Yet Again, Netflix Class Action Shows That Class Action Lawsuits Are Mostly About Making Lawyers Rich

from the not-stopping-people dept

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For years, we've been pointing out that our class action lawsuit system is broken . It makes sense, in theory, that if a large group of people are wronged, they can team up to right that wrong—but in practice it has morphed into a system where a bunch of bottom-feeder lawyers sue just about any company at every opportunity... and then those lawyers end up taking the bulk of the money. The "class" (the people supposedly wronged) rarely get much, if any money at all. Of course, one of the first stories that clued me into all of this involved a settlement in a class action lawsuit against Netflix way back in 2005, in which the lawyers got $2.5 million... and everyone in the "class" just got their accounts upgraded for a month (and if you forgot to manually downgrade after that month was over, you were charged more). As I noted at the time, this seemed more like a promotional stunt for Netflixa way for a bunch of lawyers to make a ton of money.So it's interesting to see that with yet another class action lawsuit being settled involving Netflix, there are similar concerns. A whole bunch of folks sent in variations on the fact that Netflix will be paying out $9 million with a grand total of none of it going to the class (unless you happened to be one of the two named plaintiffs -- Jeff Milans and Peter Comstock -- who get to split $30,000). Most of the money is going to a charity. But somewhere around $2.25 million is going to the lawyers.To be clear, I think the lawsuit itself is a bit silly anyway. It involves the fact that Netflix retained info on customers who quit. Big whoop. But whether or not you agree with the premise of the lawsuit, the end result seems even sillier: those supposedly "harmed" get nothing, but the lawyers walk away with over $2 million? It's this kind of thing that creates incentives for more such lawsuits driven by law firms in the hopes of cashing in.

Filed Under: class action, lawsuits, lawyers, settlements

Companies: netflix