only get involved if they can make $$$$$. You also have an issue of damages. Where are they? Your email didn't go out, so what?

    Whether you realize it or not, your post actually raises a very subtle point of the net-neutrality debate. If the ISPs, such as COX, are not required to provide a neutral internet you will find a lot more "obstructions" than an inability to send email. We need guarantees for a neutral internet.

    Actually, as I was writing this, it occurred to me that many of those in the tea party movement are against government involvement in a persons life. While I have no idea concerning your position on government regulation; I find it amusing that you would be complaining about what the company is allowing you to do on "their" network. Many people on the political "right" claim that companies can do whatever they want whenever they want. Customers have no rights. If you are a disgruntled consumer, too bad. Don't use Cox.

Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here

Subscribe to the Techdirt Daily newsletter

Comment Options:

  • Use markdown. Use plain text.
  • Make this the First Word or Last Word. No thanks. (get credits or sign in to see balance)    
  • Remember name/email/url (set a cookie)

Follow Techdirt
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it

Email This

This feature is only available to registered users. Register or sign in to use it.