RSSNetflix Settles Class Action Lawsuit
By Nate Mook | Published 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.
"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?
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|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.
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|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.
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|FYI: Here's a copy of the email Netflix sent out to all thier users: http://theglobalbible.com/temp/netflix_email.php
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|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.)
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|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.
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|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.
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|I choose to opt out.... I have no problem with my turn around time or the amount of movies that I receive.
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|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.
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|I agree with that.
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|You sound like a true consumer advocate there, Sparky.
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|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".
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|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.
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|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.
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