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(Wall Street Journal)   Class action settlement: $2.73M for the lawyers, $270K to be split between plaintiffs and charities. Some people seem to have a problem with that   (blogs.wsj.com) divider line 121
    More: Interesting, legal fees, Appeals Court, U.S. Court of Appeals, class-action  
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10722 clicks; posted to Main » on 07 Aug 2013 at 9:38 AM (51 weeks ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-08-07 12:17:07 PM

There is a well funded smear campaign against class action.  It may seem like grass-roots but it is Astro-turf..

DON'T MISS THE farkING POINT OF CLASS ACTION!!!.

Without class-actions, huge corporations can screw, say 50,000 people out of $100 each and no individual will sue... why would they pay a $250 filing fee to recover?  Even treble doesn't help here.

So consumer has no motivation to sue and corporation has a $50,000,000 motivation to screw consumers.  So how to prevent this?  Government regulation?  Who pays for that army of inspectors?  The government already inspects food and yet we still have mass outbreaks of food poising and safety recalls every few months for contaminated stuff that escaped in spite of the inspections... and these are just lazy people cutting corners on cleanliness... not a $50,000,000 paycheck.

As the mortgage fraud financial meltdown shows, we can't expect the government to actually bring criminal prosecutions against big business. Senators know who donates to their re-election campaigns and we just can't have those donors sitting in jail now can we?  So with criminal charges off the table that means the only counter-motivation is to sue in civil court.

The class action system is not perfect but it converts plaintiffs lawyers into bounty hunters by combining all those little damage amounts into one big amount.  Bounty hunters are even better than FBI agents or inspectors because they are not government employees with a union, nice salaries and expensive retirement packages.

So the class-action lawyers protect consumers by creating a actual financial consequence for a corporation's bad behavior... and it is a consequence not so easily avoided by bribing an inspector or congressman.  Is it any wonder the freaking Wall Street Journal would try to scare up oppositions to that?
 
2013-08-07 12:19:09 PM
I like the idea of reforming the class action lawsuit with the requirement that the money that was taken from the consumers goes back to the consumers on average (Average loss per consumer was $25? Everyone gets $25) and THEN you must pay the legal fees on top of that.

Right now, they are capped at the total amount that they defrauded, so if you take in $10M, you pay out $10M and the lawyers get to bite into that. That's not a penalty, neither is the requirement to change their ways. What will happen is the company will change the least amount of their ways to remain in compliance and then do something else to cut costs/generate revenue. The company comes out ahead in the long run because they were probably making good intereste on that $10M in the first place. I've heard (anecdotal) that some companies will do something like this with the cost of a class action built into whatever form of trickery they are using to get extra dollars.

If, however, you cheat your customers and you have to pay upto 90% additional to the claim amount, that wipes out any possible hope of salvaging something good from the cheating in the first place.
 
2013-08-07 12:35:56 PM

Theaetetus: Albert911emt: I was once unknowingly part of some class action concerning credit card fees or something. I got a check in the mail for 33 cents, and the damn lawyers got millions. And yet lawyers always insist that tort reform is unnecessary. F*ck them.

You got free money without having to do anything. I can understand why you're upset. It's because you're a moran.


You seem like a very pleasant person, except for the whole insulting someone for no reason part.....yeah, other than that, you're not at all a jerk.
 
2013-08-07 12:37:50 PM

Albert911emt: You seem like a very pleasant person, except for the whole insulting someone for no reason part.....yeah, other than that, you're not at all a jerk.


As someone who has met him in person - he is an asshole.  Doesn't make him wrong here of course.

/likes assholes.
 
2013-08-07 12:42:28 PM
Given that individual justice would be ridicuously expensive and people would always be out-lawyered by the big guys, what did you expect? The plaintiffs got more money back than they otherwise could, and the violator is punished.

So long as justice costs money, this is the best you're gonna get.

fark you ass-sitting complainers. All you did for the trial was not sign an opt-out. Take what you get and be glad the criminals were nailed.

Or would you rather stop these lawsuits, lose $10 in settlements, and let big guys get away with distributed crimes.
 
2013-08-07 12:43:29 PM
I have the chance to apply for $17 in a major class action suite.

to get the $17 I will have to document that I did indeed get overcharged might take me several hours and then mail the info to the lawyers.  but if they already know through discovery that I was ripped off, why do I need to spend money and time to prove it?
 
2013-08-07 12:45:27 PM
This Just In: Lawyers Make Big Money Off Of Other Peoples Problems. Film at 11
 
2013-08-07 12:56:04 PM
Pay...to the order of...Iron...Balls...McGinty...one dollar...and NINE CENTS!
 
2013-08-07 12:59:37 PM

max_pooper: 67stang: Albert911emt:

Gotcha beat. Once lost thousands in a fraudulent stock deal. I was part of a class action lawsuit. My split?  A check for Eleven (11!)   fricking cents.

So which is better? The law firm spends millions of dollars preparing the lawsuit, gets the judge to punish the wrong doers and gets compensated for their work or there is no class action lawsuit, the company goes unpunished, continues to defraud more investors and the lawyers make zero dollars?


Couldn't there be a third option that is somehow slightly more equitable to those who were wronged? I don't know what it might be but the current system punishes the company (good), pays most of the money to the lawyers (not good), and does nothing for those who were wronged (bad).
 
2013-08-07 01:00:08 PM
I remember being in some class action where a lady was bring suit against Honda because the odometer used in the Odyssey wasn't scientificly acurate (really? who knew?) and over the course of 20,000 miles might be off by 10 miles or so. Since this could cost you a couple of extra bucks on a lease, she was suing Honda, the makers of the instrument cluster, and some other group. The payout was something like 10 bucks for anyone who could show they had a lease, $10,000 for the class rep (the lady) and 2.7 million plus expenses for the lawyers.

I even opted out of the suit against Rockstar because of the 'hot coffee' mod. It was something along those lines. A couple of bucks toward your next R* game and millions for the lawyers. I opted out and sent a letter to the court saying it was stupid because the game had to be hacked to even get that content. There wasn't even a way to just put in a code. You had to download and run a program.
 
2013-08-07 01:27:34 PM

Jument: Couldn't there be a third option that is somehow slightly more equitable to those who were wronged? I don't know what it might be but the current system punishes the company (good), pays most of the money to the lawyers (not good), and does nothing for those who were wronged (bad).


Well here's the trick:

Litigation against large companies costs money.

So we have to allocate who pays that money:

1) Mandatory Fee Shifting We could, i suppose change the class action rules such that the recovery was for both the harm and the costs of suit.  This is in fact commonly done in Britain for solo litigation (basically the US is the only country that has class actions).*  So we would have, say Company X pay 10 million for the harm they caused and an addition 4.5 million for the cost of suit.  This is a do-able fix which would increase recoveries and keep the bounty system working.  However, since you would still have lawyers making millions (for legitimate work) and class members making, say, $100 (which is the actual amount they were harmed, but who cares) i figure the uninformed grumbling would continue.  And astroturfers like the WSJ would have even more reasons to be against it because companies would be forced to pay more.  So you can imagine the likelihood of new federal laws allowing this.

2) pay the lawyers less.This has the viceral thrill of making people who worked very hard, but get paid large sums suffer.  Which is fairly american.  The trick is, if someone told you you get to bust your ass for 1-2 years on a project and at the end of the day get paid way less than you would for any other project, and you had a choice, you would probably not take that job on.  Thus, paying lawyers less means less class actions which means corporate america gets the green light to fark you with your pants on, as long as the individual thrusts cost less than protesting in court by yourself.

3) federal enforcement.We could always just have a federal corps of class action attorneys.  They would enforce the law and the US treasury would get the payout.  This appears to have some upsides, as it buffers the fisc and we could ensure that as in option 1, the class members get more cash.  However, if you think people would fight increased penalties to companies, trust me they would lose their shiat if we suggested a massive increase in government oversight and costs to enforce.  because investigating, bringing suit, and of course, occasionally losing will all be covered by tax dollars.  Sometimes, enforcement can be value neutral, see Superfund as a good example.  But such programs that are neutral tend to be conservative in what they seek to enforce, carry draconian penalties (superfund liability assesses a pretty much automatic 3x damages), and are reviled by corporate america.

As a big ol' liberal i would be fine, to an extent, with #3, but it is less likley than any of the other options.

That's what i got.  The thing about class action law is it is supposed to be a compromise.  It is not the best answer in a perfect world, it just happens to be the best option out of the options we have.  Of course, i would be happy to hear other ideas on how to modify the system, if you have 'em.

/* there is fee shifting in some class actions.  Its just rather rare.
 
2013-08-07 01:45:21 PM
Back in the 80s there was a class action lawsuit against Bank of America.  Basically, they had been computing debits before credits so you could end up being overdrawn even though you had made a deposit, which resulted in an overdraft fee. This happened to me pretty much every pay day for months.

BoA lost, and in the mail I received a coupon good for discounts on BoA banking services.  I refuse to paricipate in any class action lawsuits because of this.

You couldn't pay me to bank with then now.
 
2013-08-07 01:47:39 PM

TheWhoppah: The government already inspects food and yet we still have mass outbreaks of food poising and safety recalls every few months for contaminated stuff that escaped in spite of the inspections.


Hate to burst your bubble, but the Federal government doesn't really inspect food.  Sure, they tax you to pay for an army of government employees, but that's just to shuffle paper around.  Actual inspection is mostly self-complience.
 
2013-08-07 02:02:35 PM

max_pooper: Fear the Clam: When I get a class action lawsuit thing in the mail, I do spend a moment figuring out how much I could get and how long it would take to fill in the form (and collect the required documentation). Then I toss the thing in the recycle bin.

Corporate America thanks you for your diligent efforts to allow them to go unpunished.


Considering how weak those punishments are I'm not filled with regret. Put the whole C-level suite against the wall for an actual execution like the Chinese do and maybe I'd care.
 
2013-08-07 02:18:23 PM

Teiritzamna: Albert911emt: You seem like a very pleasant person, except for the whole insulting someone for no reason part.....yeah, other than that, you're not at all a jerk.

As someone who has met him in person - he is an asshole.


www.motivationalmemo.com
I'll allow it.
 
2013-08-07 03:18:08 PM

Teiritzamna: Oh right! The lawyers seeking to punish Comapny X! If only they let them keep on screwing consumers, they wouldn't "need" to raise prices to pay for it!


A company isn't a person, it's very tough to actually 'punish' one.

I should have been more clear.  I've been mailed forms for a few class action lawsuits that were for such low sums I was like 'why bother' and also things like 'I thought the price was fair at the time'.

If you're only going to make a token effort at making me whole (1% of the loss, really?), for something that's questionable on whether it was wrong in the first place(hot coffee mod, anyone?), in such a way that you're charging such huge lawyer's fees that the company will be visibly harmed, I question the worth.

Though when a company obviously does wrong, I support the lawyer's fees coming out of punitive damages(IE any above actual harm), with the claimants getting ACTUAL losses back.
 
2013-08-07 03:29:14 PM

Firethorn: Teiritzamna: Oh right! The lawyers seeking to punish Comapny X! If only they let them keep on screwing consumers, they wouldn't "need" to raise prices to pay for it!

A company isn't a person, it's very tough to actually 'punish' one.


A company is a conglomeration of people seeking to make money.  Some of those people make poor decisions, others support those decisions, either actively or passively.  One great way to stop them from making poor decisions is to cost them money.  This will stop the decision makers either because the loss of money hurts their pocketbook, or it hurts someone else's pocketbook and they get fired.  Groups of people can be punished/deterred just as well as individual people.

If you're only going to make a token effort at making me whole (1% of the loss, really?), for something that's questionable on whether it was wrong in the first place(hot coffee mod, anyone?), in such a way that you're charging such huge lawyer's fees that the company will be visibly harmed, I question the worth.

This seems to be your argument against frivolous suits.  No argument here.Frivolous suits suck.  Of course outside of the rare obvious "wait what!?" suits,* truly frivolous class actions are actually rare, as the guys bringing suit eat the costs if they lose.

Though when a company obviously does wrong, I support the lawyer's fees coming out of punitive damages(IE any above actual harm), with the claimants getting ACTUAL losses back.

As i noted above, having some sort of mandatory fee shifting to pay for a class action suit would be A-Ok in my book.  It will never get past conservatives in congress, of course, as corporate donors who tend to get sued dont like new laws that would require them to pay an extra 30-40% for each lawsuit.
 
2013-08-07 03:47:06 PM
Okay, Libertarianmitter.

W/O the class action suit, the company would walk away with the profits from screwing over consumers.  Boy, what a great alternative.

We ~could~ serve consumers much better by like, say, actually regulating companies and minimizing these legal issues from every occurring, and bymaking their books more transparent so it's easier to get to the bottom of things if these legal issues actually do occur.... but the same people crying about TFA's outcome are usually the same people (COUGHlibertariansCOUGH) that insist regulation is bad and that legal fictions deserve civil rights protections originally intended for human beings.

/law firms suck up so much of that payout because the offenders' lawyers do everything they can to shield their business clients' books
//nothing libertarians love more than crying about conundrums of their own creation and blaming others
 
2013-08-07 04:01:21 PM

gameshowhost: Okay, Libertarianmitter.

W/O the class action suit, the company would walk away with the profits from screwing over consumers.  Boy, what a great alternative.

We ~could~ serve consumers much better by like, say, actually regulating companies and minimizing these legal issues from every occurring, and bymaking their books more transparent so it's easier to get to the bottom of things if these legal issues actually do occur.... but the same people crying about TFA's outcome are usually the same people (COUGHlibertariansCOUGH) that insist regulation is bad and that legal fictions deserve civil rights protections originally intended for human beings.

/law firms suck up so much of that payout because the offenders' lawyers do everything they can to shield their business clients' books
//nothing libertarians love more than crying about conundrums of their own creation and blaming others


It's not regulations are bad.  It's EXCESSIVE regulations are bad, especially when the regulations are really designed to protect the established businesses from competition and the consequences of their actions.
 
2013-08-07 07:26:14 PM

Fluid: Appeals Court Says Legal Fees in Diaper Suit are Ir-rashional

Had to read that headline twice before it sunk in "diaper suit" didn't refer to some kind of horrible fashion experiment. Need more coffee, I guess.


yeah, I looked at that headline and figured a farker was working at the WSJ.
 
2013-08-07 08:36:32 PM
"Billable hours" is such a poisonous phrase.

Unless you're in a job of some sort of field repair, be it plumbing, computering, whatever.
 
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