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 [email protected] 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.