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Supreme Court Scrutinizing Class Action Settlements That Leave Consumers Empty-Handed (marketwatch.com)
If a multimillion dollar class-action settlement basically doesn't pay a single consumer, is it fair? That's not the start of a lawyer joke; it's the crux of a case being argued Wednesday in the U.S. Supreme Court that, advocates say, has serious implications for the ways consumers benefit from duels with businesses in large-scale litigation. From a report (paywalled): "This is potentially billions of dollars going from everyday consumers to lawyers' slush funds," said Ted Frank, the litigation director at the Competitive Enterprise Institute, who's disputing the $8.5 million settlement between Google and 129 million class members before the Supreme Court. The case, Frank v. Gaos, focuses on the question of whether it's fair and reasonable to ever have class action settlements that give money to outside groups instead of the class members themselves. A decision for Frank -- who also happens to be a class member in the Google case and is a longtime gadfly questioning class action settlements -- could require the money go directly to consumers and upend a class action pay out method that's been around for decades.
The underlying case has to do with Google's 2013 agreement to pay $8.5 million to settle a case claiming widespread privacy rights violations. When any web surfer looked up topics on Google, the search engine beamed the search terms -- like "depression" and "medical leave" -- in the URL string to the third-party websites. The search term revelations broke various state and federal laws, plaintiffs said. After about three years of litigation, the parties settled. Google added more online disclosures and opened its wallet without admitting liability. The settlement's payouts included a $5,000 award for each of the three named plaintiffs and $2.12 million for the legal fees of the plaintiffs' lawyers. The remaining $5.3 million was divvied up among six universities and organizations pledging to put the money towards improving internet privacy. Lawyers for both Google and the class members say Frank's objections to the settlement are unfounded.
The underlying case has to do with Google's 2013 agreement to pay $8.5 million to settle a case claiming widespread privacy rights violations. When any web surfer looked up topics on Google, the search engine beamed the search terms -- like "depression" and "medical leave" -- in the URL string to the third-party websites. The search term revelations broke various state and federal laws, plaintiffs said. After about three years of litigation, the parties settled. Google added more online disclosures and opened its wallet without admitting liability. The settlement's payouts included a $5,000 award for each of the three named plaintiffs and $2.12 million for the legal fees of the plaintiffs' lawyers. The remaining $5.3 million was divvied up among six universities and organizations pledging to put the money towards improving internet privacy. Lawyers for both Google and the class members say Frank's objections to the settlement are unfounded.
Lots of lawsuits are about "stop doing that", not about "pay me money".
If a lawsuit makes a company stop doing something bad to millions of people, isn't that a good thing?
Now, if you want to talk about what's fair & reasonable in lawyer fees, that's another conversation...
My simple solution: Let's add a Constitutional Amendment specifying that lawyers can't get more than 10% of any verdict.
it's a terrible idea but it's the best we can get with the current political system.
I worked for a company that made everyone come in 20 minutes early to set up their workstations and leave 10 minutes late, all unpaid. 30 minutes free labor a day times several thousand employees. It was millions. I didn't get much from the lawsuit but the company did have to start paying me for those 30 minutes.
My state doesn't have a labor board (there's one on paper but it's not funded). The threat of lawyers suing for a big payday is the only thing keeping most companies honest in my neck of the woods.
Like Arbitration this strikes me as the latest attack on that very minimal protection consumers have. Would I like to live in a world where I don't rely on skeezy lawyers getting big cash payouts for little to no work as the only protection I have from abuse by mega-corps? You bet. But I don't. I live in the real world, and I'm a realist. Until I can get folks to vote for genuine change I'll take what I can get.
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Using the example from TFA/TFS: "$8.5 million settlement between Google and 129 million class members"
8.5/129 = $0.065 per person
How do the authors propose to distribute those six-and-a-half-cents? Via a postcard check, with $0.20 of postage?
Nuts, just the administration overhead to find & verify each class members would be more than six cents.
workers really need an union to stand up to bs like that!
All of them?
... that I can join a class action suit, I throw it away. Why get my hopes up that I might, some day, receive a check for something on the order of $0.17?
CUR ALLOC 20195.....5804M
Go away Ivan
Lots of lawsuits are about "stop doing that", not about "pay me money".
Then you ask for a payment of $1. Quite a few activist lawyers will ask for attorney's fees plus damages of $1. If you are asking for damages of millions of dollars plus attorneys fees, then you're in it for the money.
Conversely, anyone suing a company for something that harms people have to show that they have actually been harmed. You can't sue a company for discriminating against people if they have never discriminated against you.
Incentivize people into filing and jumping into any and every class action suit, hoping for a payday? Or increase the incidence of such suits being frivolously initiated and litigated?
Is that you, Admiral Ackbar?
Facts like Orange Man Bad!
Too many times I see these settlements where the lawyers make what amounts to a sweetheart deal with the megacorp. The class members get next to nothing of value, the lawyers collect millions, and the megacorp gets off paying ultimately a fraction of a day's revenues, often not having to admit liability, and basically keeping all the rewards from their malfeasance.
If one follows the legal firms, or their principals, it seems like sometimes they also get some lucrative business from one of the megacorp's subsidiaries or partners as a result too.
In my mind it is legal malpractice to not achieve some positive goal for the class -- getting real compensation, or punishing the violator significantly and getting legal rulings that the non-class members can use to sue without having the class action ruling being a major bar to them collecting on their own.
It's my understanding that this hearing is about Cy Pres settlement distributions, not necessarily attorney's fees.
Briefly, a cy pres award is the distribution of money from a class action settlement to a charitable organization. [taken from google]. Sometimes, it would be hard to distribute any sort of settlement to that many google users (how do you identify them? Get them their money?). So, award goes to a charity that is related to that class action.
Most media articles about this case will probably imply that it is about attorney's fees, but there are a few different things going on here.
Slashdot is fact based. But facts have a well established left wing bias
Only in your mind. Facts are Facts, neither the far right or the far left find much support in them. Both sides concentrate on only the facts that support their positions and ignore the rest. The far left and right don't recognize the fact that they are driven by confirmation bias, not all the facts.
Unfortunately, in today's society there is no middle ground in politics. We are seeing WWI style trench warfare in today's political landscape, where the middle ground is routinely scorched by flamethrowers from both sides. Facts are no longer facts, but lies to those who choose not to believe them and weapons to bludgeon others when they support their truth.
There should be a requirement that the lawyers cannot collect any more money from the settlement than the collective payouts to the members of the class. If the courts awards $10M in the suit, then the most the lawyers can collect is $5M. And they can only collect that $5M if they are able to distribute the other $5M out to class members. Right now they have an incentive to have as few class members claim their 'winnings' as possible, since they get whatever is left.
Letâ(TM)s fine then instead. Because that will surely get the damages to the consumer.
This fucking country...
Make the lawyers receive payment just like the members of the class do - with very small checks. If it's a $10 payout for the class, then a $10 million payday for the lawyer is in the form of one million $10 checks.
Pay attention. Follow the money. Republicans want to limit class action because they hurt business. Democrats like them because the little guy gets justice.
But what of the big guy lawyers who earn tens of millions steering this wildcat lawyer lottery, and then donate big to the Democrats to keep the gravy train running?
They will lose out. So which way will their politicians fall? For the little guy in public, but resist this in private?
Follow the money.
Supreme Court Scrutinizing Class Action Settlements That Leave Consumers Empty-Handed
A free small cone or fry coupon is not empty-handed!!!
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
I think the problem in this case is that universities do not qualify as charities. They are businesses aimed at making money.
it was manufacturing going away and/or being automated. Manufacturing was easy to Unionize because you had a shit ton of employees all in the same place (the factory floor). The closest you get with that is an Amazon warehouse, even those don't have as many employees as a factory from 50 years ago and they make it a point to ban employees talking to each other so they can't complain and organize (among other Union busting tactics).
Come to think of it that's the other trouble Unions have: Employers learned from their experience with Unions and got better at busting them. Employees didn't learn a god damn thing. I can't tell you how many folks just complain about how corrupt unions are when they go to their job that pays well and is safe because of a Union from 50 years ago who won those protections at the barrel of a gun.
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Law firms are businesses, not charities. That's certainly true. Now what do you think all those lawyers who can't sue mega corporations for fat sacks of cash are going to do? Think they'll close up shop and go become public defenders? Maybe do night shift at the local WalMart?
Nope, they're gonna sue you and me (since we can't afford to buy off a Senator or House rep to defend us). As the Chinese say, Interesting Times.
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class action lawsuits over the years, have only benefited the lawyers. while consumers get pennies or coupons, the lawyers get millions in cash. doubt anything will change, the lawyers will always win since they have all the money.
I'm confused about what you're saying.
All along you seem to understand things, then in the last sentence you make a conclusion that doesn't follow from your (correct) statements.
You start with the class, people who have used Google search. That's maybe a hundred million people.
Subtract the people who don't want to be considered part of the class, so that they could theoretically sue individually. That's a few thousand people, maybe.
After subtracting the ~ zeroish people who want to sue individually, you're left with about a hundred million "injured" parties (class members).
How do you figure Google should pay those hundred million people? The total recovery net of legal fees is 5 million.
This was the same of the Microsoft settlements.
I was in the class action against them, twice, in two different states. I actually wrote up a reply to try to intervene, but I was young and had no lawyer and so I never actually went anywhere with it. The basic argument I wanted to make was very similar to what you said:
* There was no promise to change any behavior and no clear reason why conduct after the cutoff date in the lawsuit wouldn't give rise to the same sort of claims.
* The leftover money in the settlement was being given to the schools, which was fine, but it had restrictions on it that would essentially force them to buy new Windows computers, helping to cause exactly the sort of monopolistic harm it was ostensibly supposed to prevent given that education was one of the few large markets for Macs.
This question will soon be moot as Mandatory Binding Arbitration clauses become the new norm and lawsuits (especially class action lawsuits) become a historic legal curiosity. (As does the concept of "consumer protection".)
All in all, it's little more than a way for lawyers to milk money out of big corporations by using consumers as leverage on the wallets of said corporations.
Lawyers and legal fees.
What about compensation for the consumers?
Is that what the Supreme Court is actually looking into, or is it more like: Is it fair to bleed the corporations if no consumer gets compensation, and. therefore "wrong" to do so?
Just curious as to the reference to "fair" in this usage.
This should not be a division of an overall penalty by the number of class members, but a determination of the amount of compensation due to an individual for the harm done, multiplied by the number of class members. If it's thought that $5000 is an appropriate award for each of the three named plaintiffs in this case then Google should be paying $5000x129 million ($645 billion). That would certainly make them, and *any other company*, think twice about privacy violations.
The jump from a hundred million to a few thousand was in this line:
Towards that end, there's generally a web form where claimants can go to either exclude themselves from the settlement or submit the necessary information to make their claim.
Most people don't bother with the paperwork, so they don't get a portion of the payout.
Okay, your post and reasoning makes sense to me now. Thanks.
My experience regarding the facts has been different from yours. As you said:
> At least with the handful of class action settlements I've been a party to, they send out notifications to the people in the class
At this point they already have my name and address and know I'm a class member, so they have all the information they need to send a check. I can opt OUT at that point. The lawyer would prefer I didn't, because they want to represent a large class.
Only more recently I've noticed they sometimes have two classes or subgroups, commonly those who were customers (the company did them wrong) and those who also are likely to have actual damages. If you don't respond, you're in the general class and get maybe $5. If you're in the more specific class, you submit the form and get $30 or so.
An example would be a data breach. All customers' data was leaked, so everybody gets $5. If you ALSO had a fraudulent charge on your card, you get $35. You have to submit the form to get $35. If you don't submit the form, you get $5.
That's been my experience.
I wish I could remember which class action I was part of lately. I was surprised when I got a check for a significant amount of money. I'm used to maybe $5.
I think you're considering two steps where you can respond.
1. Exclude yourself from the suit (or not).
2. Claim non-monetary compensation such as a free game.
Step 1 goes directly to the question of how many plaintiffs are representes in the suit. If the lawyer is suing on behalf of five people, the settlement or judgement will be a lot smaller than if they are suing on behalf of 50,000 people. Therefore that step needs to be completed before the settlement or judgement.
Step 2 would be after the judgement or settlement.
Suing on behalf of more people (step 1) will result in a larger total award and probably larger legal fees.
Having some people not claim the award will either a) save the defendant money or b) allow more to be distributed elsewhere.
In my cases, the only non- monetary awards I recall have been a) free credit monitoring (don't want) or b) a credit to my existing, ongoing account with the merchant. So I've never had need to pick a game or otherwise actively select anything with the award - I just get the check or account credit.
On an entirely different topic:
Sometimes I help people figure out how to make up for things they've done wrong. (Basically when they decide they don't want to be a shit head anymore.) The easiest cases are when they know exactly who they wronged, how to contact them, and what would set it right - money or whatever. Whenever possible, we set it right directly with the person harmed, by undoing whatever the harm was, by doing the opposite of the bad thing.
Other cases are much more difficult. What about this case:
Mark was controlling and abusive to many women over the course of 30 years.
At least one of those women is now dead.
Others he doesn't have any idea how to get in touch with them.
Probably NONE of them ever want to see his face again.
What can Mark do to make up for what he's done? Maybe the best he can do under the circumstances is:
Donate to an abused women's shelter.
Make darn sure he treats women right in the future.
This Google case reminds me of the latter. Of 100 million people each have ten cents worth of compensation due to them, but you don't have the names and addresses for most of them, what do you do? How do you set that right? Donating to EFF and similar organizations might be part of that.
Even more difficult is something like this instance I talked to someone about the other day:
He had an affair with a married woman.
The affair ruined her marriage, broke her family apart.
Partially due to that, she committed suicide.
How does he even begin to try to set that right in any way?
He can't do anything for her - she's dead.
Her family darn sure doesn't want to hear from him.
He owes a large debt, but how does he pay it?
Good point about it being two steps. I can't say with certainty whether those steps were distinct or done at the same time in the settlements I was party to. In my recollection they were done at once, but if I'm being honest I must admit that it's entirely possible I'm mistaken and that they were actually distinct steps. I can't say with certainty.
And I'll readily agree that there are cases where there is no good outcome. Going back to my initial comment near the top of the thread, I threw those ideas out there, and I still stand by them, but I'll admit that I don't have a surefire way to actually implement them. We live in a broken, messy world where there aren't always clear answers or rules you can follow to reach the ideal outcome. While those harmed should be compensated for the harm done to them, there are situations where that's impossible.
there is always a well-known solution to every human problem â" neat, plausible, and wrong. :)
- HL Mencken