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Netflix Settles Class Action Lawsuit

By Nate Mook, BetaNews

November 2, 2005, 12:13 PM

Netflix has settled class action lawsuit brought against the company last year for allegedly duping potential customers by advertising "unlimited" DVD rentals and "one day delivery." Current and former Netflix customers will receive a one-month perk, but the real winners of the settlement are the lawyers.

While not admitting any wrongdoing, Netflix will provide customers with a one-month service level upgrade free of charge. This means that Netflix users subscribed to the 3 DVDs at-a-time program will be upgraded to 4 DVDs at-a-time for one month. After the free month, customers must remember to downgrade their service manually or face higher fees.

Former customers who were Netflix members prior to January 15, 2005 will receive a free month of service if they subscribe to Netflix once again. The membership and monthly charges will continue on a monthly basis after the initial month.

To receive any benefit, eligible customers must complete an online registration before February 17, 2006. Those who wish to opt-out of the settlement must send a notice by December 28, 2005. A final hearing is scheduled for January 18, 2006 to determine if the awards are fair.

The plaintiff in the case, Frank Chavez, will receive $2,000 for his time and efforts, while Chavez's attorneys Adam Gutride and Seth Safier reap most of the benefits from the settlement agreement.

Netflix will pay the two San Francisco attorneys $2,528,000 in legal fees and other costs. Netflix is also paying for all of the costs involved in the settlement, including notifying customers and providing the benefits. The attorneys' fees will be considered and paid separately from the class action award.

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By jcaldwel10247

edited Apr 5, 2008 - 11:13 AM

Netflix got a slap on the wrist from that lawsuit, nothing more. The penalty they received was to offer everyone who was involved a free months subscription, big deal. Meanwhile, they will continue with business as usual controlling the flow of movies to three at a time customers so they don’t get more than 8 -10 titles a month. They are in breach of contract with this approach to rentals and no one is going to prevent them from doing it. I’m joining blockbuster to give my support to them now that Netflix is trying to sue them out of the postal rental market. By the way, it has now been discovered through their attempt to sue Blockbuster, that Netflix has been in violation of federal anti-trust laws for sometime. That brings it to an all new level, now they are in trouble with the feds. Less than a half hour ago I had enough of Netflix bs and told them by phone what they can go do with themselves.

Score: 0

By markell63

posted Sep 13, 2007 - 9:41 PM

13 September 2007

When is enough truly enough? Netflex is playing the same old throttling game; this time with a new twist. I have been a member of Netflex for about twenty months now. In the pass couple months I have noticed that my movies sections have started to be shipped from out of state shipping locations; instead of the one only seventy miles from my home. The result of this, it now takes from four to seven days from the time the movie shows in my queue until I receive the movie at my home. This is a blatant breach of contract.
With all the troubles Nexflex has dealt with in regards to this same matter, it's appalling that this behavior still continues. What, if anything, can I do at this point to rectify this situation?

Score: 0

By markell63

edited Sep 13, 2007 - 9:18 PM

13 September 2007

When is enough truly enough? Netflex is playing the same old game. I have been a member of Netflex for about twenty months now. In the pass couple months I have noticed that my movies sections have started to be shipped from out of state shipping locations; instead of the one only seventy miles from my home. The result of this, it now takes from 4 to seven days from the time the movie shows in my queue until I receive the movie at my home. This is a blatant breach of contract.
With all the troubles Nexflex has dealt with in regards to this same matter, it's appalling that this behavior still continues. What, if anything, can I do at this point to rectify this situation?

Score: 0

By eagle5184

posted Jan 5, 2007 - 10:00 AM

Following up on my comment about Netflix putting a hold of 10.99 on my bank account after I had withdrawn my application and never completed it,not authorizing them to do this,causing an overdraft fee.thye are refusing to contact me and will not follow up on emails i have sent .They sent an automated respones they got them.I have tried the 800 #'s only to be put on hold 20-30 min.I need someone to tell me out to get in touch with them

Score: 0

By eagle5184

edited Jan 5, 2007 - 9:55 AM

I recently tried to register for net flix online there was a problem with the address i wanted movies sent to so I did not completethe process.thinking i wiped out all credit card info.seems as tho it went in anyway and netflix placed a hold for 10.99 on my checking account with out my approval and even knowldge.this resulted in a 33.00 overdraft fee.I am trying to get this refunded and will file lawsuit against Netflix for fraud and embezzlement of my account.Even tho no money was taken by them It caused me to have a overdraft.and I was not told of this.A local tv station that has a buyer beware segment will air this grievence also should they not reimburse me.Netflix has noright to go into a persons account and debit or place any amount of money on hold.this matter is being turned over also to the Sc consumer affairs and state attorney generals office for investgation.Maybe Netflix needs to think about another line of business

Score: 0

By Len6789

edited May 31, 2006 - 3:35 PM

=================================
L e o n a r d J . B o u r r e t
4 0 - B P a s c a l L a n e
M a n c h e s t e r , C T 0 6 0 4 0 - 4 6 2 6
P h o n e : ( 8 6 0 ) 6 4 7 - 9 6 0 6
e - M a i l : Len9876@juno.com
=================================

May 31, 2006

San Francisco Superior Court
400 McAllister Street
San Francisco, CA 94102-4512

Dear Clerk of the Court:

Re: Class-Action Lawsuit - Chavez vs. Netflix, Incorporated (Case #CGC-04-434884) - On
09/23/2004, the aforementioned class-action lawsuit was filed, alleging that Netflix failed to
provide "unlimited" DVD rentals and "one-day delivery," as promised, in Netflix marketing
materials. Netflix has denied any wrongdoing or liability. The parties have reached, and the
Court has approved, a settlement that they believe is in the best interests of each of the Class
Members. Under the terms of the amended settlement, Netflix will provide each and every
eligible subscriber with the following benefit:

Option 1: Sign Up for One Month of Free Membership, or Free Upgraded Service, as
Part of the Settlement. To receive the benefit, I, as a Class Member and eligible
subscriber, must complete the Netflix online registration process no later than
06/26/2006, at www.netflix.com/settlement. By signing up the benefit, I, as a
Class Member and eligible subscriber, waive my right to bring a separate
lawsuit against Netflix concerning the Claims Released By The Class (as
defined in the Settlement Agreement found at www.netflix.com/settlement).

As a Class Member and eligible subscriber, I do not waive my right to bring a separate lawsuit
against Netflix. Furthermore, Netflix has failed to provide "unlimited" DVD rentals and "one-
day delivery," as promised, in its marketing materials. In fact, Netflix sometimes takes as long
as five to seven days to deliver one DVD. Please advise, and thank you.

Awaiting Your Reply,

Leonard J. Bourret

Copy: Blockbuster Corporate Headquarters, 1201 Elm Street, Dallas, TX 75270-2102

Score: 0

By Freddd

edited May 7, 2006 - 1:54 PM

Follow The bank account(s) of Frank Chavez.After the dust settles,he will get a kick back.FOLLOW THE MONEY.

Score: 0

By tjbullard

edited Feb 14, 2006 - 9:45 AM

I didn't know anything about the lawsuit until yesterday -- I can't even get onto my Netflix account because, no matter how I approach it, I keep getting: entryTrap.html?why=cookieless#ready_to_try This has been going on for at least 2 weeks. Nothing about my computer has changed -- I do have cookies. Any ideas? I won't be able to downgrade from the "free" month. I haven't had any problems with Netflix before...

Score: 0

By NickDecember18

edited Nov 8, 2005 - 3:16 PM

"Netflix will pay the two San Francisco attorneys $2,528,000 in legal fees and other costs."

Frank Chavez went through all this mess so he could get money for these two lawyers, I'm sorry Mr. Chavez, but you just lost...AGAIN!

So people, next time when you get a lawyer, work out the money, dont let them cheat you! Lawyers should not be getting 110 percent of the money while you get 10 cent.

I'm sueing Netflix next month for keep on sending me broken DVDs...ooppss...I already signed up for the free month. Maybe Blockbuster?

Score: 0

By fewt

posted Nov 2, 2005 - 8:45 PM

Interesting, the reason I stopped using Netflix recently was because it went from getting DVDs in 1-2 days after ordering to 6-8. In some cases they claimed to be shipped and didn't show up for two weeks.

Score: 0

By drumcat

posted Nov 2, 2005 - 8:14 PM

Look; the fair thing to do would be to cut a check for $5 to former subscribers, and credit remaining customers for $5. Let them do what they want with it.

Class action lawsuits that simply hand out more product are usually counterproductive. I sure don't know what the $2.5m was for, and I'm not here to say it's too much. But for a customer, the simple fact is that the onus should not be placed on the customer to act; rather the company should have to act. Make them pass out the credit, or the money. What should have happened is everyone gets $4 or whatever in credit on their next bill, unless they ask for the check. What's wrong with that? A free movie is letting them off the hook.

Score: 0

By se7en11

posted Nov 2, 2005 - 3:57 PM

FYI: Here's a copy of the email Netflix sent out to all thier users: http://theglobalbible.com/temp/netflix_email.php

Score: 0

By bourgeoisdude

posted Nov 2, 2005 - 1:57 PM

This is why the US legal system doesn't work. Lawyers are 'compensated' for frivilous lawsuits and legit ones like this one. The lawsuit is fine for the plantif, but as the article says, the lawyers are the winners, and are $2,528,000 richer (granted some is compensation, but how can lawyer's fees cost ONE THOUSAND TIMES more than the money in damages? I think I'll sue JCPenny for not granting the "buy one, get one at half price" deal, win the $50 I was cheated out of and JCPenny will pay $2.5 million to pay my greedy lawyers.)

Score: 0

By kgruber

posted Nov 3, 2005 - 12:15 AM

It is a mischaracterization to say that lawyers are earning free money and that the settlement lawyers are "winners." There's alot of man hours and labor that go into class-action suits. Attorney's fees have to be fair, reasonable and justified. Furthermore, these type of lawsuits are often necessary to reform bad business practices.

Score: 0

By Vincentf

edited Nov 7, 2005 - 4:24 PM

Don't buy the story about all the man hours that were put in by the poor attorneys to represent the "little guy". Why don't you tell us what their hourly rate was in computing their attorney's fees? I'm an attorney, and this kind of behavior is what gives lawyers a bad name, and rightly so. They get rich, and we get nothing.

Score: 0

By dtanderson

posted Nov 2, 2005 - 1:24 PM

I choose to opt out.... I have no problem with my turn around time or the amount of movies that I receive.

Score: 0

By Neoprimal

posted Nov 2, 2005 - 1:19 PM

You'd have to be a complete moron to not realize that you're getting DVDs 4 at a time instead of 3 at a time. Likewise, you'd also have to be a fool and not a responsible shopper if you didn't notice more money on your bill. Then, you'd have to be a COMPLETE idiot to not know how to take instructions....
ONE free month - CANCEL - or - get CHARGED.

So in conclusion, you'd have to be some kind of beavis and butthead, peter griffin type level of stupid to complain about this decision.

It's a fair decision.

Score: 0

By httpd.confused

posted Nov 2, 2005 - 7:29 PM

You sound like a true consumer advocate there, Sparky.

Score: 0

By gawd21

posted Nov 2, 2005 - 1:51 PM

I agree with that.

Score: 0

By drumcat

posted Nov 2, 2005 - 1:12 PM

This is a sham. They bump you up a level of service for a month at a reduced rate, and then the next month you have to change back or get charged? What kind of crap is that? That sounds like forced marketing to me. Netflix will make money on this deal -- imagine how many people won't see the extra $3-$5 on their credit cards right away!

I'm opting out. That's a joke. It's a trap, it's disingenuous, and it's a sad decision for a judge and attorneys "fighting for consumers".

Score: 0

By tslendinga

edited Nov 2, 2005 - 3:48 PM

I think calling it a sham is a bit much. You have to sign up for the extra disk. I just did that. It is going to be my falt if I don't adjust my service back to what it had been before. But the e-mail Netflix set out is pretty clear about what you need to do. I think you would have to be a fool if your a member and don't take the free disk. I also think you would be a fool if you sign back up just for the free month. Now that is what I think is a load of crap. That is totally a trap to get you back on the books. You should be able to get a check for 20 bucks, rather then have to sign back up.

Score: 0

By nyckidd

posted Nov 3, 2005 - 10:20 AM

As a former member that cancelled my membership well over 2 years ago, I was surprised to see email from netflix yesterday.

After reading through it a 2nd time, I noticed the domain for signing up was something other than netflix.com, and I began thinking that this was some clever phishing attempt. I then looked at the raw message data, to find that the email originated from mx-mktg.netflix.com.

Ok, so I checked it out further and it was legit , but then realizing that I'd actually have to sign up for their service again to get the free month, it seems appropriate that the email originated from an address with marketing in its name. Honestly, don't you already get a free trial period when you join? Where exactly is the benefit here? Am I supposed to trust that they will be cooperative when I try to cancel 30 days after I join? And why do I get the burden of having to remember to cancel?

This whole thing smacks of a marketing campaign to try to snag former members into coming back.

Score: 0

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