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

[Anubis IV]

If a lawsuit makes a company stop doing something bad to millions of people, isn't that a good thing?

Getting someone to stop engaging in illegal behavior is step one of setting things right. But there's also a step two: making reparations for harm done. That didn't happen here. Instead, the plaintiff's lawyers arranged for the settlement money to be funneled into groups to which they or their friends belong. Despite millions of people being harmed by Google's behavior, only the three named plaintiffs received even a cent.

Re:Not just money

[ShanghaiBill]

Just stopping a company from doing it AGAIN doesn't mean you get compensation for when it was done to YOU, which is what a class-action lawsuit should usually be about.

If class-action lawsuits don't make money for the lawyers, then they won't happen at all.

You should think of class-actions as an outsourcing of regulation to the private sector. If the government won't regulate corporate behavior, then profit-seeking law firms will.

Ask yourself this: Should we have more class actions, or fewer? Answer: I dunno.

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.