Saturday, October 9, 2010

The class action settlement rip-off

You may have been one of the millions of people to receive a settlement notice regarding a class action against; the settlement notice implied that class members would receive $9.5 million (though only $2-$3 per person, and that mostly in coupons) and the attorneys would ask for $1.3 million.

You then probably received a supplemental notice saying that the attorneys were generously only asking for $1.05 million, and that, if you sent four letters to four different addresses, you could object to the fee request.

You probably didn't object: it's hardly worth your time to spend $1.76 in postage over a $2 or $3 settlement.

What you won't see on either of the settlement notices or the settlement website is how much the class is actually recovering: out of millions of class members, there were fewer than 50,000 claims made. The class will receive only $117,374 (see page 4 of PDF). The attorneys are asking for a 895% contingency fee.

Professor Michael Krauss of George Mason Law School will be objecting to the fee award (and an attempt to rip off the class by diverting $500,000 to an unrelated charity instead of to class members); the Center for Class Action Fairness is proud to represent him.

The fact that an Internet company didn't make it possible to object over email is just an attempt to limit the number of objections. But CCAF is willing to help: we won't represent you, but if you submit a conforming objection to me over email to in a pdf by November 15, CCAF will do the mailing for you. Here is an MS Word document to make the process easier; fill in the blanks, keep or delete or add to the paragraphs as you see fit, sign, scan, e-mail (or mail yourself to the addresses indicated). (CCAF is not your attorney if you choose to have us mail your objection for you; we reserve the right not to mail any pdf that is offensive or seems to be fake.)

The trial lawyers are arguing that the low number of objections means that this is a good settlement. That's clearly false given how hard they made it to object and the fact that class members weren't told the full truth about how bad the settlement was, but let's try to take away that argument by sending the court a few dozen more objections. And tell your friends.

Note that the class attorneys in this case are Kabateck Brown Kellner, who were the attorneys in the $0 AOL Footer settlement; in that case, they took the position that it was okay to hide conflicts of interest to the court and to the class in a class notice. So we're not just objecting, we're asking for the discovery that KBK said we should have done in the AOL case.

Update, September 4: Google is leading lots of people to this page, but this post is referring to a 2010 settlement, which we successfully objected to. If you came to this page from a search engine, you are probably looking for the revised 2011 settlement.


  1. WTF next, so much time wasted on BS.......but I think they got my money once or twice.....the net, it catches so many, so often

  2. I am Canadian so apparently I don't count even though I got the class action settlement notice.

    I wonder how many other Canadians are likewise being shown the door over this? We pay the same fees as anyone else.

    Oh well ...

  3. This whole thing is ridiculous. Why is it that trial lawyers can before this kind of banditry and no one calls them on it? Clearly, this case was about nothing except the legal fees they would extract from the idiotic web site. It has nothing to do with consumer protection or redress. Seriously, who would even bother trying to collect the $3.00 and who in their right minds would use a $2.00 coupon to spend on the garbage foisted off by

    On second thought, and the lawyers deserve each other. Leave the innocent consumers out of it.

  4. It's so sad that a company can become such a target. is considered the precursor to Facebook. Again, someone had an idea, took a risk and it was a big hit. Then the lawyers found a way to get in on the action. If we don't find a way to limit risks to entrepreneurs we will have fewer people taking the risks and creating jobs. Then what makes our country so great will not exist anymore. Recently I read about a summit coming up in Atlanta on 11/30 that will address issues of over-regulation and end out-of-control liability risks that act as barriers to free enterprise; which is what makes America so exceptional. The summit is hosted by the Foundation of Fair Civil Justice, NACD Directorship Magazine and Salem Radio Network. Free Enterprise supporters including John Ratzenberger, Gov. Tim Pawlenty and radio host Hugh Hewitt, among others will be speaking.

  5. I thought it was possible to object via e-mail. In fact, I sent the following objection to

    To whom it may concern,

    I object to the settlement in the class action, Case No. 09-45RAJ. For the reasons spelled out in more detail in the article at, such settlements are a scam. They recover settlements for class members that are not worth taking the time to claim. But if a claim is not filed, the class member's rights are extinguished. It's a collusive arrangement between class counsel, who are awarded millions for doing very little work, most of it of the cookie cutter variety. The defendant gets rid of a large number of potential claims. And the class members get the shaft. I used to defend such class actions as an attorney, so I know how it works. If the court approves the settlement, I hope that class counsel will not get a fee award until all of the settlement funds are distributed. At that time, the award should be limited to 30% of the sum actually paid to class members, a normal and fair contingency feed.

    Very truly,

    /s Louis W. Hensler III
    Professor of Law
    Regent University School of Law
    1000 Regent University Drive
    Virginia Beach, VA 23456


    The article that I referenced in the body of my e-mail can also be found at