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| waltman |
 Posted: Wed Nov 02, 2005 8:45 pm Post subject: Netflix lawsuit settlement details |
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Investing Sr. Associate
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Netflix lawsuit settlement details
Geektronica says: Netflix has settled a lawsuit with ... Frank Chavez, who spent $300 filing a suit complaining that you can't actually rent 'unlimited' DVDs from the company.
"Netflix apparently does throttle accounts that rent more than 12 DVDs a month, which they admit in their TOS. They do this so light users get priority over heavy users.
"The company is offering a one-month, one-disc free upgrade to all customers (which they will charge you for if you don't cancel after the month is over). Big w00t. Chavez got $2,000, and his lawyers got $2,528,000.
"Netflix fan reports, and NetflixSettlementSucks.com tells you how to opt out of the class. If more than 5% of members opt out, the decision will be invalidated." |
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| vetelmo |
| Posted: Sat Nov 05, 2005 7:01 am Post subject: |
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Moderator
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| How is it invalidated because of that? |
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| waltman |
| Posted: Sun Nov 06, 2005 2:10 pm Post subject: invalidating a class action settlement |
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Investing Sr. Associate
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The theory behind a class action suit is that if someone (say NetFlix) has ripped-off all its customers (say 1 million of them), and each and every one of them wanted to sue, the court system would crash under the weight of all those court cases.
So an enterprising law firm can petition to do a "Class-action" representing all the people affected, win the case for them, and just send them a check.
It's a good plan, and usually works well. Big companies know some lawyer will take the case cause they can make money off it.
Where the system falls apart is in a case like this-- Netflix agreed to some TOTALLY lame settlement (all its customers get a free one month upgrade, and then after the first month have to start paying for the upgrade unless they take action to "opt out"), and in exchange they can't get sued again for their "false" advertising in this case. The law firm in this case that started the lawsuit is going to get paid $2.5 million for their work on setting up the settlement. On the one hand they deserve to get compensated, even compensated highly because they took a big risk- they could have got nothing... On the other hand- $2.5 million to set up a settlement that is just a lame "upgrade with strings attached" that Netflix might have done on their own anyways as a marketing campaign.
If you are one of the affected people, you might say : "That's lame!! I don't want that deal. I want my day in court!!" you have to take some sort of action or the courts will presume you wanted to be part of the class-action and you were happy with what you got.
And if enough people say "This settlement is no good!!" the whole thing is thrown out, and everyone still has the right to sue Netflix one-by-one.
Practically what would happen is that Netflix would probably then offer a better deal for their customers than what they have so offered so far.
Hey -- It's the American Way!! |
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| vetelmo |
| Posted: Sun Nov 06, 2005 6:47 pm Post subject: |
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| SO I guess their hoping not enogh people will complain. lol |
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