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.

Comments

Not just money

[MrLogic17]

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...

Re:Not just money

[ShanghaiBill]

The lawyers can keep up to 1% for their expenses.

This is effectively an abolition of class action lawsuits.

Law firms are businesses, not charities.

Lawyers will get nothing. Harmed consumers will get nothing. Corporations will have impunity.

Class Action is like Obamacare

[rsilvergun]

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.

Re:Simple solution

[jpaine619]

The settlement's payouts included a $5,000 award for each of the three named plaintiffs.......The remaining $5.3 million was divvied up among six universities and organizations pledging to put the money towards improving internet privacy.

I.e. the 3 regular people who actually were involved in this case did get something. All of the other "class members" did nothing. Well, they probably filled out an online form.. But that was the extent of their involvement (most likely).

It's not like the lawyers walked away with most of the money. Looks like they took about 30%, which is a very standard practice. I think we can safely assume none of you fuckers has the resources (deep pockets) to sue GOOGLE.. So if you want to limit the lawyers to 10% (which is a shitty return on a labor intensive investment) who are you going to find who has the ability to fund lawsuits against mega corporations?

As has been previously pointed out.. These lawsuits are about correcting bad practices. The lawyers do ALL the work, they front ALL of the costs, and they take on ALL of the risks....

Look, I hate lawyers as much as anyone.. But sometimes they are a necessary evil. If they are going to front 100% of the risk, I don't have a problem with them collecting 33% of the payout.

Would you share profits with a business partner who did zero work and invested zero money? Of course you wouldn't...

Well, that's what most class action lawsuits are like.. 99% of the class members fill out a form and do absolutely nothing else. They risk nothing besides their ability to sue, independently, later..

Lastly... A constitutional amendment? WTF? Why wouldn't you just ask for a federal law? You want to clutter up that document with bullshit like payout ratios?

If you started a business and took all the risk, fronted all the capital, and did all the work, would you want to be limited, by law, to 10% profit margin?