Monday, July 30, 2012

Something's Wrong with our Legal System

Today I got notification that I'm part of a class identified in a class action lawsuit against Netflix.  Settlement of the suit is that Netflix will put $9 million into a fund (awesome!), to:

  • Make donations to Court-approved not-for-profit organizations, institutions, or programs.
  • Pay notice and settlement administration expenses.
  • Pay attorneys’ fees of up to 25% or $2.25 million of the Settlement Fund, plus up to $25,000 in expenses.
  • Pay a total incentive award of $30,000 to the Named Plaintiffs.
Wait, what?  Let's look again:

First, the settlement fund will be used for "Court-approved not-for-profit" stuff.  OK, that's nice.  (Actually, that's not "first" - that's "last," after all the other settlement things have been paid.)

Second, it will pay for notice and settlement admin expenses (makes sense).

Third, the attorneys doing this will get $2.25 million (25% of the settlement amount), plus $25k in expenses.  (Yeah, it says "up to" - but you know that receipt will be for $25,000.00.)

Fourth, the "Named Plaintiffs" will get an incentive award of $30k.

So, of the $9 million, the lawyers are getting 25% of it, or $2.25 million, and then get their expenses paid on top of that for up to another $25k.  How'd you like to be part of that group, suing Netflix and splitting well over 2 million bucks?  The "named plaintiffs" (according to the actual settlement agreement) are the six individuals who initially brought the suit.  Again, not bad - they each get $5k for, essentially, hiring the lawyers.  But, of the $9 million, the plaintiffs are receiving 1/3 of one percent.

And what about the class members?  The ones allegedly harmed by Netflix?  Zip.  Nada.  Nothing.  That's right - of the $9 million settlement in a lawsuit claiming rights were infringed (privacy rights, no less), those whose rights were infringed get absolutely nothing.

In fact, I'd wager that the suit will actually cost those who were infringed, as the rates may end up increasing due to the extra cost associated with the settlement.  How's that for fair?