Yahoo Class Action: $4M For Lawyers, $0 For Users

Unfamiliar with the way class action lawsuits work? Here's a perfect example of how they can go wrong in a hurry. Since this is still subject to the court's approval, there is still a slim chance things might change.

Last week, they asked US District Judge Lucy Koh to accept a proposed settlement (PDF). Under the proposal, the massive class of non-Yahoo users won't get any payment, but the class lawyers at Girard Gibbs and Kaplan Fox intend to ask for up to $4 million in fees. (The ultimate amount of fees will be up to the judge, but Yahoo has agreed not to oppose any fee request up to $4 million.)

Lawyers always win even if they lost the case.

When people understand that class action lawsuits only make money for lawyers.

I don't really understand why people complain about this aspect about class actions. The entire reason to bring a class action is that it is not worth bringing the cases individually. That means you would have gotten exactly zero dollars regardless.

Does this stand out since it's $0 for the class? Sure, but is that really different than if everyone got $3.43? The entire point of class actions is to punish the company ($4M is still $4M, whether it goes to lawyers or 100 class members).

Does it really cost lawyers that much? I didn't say class action is not good. However, people should refuse class actions, 'till all these lawyers stop blood sucking everything.

rhouck said:

I don't really understand why people complain about this aspect about class actions. The entire reason to bring a class action is that it is not worth bringing the cases individually. That means you would have gotten exactly zero dollars regardless.

Does this stand out since it's $0 for the class? Sure, but is that really different than if everyone got $3.43? The entire point of class actions is to punish the company ($4M is still $4M, whether it goes to lawyers or 100 class members).

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Lawyers always win. Always.

But my thought process with class-action lawsuits is we win in principle. In some ways, it is priceless if it is deemed beneficial for everyone. Which helps sets tones for overall better regulations for every company. But that's just me. Your mileage my vary.

MDboyz said:

When people understand that class action lawsuits only make money for lawyers.

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When will people understand that class action lawsuits are more about getting a company to change its ways and less about being a pay day for those who were wronged.

sfsuphysics said:

When will people understand that class action lawsuits are more about getting a company to change its ways and less about being a pay day for those who were wronged.

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Except in this case. Where Yahoo gets to continue doing what it's doing and then has to pay these lawyers up to $4 mil.

krotch said:

Except in this case. Where Yahoo gets to continue doing what it's doing and then has to pay these lawyers up to $4 mil.

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Except before what Yahoo was doing was unclear to the users ... Now it will be clearer and above board ... so yes, Yahoo did change something

This is one of the advantages of the European system of the government suing the companies ... the companies almost always get leveled with a big fine (as well as the lawyer payday) ... governments are much less compromising about getting their payday, than regular customers are

kbrickley said:

Except before what Yahoo was doing was unclear to the users ... Now it will be clearer and above board ... so yes, Yahoo did change something

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Not really. What the lawsuit was all about.

"Yahoo was hit with six lawsuits over its practice of using automated scans of e-mail to produce targeted ads. The cases, which were consolidated in federal court, all argued that the privacy rights of non-Yahoo users, who "did not consent to Yahoo's interception and scanning of their emails," were being violated by a multi-billion dollar company."

The only thing that is happening is Yahoo came out and said, "Yes, we're doing it. Suck it up, we're going to continue doing it", then they pay some lawyers a lot of money.

Nothing gets fixed for the whole privacy rights, which was what it was all about.

This country has a boat-load of lawyers and we're churning out a ton more of them every year. Those guys (and gals) can't all get jobs doing real work, so they have to create their own paydays using crap like class-action suits.

http://www.examiner.com/article/more-lawyers-than-doctors-more-lawyers-than-soldiers

MDboyz said:

When people understand that class action lawsuits only make money for lawyers.

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That is true, but this misunderstands the purpose of a class action lawsuit.

The real justification for them is that they allow lawsuits to be brought that otherwise would not have been able to be brought on an individual basis, due to the small sums involved, and the cost of litigation.

But what is the purpose - one might ask - if the class members receive little to none of the settlement?

Well, the answer is its not abiut the individual, but rather the societal good. The societal argument in favor of class action lawsuits existence is not really to bring any meaningful restitution to the class, but rather to present a financial cost to companies doing things they shouldn't, so they and others think twice next time.

The payout to lawfirms who put in tons of billable hours into these things is - unfortunately - necessary, as if it weren't there, they likely wouldn't take up the case, and the cost to businesses of doing things they shouldn't would never be there.

The sums paid out to law firms seem excessive until you realize how many hours they put in to something like this, and that even the absolutely cheapest lawyers bill some $200 per hour, which covers not just the lawyers salary, but also pays for paralegals, clerks, fees, office space, etc. etc.

Seeing how lopsided these things are, it is tempting to ask for some legislation that would prevent the legal teams settlement from being larger than the settlement any individual member of the class receives, but the unintended side effect of this would be that most of these cases would never be brought, and thus the businesses in the wrong would never have to pay for their wrongdoing, and would have no motivation to do the right thing, and would just continue their shady practices.

So, not a great situation, but there is a good reason it is the way it is, and it DOES help keep businesses on the straight and narrow, with consequences for their actions.

that is if you can even put up a class action against them. Lawyers in WV tried to class action against Frontier for bad contracting practices with their internet. The state wouldn't even allow it to go through at all because Frontier has an arbitration clause in the contract so no one can actually take them to court for stuff unless they really really try and pay lots of money.

WV is Frontiers bitch...They can't be touched here.

Bigbacon said:

that is if you can even put up a class action against them. Lawyers in WV tried to class action against Frontier for bad contracting practices with their internet. The state wouldn't even allow it to go through at all because Frontier has an arbitration clause in the contract so no one can actually take them to court for stuff unless they really really try and pay lots of money.

WV is Frontiers bitch...They can't be touched here.

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One of these days one of these arbitration clauses is going to make its way up to the Supreme Court and get thrown out. It's only a matter of time.

It doesn't surprise me in the slightest that elected judges in a state that has some pretty far right politics, would side with big business right off the bat.

This is why judges should never be elected. Justice by the ballot box would have our founding fathers rotating in their graves.

sfsuphysics said:

When will people understand that class action lawsuits are more about getting a company to change its ways and less about being a pay day for those who were wronged.

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When will people understand that class action lawsuits are more about enriching lawyers than protecting consumers.

There should be a law than any class action lawsuit must result in at least 50% of the money going to the affected consumers (not the lawyers)

All lawsuits are primarily about making money for lawyers. Not just class action lawsuits.

Zarathustra[H];1042084024 said:

One of these days one of these arbitration clauses is going to make its way up to the Supreme Court and get thrown out. It's only a matter of time.

It doesn't surprise me in the slightest that elected judges in a state that has some pretty far right politics, would side with big business right off the bat.

This is why judges should never be elected. Justice by the ballot box would have our founding fathers rotating in their graves.

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One of them did and the Supreme Court already said it was A-OK. AT&T v. Concepción. One of the most important consumer rights cases that no one has ever heard of.

rhouck said:

I don't really understand why people complain about this aspect about class actions. The entire reason to bring a class action is that it is not worth bringing the cases individually. That means you would have gotten exactly zero dollars regardless.

Does this stand out since it's $0 for the class? Sure, but is that really different than if everyone got $3.43? The entire point of class actions is to punish the company ($4M is still $4M, whether it goes to lawyers or 100 class members).

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Um no.

The reason for a class action is that individually the plaintiffs have no chance of winning against a large business. It's a mechanism that allows a large group of people who have been wronged to band together as a group in order to see the wrong addressed. It has nothing at all to do with how much you might gain in damages.