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Permalink Reply by Mac Davis on June 15, 2009 at 7:46

KB wrote "no settlement can proceed without class notice and court approval."

Yes, but IMHO, the judges let a lot of settlements go by that clearly aren't in the class member's best interest.

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Permalink Reply by Mac Davis on June 15, 2009 at 14:11

That's weird. I typed up a detailed response, but hit a key and it vanished.

I or family or friends have been class members in several suits. I've also read the settlements on others.

My opinion of the settlements I consider bad:

The class members get a settlement that's a joke.
The lawyers get cash.
The defendants get protection from future lawsuits.

Example 1:

An automobile alleged to have a design defect that made it unusually likely to catch fire. A large number of deaths and injuries have occurred.

The settlement was something like a coupon for $500 off your next automobile purchase from the same manufacturer. The same kind of offer they make all the time for free. Nothing is done to fix the alleged defect.

Strangely enough, the lawyers got their contingency fee in cash.

The class members lose the right to sue over this defect in the future. You're stuck with the defective car. If it catches fire and your kids get burned and have millions of dollars of medical bills, you're out of luck. The resale value has gone down a lot because everyone thinks they're a death trap.

The class members were never consulted on whether they thought the settlement was fair. They did have the option to opt out of the class beforehand, but they had to take an affirmative action to opt out.

Example 2:

In another case against a cable company, the class members got something like 3 months free if they sign up for an additional service like digital phone, DVR, digital cable, etc. You had to sign up for the added service, and would get billed for it after the free period unless you cancel ahead of time. i.e. the same free trial offers they offer all the time to entice people to sign up for additional service.

Again, the lawyers got paid in cash, the "plaintiffs" got squat, and the "defendants" got off the hook.

I've seen several other settlements that were similar ripoffs to the class members.

Yes, the judge is supposed to look after the interests of the class members, but I've seen a lot of cases where the judge had to be asleep at the switch. They seem to be used to going along with anything that the "plaintiff" and "defendant" lawyers agree to.

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Permalink Reply by Mac Davis on June 15, 2009 at 14:22

How many class members know to do this? How many Joe sixpacks know they're going to get screwed unless they file documents opting out of a class-action lawsuit?

The company that did something wrong gets off the hook, the lawyers get money, and the class members get screwed. The judge participates in the fraud.

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Permalink Reply by Grillin' - MmmMmm on June 16, 2009 at 6:07

KB: These notices that you get are somewhat a bit much for a lot of people. As someone with a college education and 30-years of experience in business and investing, they aren't very difficult to comprehend. However, my mother with a high school education and 72 years of experience in the school of hard knocks takes one look at these and throws them in the trash. I'd rather these be "Opt OUT" as a default rather than the current Opt In as default. Should be that someone has to do something to be included.

The overwhelming majority of these suits I see are settled by a company to avoid the legal cost of defending themselves. Not the cost of the settlement, but the cost of paying lawyers to argue with lawyers, even if the company thinks/knows they are right. There is a high chance that even if they win the lawsuit, they have spent a ridiculous amount of money defending themselves, so they just write a check to pay off the blackmail and then admit no guilt. Just seems to be a money machine being cranked by law firms. And these costs get cranked into the cost of doing business and the price charged for a product or service. So in the end, the consumer pays.

If these are stock trading class action suits, I generally either opt out as I don't believe in the action, or I opt in and donate the money to either my favorite charity or my favorite politician who promises to push tort reform.

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Permalink Reply by Mac Davis on June 16, 2009 at 9:31

What is "escrayed?"

Permalink Reply by Grillin' - MmmMmm on June 17, 2009 at 1:32

KB: I partially agree with you on big corp's fighting lawsuits...the Exxon Valdez is a good example. However, in a former life I worked for another Big Oil/Big Gas company and we settled out a lot more that we fought. I sat through many decision reviews where we weighed the potential to lose, the amount we might lose, the cost to fight, put probabilities on all of it and ran through a statistical analysis to decide what we would do. We also used this model to determine how much to offer as a settlement. Sometimes you can't reach agreement and you just fight it. And sometimes, caving in on one case means you end up opening up others so that cost has to be factored in.

In some instances, there is an overwhelming drive to fight due to the size of the case. I think the Valdez case is a good example. Having talked to folks at XOM, the overwhelming feeling was that as a company, they did nothing wrong, they spent a lot of money fixing a problem that resulted from the accident, even though it was caused by one knucklehead who was violating their rules as well as the law. So, they fought it and fought it. They may still be fighting it as the recent ruling applied interest to the award. Don't know that they'll win that part, but I think their desire to fight the case came from a feeling that they weren't in the wrong. Fighting the interest payment is another kettle of fish since they have had use of the money for all this time! Plus, they are Exxon, and they tend to be a bit full of themselves! Other companies don't always fight to the end like they do.

I think the Chevron suit down in Ecuador will be one they fight to the end as again, there are feelings that they are in the right, regardless of the soft hearted attempt to make them look bad.

The Shell settlement with the Nigerian villagers was a case of get this over so we can stop paying lawyers and get back to business. I hoped they would take that one and get a ruling so that we can keep foreign issues out of our court system. But there just wasn't much to keep them in the case and paying off the plaintiffs was pretty low cost.

Permalink Reply by Mac Davis on June 17, 2009 at 8:00

"ewscrayed is pig lating for s c r e w e d."

KB, you said, "escrayed", not "ewscrayed." I figured it was a legal term I hadn't heard. I actually did think of pig latin, but "scred" didn't make sense.

It reminds me of the word, "Slattery". Sounds like something from a Monty Python courtroom sketch. "You've been found guilty of slattery, and I sentence you to be burned at the stake."

Permalink Reply by keb on June 16, 2009 at 13:21

WHO WON? IF TAWNEY, HOW MUCH?

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Permalink Reply by Bacon on June 16, 2009 at 9:00

Speaking of class action, anything going on with this?

http://www.stephensanderson.com/haynesville-shale.htm

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Permalink Reply by Mac Davis on June 16, 2009 at 9:50

The concept of a class-action suit is good.

Some class-action suits are very justified and handled well.

Unfortunately, the practice has often been twisted into something evil.

People playing lawsuit lottery, costing defendants unjust legal fees or ridiculous judgments.

Lawyers who file a class action suit for parties with a legitimate grievance, but make a "quick bucks" settlement, pocketing some easy cash, leaving their alleged "clients" screwed with no further legal rights, and no say in the settlement.

The quick settlement scam is so prevalent that I think it's become an unspoken conspiracy. Dewey, Cheatham, and Howe files a lawsuit against Greedco, Inc. Greedco knows it can get out from under its civil liabilities cheap by making a cheap settlement offer. DC&H takes the easy money rather than risk the effort and time to really pursue the case. Why not? Yes, DC&H could make a lot more money by really fighting the case, but that's in the future, and takes a lot of work. Maybe DC&H doesn't have a lot of resources and needs money now.

I'm not necessarily saying that they ever meet and discuss this, just that they mutually decide on the easy course of action.

Relevance to GHS

When the inevitable class-action lawsuits come up, how do the potential class members know whether to opt out?

I'm not saying they should opt out. How does Joe Sixpack know whether he should opt out?

To people who aren't professional paranoids like me, it seems like a no-brainer. "I just sit here, do nothing, and maybe I get some money in the future. It doesn't cost me anything." They don't realize that they're potentially giving up their right to money that is rightfully owed them.

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Permalink Reply by Mac Davis on June 17, 2009 at 8:03

Well, if or when the issue comes up, hopefully the public will be better informed on their choices than they were on signing leases. Maybe this site can help.

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