Kurt R.A. Giambastiani

When you hear the phrase “class action lawsuit” you probably think Big Tobacco or (if you’re lucky) Erin Brockovich. You probably even get a “David and Goliath” feeling inside, where some virtuous law firm takes on an Evil Corporation, all to help a group of people injured or made ill by some dastardly act of depraved indifference.

Yesterday, I got a settlement check in the Hanson v. Google class action lawsuit.

It was for $0.02. That’s right. Two red cents. So, now, I’m going to get my two cents’ worth out of it.

Class action lawsuits are primarily a tool to feed, clothe, and provide shelter for lawyers. I’ve been a “member” in several class actions—against travel websites, against Google, one against Sony (I think), and a couple of others. In each case, I’ve received a letter, filled out a form, sent it in, and forgotten about it for years until, one day, I got a coupon for a discount at the defendant company, or a check for twenty-five cents, maybe $5, and once my wife and I each got one for $18. Wow, wasthata red-letter day!

My point is that, in all of these class action lawsuits—and thus extrapolating outward to presume that in most class action lawsuits in this country—the settlement is never worth much of anything to the class members. Who comes out ahead? Well, of the $20M settlement,

• The two “named plaintiffs” each get $20K
• The rest of the “class members” get checks, some worth $50 or $100, but most of us get something under $1

and, you guessed it

• The law firm gets $5.25M

No wonder these class action lawsuits pop up like dandelions in April.

k