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Heartland Security Breach Class Action: Victims $1925, Lawyers $600,000

Unknown Lamer posted more than 2 years ago | from the not-sure-why-timothy-came-back-to-slashdot dept.

Security 163

Fluffeh writes "Back in 2007, Heartland had a security breach that resulted in a 130 million credit card details being lifted. A class action suit followed and many thought it would send a direct message to business to ensure proper security measures protecting their clients and customers. With the Heartland case now over and settlements paid out and divided up, the final breakdown is as follows: Class members: $1925 (11 cases out of 290 filed were 'valid'). Lawyers for the plaintiff class action: $606,192. Non-Profits: around $1,000,000 (The Court ruled a minimum of $1 million in payouts). Heartland also paid its own lawyers around $2 million. Eric Goldman (Law Professor) has additional commentary on his Law Blog: 'The opinion indicates Heartland spent $1.5M to advertise the settlement. Thus, it appears they spent over $130,000 to generate each legitimate claim. Surprisingly, the court blithely treats the $1.5M expenditure as a cost of doing business, but I can't wrap my head around it. What an obscene waste of money! Add in the $270k spent on claims administration, and it appears that the parties spent $160k per legitimate claimant. The court isn't bothered by the $270k expenses either, even though that cost about $1k per tendered claim (remember, there were 290 total claims).'"

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that's the free market for you libertarians (1, Interesting)

Anonymous Coward | more than 2 years ago | (#39629137)

Or are you going to whine about the lack of a free market legal system?

Re:that's the free market for you libertarians (5, Insightful)

trout007 (975317) | more than 2 years ago | (#39629395)

The current system of class action lawsuits is not libertarian. It is an opt out system. The plaintiffs get to include you in the class seeking the lawsuit without your permission. This is completely backwards on how it would work in a free system. In a free system a plaintiff could ask if you want to join them and you are free to do so. The current system is only supported by regulations that allow a plaintiff to include you without your consent. They just send you a very lengthy scary legal letter that you have to sign to opt out. Most people including myself don't sign them because I don't want to read 20 pages of legal jargon and sign my name to it.

Re:that's the free market for you libertarians (4, Funny)

Jawnn (445279) | more than 2 years ago | (#39629525)

Absolutely right. Any legal system is anti-libertarian. Mob rule, now that's libertarian justice!

Re:that's the free market for you libertarians (0)

Anonymous Coward | more than 2 years ago | (#39630353)

Surely you're joking, but you described anarchy, not libertarianism. Strong defense of legal rights (personal, property, contract) is at the heart of libertarianism.

Re:that's the free market for you libertarians (-1, Troll)

Anonymous Coward | more than 2 years ago | (#39630639)

Lying about your opponents' political views is the heart of liberalism.

Re:that's the free market for you libertarians (1)

Anonymous Coward | more than 2 years ago | (#39631359)

Lying about your opponents' political views is the heart of liberalism.

Projecting onto your opponents what you do? Now, that's Conservative/Republican/Libertarian/Tea Party. Take your pick, they are all the same thing: jack ass, dim witted, easily manipulated, paranoid, homophobic (because they are turned on by homoerotica) sheep.

Re:that's the free market for you libertarians (1)

Jawnn (445279) | more than 2 years ago | (#39631421)

Oh, now come on, moderators. His irony-laden recursion deserves better than -1, surely.

Re:that's the free market for you libertarians (3, Insightful)

Jawnn (445279) | more than 2 years ago | (#39631369)

Sadly, I am not joking. If this forum is any indicator, the vast majority of self-described "libertarians" are seriously (if ignorantly) advocating anarchy. In their unicorns-are-real world, no regulation is good and the "free market" will take care of all ills. Part of me wants to see the world become what they clamor for, just to see the bigger gangs eat their food and then kill them, right after having done the same to all of the self-described anarchists.

Re:that's the free market for you libertarians (1)

trout007 (975317) | more than 2 years ago | (#39631605)

True. But there are very interesting theories of justice under anarchy. The old west was such a time. And contrary to popular belief it was relatively safe. I mean the things the most famous gangsters did back then would barely make the local news today. The most interesting theory is that of an outlaw. You had a voluntarily justice system where those that wished to be protected by it would agree to settle disputes. As long as you accepted the ruling you were still protected by the law and those that adhered to the law. But if you didn't show up for trial or escaped from the law or didn't follow the sentencing you were considered outside the law or an outlaw. You gave up your right to be protected by the law and then anyone could kill or enslave you, steal your things, or do whatever they wanted with you since you chose to be outside of the law.

Re:that's the free market for you libertarians (-1)

Anonymous Coward | more than 2 years ago | (#39630587)

I don't understand it, therefore it's bad.

American politics. Straw men, lies, more straw men, vote for me I'm pretty.

We're so stupid we're going to burn the whole country down. Then, instead of rebuilding, we're going to point fingers at each other and scream about who is to blame.

But don't listen to me. Social Darwinism!!!!! Trojan horse!!!! mob rule!!!! radical!!!! UnAmerican!!!! Racism!!!!

Fucking morons.

Re:that's the free market for you libertarians (1)

nomadic (141991) | more than 2 years ago | (#39630725)

"The current system of class action lawsuits is not libertarian. It is an opt out system."

Not necessarily. It depends on the type of class certification.

Re:that's the free market for you libertarians (1)

Impy the Impiuos Imp (442658) | more than 2 years ago | (#39630737)

The class action system, like the statutes of limitations, and the 7 year rule for financial documents, is about letting business and people wrap up issues and get on with their lives.

Yes you can opt out, but he government allows businesses to bundle up all claimants in one trial to end the issue as something dragging on for ever and ever. They can wrap it up and be done with it financially, opt-outs wihstanding.
.
This is a good thing

Re:that's the free market for you libertarians (3, Insightful)

Shavano (2541114) | more than 2 years ago | (#39629597)

The legal system is anything but a free market. This is a big payout scheme for lawyers, using public authority as a lever to make a bad-acting company pay off those who were never harmed.

It looks like a corrupt judge to me. How much of the $600k found it's way back to his pocket?

Re:that's the free market for you libertarians (1)

webgovernor (1852402) | more than 2 years ago | (#39629845)

those who were never harmed.

Apparently, there's some debate about whether or not having your credit card details set as what equates to public information is harm... but if you're speaking of the "fees" for the legal team, then I'd say yes, that's very free-market.

Re:that's the free market for you libertarians (1)

Mass Overkiller (1999306) | more than 2 years ago | (#39630851)

I think he's implying the "never harmed" party was the lawyers - as in they got the actual pay out and the "harmed" party got less than $2000..

Re:that's the free market for you libertarians (0)

Anonymous Coward | more than 2 years ago | (#39630051)

Would you rather the lawyers use private authority to stop what you already agree is a bad acting company? How would you have the situation resolved? Wait till people are actively harmed? How much restitution do you expected from that?

Nice try accusing the judge though. Without evidence that's less credible on your part.

the court should not care about costs... (0, Troll)

lookatmyhorse (2566527) | more than 2 years ago | (#39629153)

...it should care about doing justice.They did their job.

Re:the court should not care about costs... (4, Insightful)

poetmatt (793785) | more than 2 years ago | (#39629185)

$2k total out of almost $4m on the case is *justice* when being sued for a credit card breach?

Re:the court should not care about costs... (5, Insightful)

sunderland56 (621843) | more than 2 years ago | (#39629411)

And a grand total of $0 towards preventing any future data breaches.

A fair settlement in any data loss case would include significant steps taken towards preventing the same thing from happening again.

Re:the court should not care about costs... (3, Informative)

rgbrenner (317308) | more than 2 years ago | (#39629473)

meh... I don't know... there's a reason the court was ok with awarding $2k to those 11 people.

Fact is, when your credit card is stolen, by law you're limited to paying $50 (and most bank's don't even ask you to pay that). Everything else is recovered from the merchants who accepted the fraudulent charges, and removed from the credit card balance. The bank then replaces the credit card (something Heartland would have been responsible for paying for as part of their merchant agreement).

If your bank removed all of the fraudulent charges, then you do not have a loss. Courts cannot reimburse you for fictional or imaginary losses. Furthermore, this isn't your social security number... when the credit card is replaced, the card number is changed, which means there won't be any additional fraudulent charges.

$2k is probably what those 11 people could prove they were out as a result of the breach.

Re:the court should not care about costs... (1)

icebraining (1313345) | more than 2 years ago | (#39629695)

I don't live in a place where CCs are all that common, but in the US, isn't it common to use the CC number for recurrent billing? Won't this force you to spend a lot of time contacting each service provider to update that info? I think that would be a very real loss.

Re:the court should not care about costs... (2)

ChrisMaple (607946) | more than 2 years ago | (#39630385)

I'd guess that very few people with recurrent credit card billing have more than a half dozen organizations involved with that. Most of those can be updated via the internet. Less than an hour and the job's done. It's something that has to be done every few years anyway, as the expiration date changes.

Re:the court should not care about costs... (1)

X0563511 (793323) | more than 2 years ago | (#39630521)

Not really. Most of those if not all will reach out to you if the card fails for some reason, and I've found that explaining what happened will get them to forgive you for any kind of perceived breach of conduct or contract.

Re:the court should not care about costs... (4, Insightful)

Fluffeh (1273756) | more than 2 years ago | (#39629707)

If your bank removed all of the fraudulent charges, then you do not have a loss.

As someone who has had a fraudulent charge on my account, and as the person who submitted this story, I am amazed by your statement. I chased my (previous) bank for three weeks, made numerous phone calls and had to go into a branch twice to get my account re-imbursed the charges. If you can call that "no loss" then you must clearly place exceptionally little value on your own time and effort. Even if the bank reimbursed me for my time at my normal salary-per-hour rate, it would have been substancially more than the measly $200 that Heartland paid out to these 11 "valid" claims.

I am also quite curious about how you can claim that out of 130,000,000 credit card details that were stolen, a $2,000 settlement to victims who were really "found" is okay. People who pinch credit card details don't do it because they are bored. They don't do it to see if they can. Someone clever enough to do this sort of operation is very much likely going to sit on the cards for a while, then charge them $1 each with a statement comment of "interest fee" or "aministration fee", sell them to others for a pittance in bunches and have them see what they can rifle through before they are caught (which means that countless individuals again go through a laborious process of showing that it wasn't them spending the cash) or any other number of means to money without getting caught. I would have hoped that this class action case would have been a resounding "Pay attention to security of your customers, else it will cost you a LOT of money" message to all the other merchants out there, but sadly it has been much more of a "Meh, you win some, you lose some, you still foot the bill to the customers in the long run..." message. It is nothing short of shameful.

Re:the court should not care about costs... (4, Informative)

rgbrenner (317308) | more than 2 years ago | (#39629833)

I chased my (previous) bank for three weeks, made numerous phone calls and had to go into a branch twice to get my account re-imbursed the charges

I would suggest changing banks then. I've had my credit card stolen too. I called my bank, they refunded the charge to the card while they investigated, and sent me a letter to sign. Received it a week later, signed it (1 statement, and a checkbox, IIRC), and sent it back. Received a replacement card about the same time. About 6 week later, they sent me a letter saying they finished the investigation, and removed the charge from the account.

I am also quite curious about how you can claim that out of 130,000,000 credit card details that were stolen, a $2,000 settlement to victims who were really "found" is okay.

The lawyers spent $1.5m contacting each of those people asking if they had any losses. 11 is all they could find.

And it isn't like these 130 million people aren't known. After the breach, auditors, forensic investigators come in.. The banks know who each and everyone of these people are. It would have all been disclosed after the breach was discovered.

Re:the court should not care about costs... (0)

Anonymous Coward | more than 2 years ago | (#39630263)

The lawyers spent $1.5m contacting each of those people asking if they had any losses. 11 is all they could find.

And it isn't like these 130 million people aren't known. After the breach, auditors, forensic investigators come in.. The banks know who each and everyone of these people are. It would have all been disclosed after the breach was discovered.

The court should have required that Heartland contact each bank with affected cards (the card numbers will tell them that) and the banks should have been required (at Heartland's expense) to contact every single card holder affected to let them know about the breach and the class action. Anything else seems kind of a waste.

Re:the court should not care about costs... (4, Informative)

Anonymous Coward | more than 2 years ago | (#39629205)

I don't know... I think the article summed it up pretty nice:

        Actual victims got: $1925
        Heartland spent $1.5 million to find the people to give out that $1925.
        Somewhere around $998,075 goes to non-profits
        The lawyers who brought the lawsuit? They got $606,192.50. For helping 11 people get less than $200 each.

Nice work if you can get it.

Re:the court should not care about costs... (2)

jedidiah (1196) | more than 2 years ago | (#39630305)

...except you are neglecting the actual breach.

You are also glossing over the actual cost of litigating this.

This is basic pro-corporate propaganda.

It would be nice if there were some criminal cause of action here and the relevant prosecutor(s) actually cared. In the absence of that, the only thing keeping the Soylent Corporation at bay is some self-interested lawyer.

Re:the court should not care about costs... (4, Informative)

Theaetetus (590071) | more than 2 years ago | (#39630689)

I don't know... I think the article summed it up pretty nice:

Actual victims got: $1925

Heartland spent $1.5 million to find the people to give out that $1925.

Somewhere around $998,075 goes to non-profits

The lawyers who brought the lawsuit? They got $606,192.50. For helping 11 people get less than $200 each.

Nice work if you can get it.

The lawyers who brought the lawsuit got $606k for helping 11 people get $2k and helping nonprofits get $1000k. Oh, and those lawyers spent 5 years doing it. And they had to pay all the costs up front, so don't forget the compound interest. And they have to pay their paralegals, staff, IT guy, rent, etc. for those 5 years. The individual lawyers probably ended up making about $20-30k per year. Not nearly as nice work, unless you can take on five or six of these at once.

Re:the court should not care about costs... (2)

nomadic (141991) | more than 2 years ago | (#39630951)

"Nice work if you can get it." For making $606,192.50 over FIVE YEARS? Consider how many thousands of hours they had to spend on the case, that doesn't sound like nice work at all.

Re:the court should not care about costs... (2, Interesting)

HBI (604924) | more than 2 years ago | (#39629213)

That might be the most idiotic thing I have ever read. What constitutes justice about paying money to a infinitesimal minority of the total affected people? What is justified about paying lawyers a salary for this boondoggle? You're trying to imply there was nothing better that could have been done with millions of dollars?

The courts shouldn't care about costs. Right. That's a pretty stupid attitude.

Re:the court should not care about costs... (4, Insightful)

Theaetetus (590071) | more than 2 years ago | (#39629283)

That might be the most idiotic thing I have ever read. What constitutes justice about paying money to a infinitesimal minority of the total affected people?

Because the total affected people were barely affected, and none of them would have been able to get a lawyer to fight this individually for them.

What is justified about paying lawyers a salary for this boondoggle?

They fronted the expense for the lawsuit and fought it... for 5 years. They managed to catch the company doing something really, really wrong, fought them in court, and won, forcing the company to change their ways. What isn't justified about paying them for that 5 years of work?

You're trying to imply there was nothing better that could have been done with millions of dollars?

I'm sure the company's CEO would have liked to buy another jet with it.

The courts shouldn't care about costs. Right. That's a pretty stupid attitude.

Thinking lawyers shouldn't get paid when they force a company to stop being evil is a pretty stupid attitude, too.

Re:the court should not care about costs... (0)

Anonymous Coward | more than 2 years ago | (#39629599)

How did the company change? Their risk model now includes the chance of paying a relatively small sum, if it didn't previously.

Re:the court should not care about costs... (0)

Anonymous Coward | more than 2 years ago | (#39629681)

The problem is that the lawyers and their kind make the law so complex as to require them. It's the equivalent of doctors making you sick so you have to visit them. There is no reason for this to take 5 years, it could be settled in a matter of weeks or a month or two but the snakes... I mean lawyers, do everything in their power to draw it out to legitimize their outrageous pay scale. Vive La Revolution - Power back to the people!!!

Re:the court should not care about costs... (2)

nomadic (141991) | more than 2 years ago | (#39630753)

it could be settled in a matter of weeks or a month or two

Do you have experience litigating complex cases?

Re:the court should not care about costs... (0)

Anonymous Coward | more than 2 years ago | (#39631367)

it could be settled in a matter of weeks or a month or two
Do you have experience litigating complex cases?

No,
but this case is far from complex:
Company A has bad security and subsequently lost personal information of 130000000 customers.
There that's it. Where is the complexity in that?

Ok, you could argue a week about how bad the security was, then maybe another week to evaluate the steps company A made to rectify the situation.
That's two weeks, case done. There is nothing else the judge needs to know.

The biggest problem is, I shouldn't need a lawyer at all to do anything that I need to do within the justice system. Getting a lawyer is OPTIONAL, when it isn't optional anymore, the law needs to be simplified. Yes, wishful thinking, but thinking about how to improve things is far batter than accepting whats broken, cause that'll make sure it doesn't get fixed.

Re:the court should not care about costs... (0)

Anonymous Coward | more than 2 years ago | (#39629737)

It took them 5 years to win a case where the company already admitted that they had a breach where millions of credit card numbers were leaked through malicious software?

Re:the court should not care about costs... (1)

TFAFalcon (1839122) | more than 2 years ago | (#39631131)

It took them (the lawyers on both sides) 5 years to agree how to split the profits.

Re:the court should not care about costs... (1)

readin (838620) | more than 2 years ago | (#39630841)

They fronted the expense for the lawsuit and fought it... for 5 years. They managed to catch the company doing something really, really wrong, fought them in court, and won, forcing the company to change their ways. What isn't justified about paying them for that 5 years of work?

The problem is that the lawyers negotiated both for their own pay and for the final payout. Could they settled 3 years earlier, got 5 times as much money for each of the victims, with the company paying less overall (saving money in payments to their own lawyers and to the class action lawyers)?

But why should the class action lawyers settle? The longer they drag out the case, the more money they get - regardless of the benefit to the victims. In a normal lawsuit, the plaintiff can accept the settlement over the objections of the lawyer. The plaintiff is, after all, the person who initiates the action and has the power to end it. In a class action lawsuit the plaintiffs don't have any control.

I'm not saying class action lawsuits are completely bad - most people wouldn't bother to sue at all - but the current system provides very little benefit to the victims. It is primarily a jobs program for lawyers.

Re:the court should not care about costs... (1)

readin (838620) | more than 2 years ago | (#39630869)

They fronted the expense for the lawsuit and fought it... for 5 years. They managed to catch the company doing something really, really wrong, fought them in court, and won, forcing the company to change their ways. What isn't justified about paying them for that 5 years of work?

The problem is that the lawyers negotiated both for their own pay and for the final payout. Could they settled 3 years earlier, got 5 times as much money for each of the victims, with the company paying less overall (saving money in payments to their own lawyers and to the class action lawyers)?

But why should the class action lawyers settle? The longer they drag out the case, the more money they get - regardless of the benefit to the victims. In a normal lawsuit, the plaintiff can accept the settlement over the objections of the lawyer. The plaintiff is, after all, the person who initiates the action and has the power to end it. In a class action lawsuit the plaintiffs don't have any control.

I'm not saying class action lawsuits are completely bad - most people wouldn't bother to sue at all - but the current system provides very little benefit to the victims. It is primarily a jobs program for lawyers.

Re:the court should not care about costs... (3, Insightful)

nomadic (141991) | more than 2 years ago | (#39631037)

As a lawyer who has worked on large class actions, it's difficult to settle early. First, corporate defendants usually won't even consider settling until the case has gone on long enough for them to realize they did something wrong. Second, it's unethical to even make a settlement offer on the plaintiff's side unless you know how many people were affected, and the approximate damages they suffered, which can take a long time to figure out. Also, to foreclose accusations of thievery and predation, no, they weren't "coupon" cases, I never got rich working on class action cases, and in every single case I was involved many, many class members recovered far more than I made.

"But why should the class action lawyers settle? The longer they drag out the case, the more money they get - regardless of the benefit to the victims."

Not really, if it's a contingency case, which they usually are.

Re:the court should not care about costs... (3, Interesting)

Shavano (2541114) | more than 2 years ago | (#39629655)

If the point of the trial is to determine guilt and punishment, that should be a job for criminal court. Civil courts exist to compensate those harmed, not just their lawyers.

I'd like to see reform of the system to dictate a maximum payout to plaintiff's lawyers of less than 25% of the amount awarded to plaintiffs.

Re:the court should not care about costs... (4, Insightful)

gshegosh (1587463) | more than 2 years ago | (#39630395)

I'd like to see reform of the system to dictate a maximum payout to plaintiff's lawyers of less than 25% of the amount awarded to plaintiffs.

And who would write a bill to reform the system? Lawyers?

Re:the court should not care about costs... (0)

Anonymous Coward | more than 2 years ago | (#39631711)

I'd like to see reform of the system to dictate a maximum payout to plaintiff's lawyers of less than 25% of the amount awarded to plaintiffs.

Good luck finding an attorney to handle your case for 5 years at a $500 payout. Class actions exist specifically so that low-damages cases can be aggregated and see their day in court. Otherwise, even if you have real damages or injury, no attorney would want to touch your case, and the corporation (or whoever harmed you) just keeps on winning. Unless you think you can take on the corporation and its lawyers pro se and win.

IAAL.

Re:the court should not care about costs... (0)

Anonymous Coward | more than 2 years ago | (#39629963)

The courts should care, in some small measure, about efficiency. When justice costs 100x damages, the system is broken.

I had a similar small-claims experience. The other side of a $100 dispute threw us into court, without any real attempt at settlement before paying $170 in filing fees and engaging a lawyer. Justice was going to risk about $5000 on our side and potentially the income earning ability of about a dozen people on the other side (no, the other side wasn't terribly bright.)

Life is really too short for justice, as it is served in the U.S. court system.

Re:the court should not care about costs... (2)

JaredOfEuropa (526365) | more than 2 years ago | (#39630249)

Interestingly, if the company had decided to just pay all 290 claimants their $2000 and not pay the laywers anything, they would have had around $1.5 million to blow on executive bonuses.

Man, guys (0)

Anonymous Coward | more than 2 years ago | (#39629163)

You really don't care too much about $100k here or there... can I have it?

This is _all_ class action lawsuits! (3, Informative)

Kid Zero (4866) | more than 2 years ago | (#39629193)

Most of them end up with the actual aggrieved getting $20 and the lawyers getting the six-figure payout.

Re:This is _all_ class action lawsuits! (4, Insightful)

Theaetetus (590071) | more than 2 years ago | (#39629311)

Most of them end up with the actual aggrieved getting $20 and the lawyers getting the six-figure payout.

Most of them take years and the lawyers don't get paid until the end. What's wrong with someone getting a six-figure payout for, as in this one, 5 years of work? Particularly when that six figure payout is divided among all of the lawyers on the team, their paralegals, their secretaries, their IT guy, etc.? You think IT guys should have to work for free?

Re:This is _all_ class action lawsuits! (2, Funny)

Anonymous Coward | more than 2 years ago | (#39629673)

I thought that we did.

Re:This is _all_ class action lawsuits! (3, Insightful)

trout007 (975317) | more than 2 years ago | (#39629677)

What is wrong IMHO is that the lawyers get to put people in the Class by default. You have to specifically sign a document to be removed from the class. Most people just throw those away because they are long and confusing. It would be different if the lawyers had to advertise and convince you to be a part of the class. This could be handled much easier by people taking these companies to small claims court.

Re:This is _all_ class action lawsuits! (4, Informative)

Theaetetus (590071) | more than 2 years ago | (#39630549)

What is wrong IMHO is that the lawyers get to put people in the Class by default. You have to specifically sign a document to be removed from the class. Most people just throw those away because they are long and confusing. It would be different if the lawyers had to advertise and convince you to be a part of the class. This could be handled much easier by people taking these companies to small claims court.

Except that it couldn't... The damages for any individual person may be only that $2k... Are you willing to spend two or three weeks producing documents, responding to delaying motions from the other side, attending depositions, arguing in court, filing motions of your own, etc. for $2k? Or, where could you find a lawyer to do that work for you for those weeks for 33% of your $2k compensation?

You can't. Which is why these small suits would almost never (and, prior to class action suits, did never) get filed. And the companies know this - they know if they do something slightly evil and take a few pennies or dollars from each customer, those customers aren't going to spend the time or money to bring suit, so they'll just let it slide... and with enough customers, that company can make millions upon millions. Call it the Superman III tactic.

And incidentally, elsewhere in the comments, people mention the one woman who took Toyota to small claims court over her Prius mileage, and how, since she won, there's no need for lawyers and everyone can do the same thing. What they don't mention is that she was an unemployed lawyer with plenty of time to sit in court.

Re:This is _all_ class action lawsuits! (1)

N1AK (864906) | more than 2 years ago | (#39629879)

If they didn't think the odds of them making a reasonable return on the suit were good they wouldn't start it in the first place. There is something distinctly wrong with people being able to start a legal action, with me as a plaintiff without my permission. Yes it is possible that they are representing the interests of all plaintiffs to the best of their ability, not abusing the huge leeway to put their own interest first. The opposite is also patently true.

Re:This is _all_ class action lawsuits! (3, Insightful)

Theaetetus (590071) | more than 2 years ago | (#39630655)

If they didn't think the odds of them making a reasonable return on the suit were good they wouldn't start it in the first place. There is something distinctly wrong with people being able to start a legal action, with me as a plaintiff without my permission. Yes it is possible that they are representing the interests of all plaintiffs to the best of their ability, not abusing the huge leeway to put their own interest first. The opposite is also patently true.

What's distinctly wrong about it? Consider, your state attorney general may bring an action against a company doing, say, illegal dumping. The attorney general isn't representing himself, he's representing the interests of all of the people in the state. In fact, the full title of these actions are frequently "the People of the State of X v. EvilCorp." Is that distinctly wrong, even though the attorney general didn't knock on your door and get you to sign on? Or is it somehow different and only distinctly wrong when the government's not involved?

Class action suits are not about compensation, they're about deterring the company from being evil. So the plaintiffs get a $20 check... would they have brought suit on their own for that $20? Or even $50? What about even $2000, as in this article? Would you take weeks off of work to spend those same weeks flying across the country to visit EvilCorp and spend hours taking depositions of their corporate board, digging through thousands of pages of emails looking for one smoking gun, hiring experts to investigate, filing repeated motions in court to oppose their motions, arguing for several days at trial, etc., for $2000? Hell, no. And so, absent class action suits, EvilCorp would get away with screwing you out of $2000, screwing me out of $2000, screwing Bob and Joe and Fred and John out of $2000 each, etc. A couple thousand here and a couple thousand there, and suddenly you're talking real money. Because none of us have the time or money to pursue such a small payout individually, they get away with screwing consumers out of millions and millions of dollars.

In a class action suit, however, the attorneys are acting as private attorneys general. The point is not getting everyone compensated with a $2000 check, the point is punishing the company for screwing their customers and making it so costly that they won't do it again.

Re:This is _all_ class action lawsuits! (1)

Fnord666 (889225) | more than 2 years ago | (#39631791)

What's distinctly wrong about it? Consider, your state attorney general may bring an action against a company doing, say, illegal dumping. The attorney general isn't representing himself, he's representing the interests of all of the people in the state. In fact, the full title of these actions are frequently "the People of the State of X v. EvilCorp." Is that distinctly wrong, even though the attorney general didn't knock on your door and get you to sign on? Or is it somehow different and only distinctly wrong when the government's not involved?

The situation here is different in one of two ways. First, if this is a criminal action then I as an individual do not have an action to bring to the court. Second, if this is a civil action then it does not preclude me from bringing my own civil action against the company if I feel I have been harmed.

I think what people are claiming is wrong with the way class action suits are handled is that, by default, if you do not take opt-out then you waive your right to bring a suit to the court in the future. Unfortunately the only other way would be to have it be opt-in, in which case there will always be people who are missed/overlooked in the notification process. Personally I would prefer the second method but I don't get to decide such things. Unless it is a significant fault with a possible large settlement, I always choose to opt-out of the class action suit and reserve my right to file my own claim at a future date. The payout for these piddly suits make them not worth participating.

Re:This is _all_ class action lawsuits! (0)

Anonymous Coward | more than 2 years ago | (#39629915)

So if I were a lawyer it's in my best interest to drag out any lawsuit for as long as possible, so I can maximize my innate grab-astic tendencies?
If IT drags out a project for that long we'd get sued for all our bananas and probably end up poorer than if we hadn't worked at all.
On a sidenote anyone wanna calculate the tax money that went to waste on this (I suppose judges,clerks and administration don't work nothing)?

Re:This is _all_ class action lawsuits! (1)

nomadic (141991) | more than 2 years ago | (#39631107)

"If IT drags out a project for that long we'd get sued for all our bananas and probably end up poorer than if we hadn't worked at all."

If that were true, why do so many IT teams drag out their projects? Most of them don't get sued.

Re:This is _all_ class action lawsuits! (0)

Anonymous Coward | more than 2 years ago | (#39630087)

I would be interested to see what the actual hours were on this. Most lawyers I know involved w/class action suits have plenty of other work that they keep busy on while suits like these putter their way through the legal system. Deposition here, filing there... I really don't think it's accurate to portray this as the only thing they worked on for 5 years, full-time.

Re:This is _all_ class action lawsuits! (0)

Anonymous Coward | more than 2 years ago | (#39630611)

Most of the rest of us get paid to deliver results to our actual clients or bosses. We make deals like "let me work for you, and I'll take 15% - 30% of the money, you get the rest."

We understand that if someone came to us and said "let me spend the next 5 years getting you $2,000 at a cost of $600,000" the correct response is "I could get a better deal working weekends at McDonalds."

Re:This is _all_ class action lawsuits! (0)

Anonymous Coward | more than 2 years ago | (#39630973)

Quick lesson on billing: Elapsed time != Applied time

Sure, 5 years elapsed before the case was resolved, but how much time do you think was actually applied by these lawyers in what was the very definition of a cut and dry case?

Re:This is _all_ class action lawsuits! (1)

rwv (1636355) | more than 2 years ago | (#39631049)

What's wrong with someone getting a six-figure payout for, as in this one, 5 years of work?

The thing that's wrong is that the company who couldn't keep their damned systems secure could have probably made the whole thing go away and saved a lot of money by settling for $2,000 with each of the 290 original claimants which would have cost only $580,000 instead of fighting for 5 years and ending up with 11 people only getting $200 each.

If the goal for the lawyers is to truly serve their clients... they should be looking to win a quick and fast case. By drawing out the case to 5 years and raking in $600,000 for themselves, the lawyers look like they're working mainly for themselves to further their own goals/careers.

Re:This is _all_ class action lawsuits! (1)

Theaetetus (590071) | more than 2 years ago | (#39631209)

What's wrong with someone getting a six-figure payout for, as in this one, 5 years of work?

The thing that's wrong is that the company who couldn't keep their damned systems secure could have probably made the whole thing go away and saved a lot of money by settling for $2,000 with each of the 290 original claimants which would have cost only $580,000 instead of fighting for 5 years and ending up with 11 people only getting $200 each.

Exactly right. Absent class action suits, the company could have "made the whole thing go away" with a pittance and non-disclosure agreements, and they never would have any incentive to actually fix their systems. You've persuasively argued for immunity from liability for corporations, no matter how evil they are.

Re:This is _all_ class action lawsuits! (3, Interesting)

TheRaven64 (641858) | more than 2 years ago | (#39629587)

The point of class action lawsuits is not to give a return for the victims, it's to punish people and companies that do a very small amount of harm to a lot of people. There's no point in suing over damages of $10, and little point over $100 unless you can do it in the small claims court and you're unemployed. Even asking a lawyer if it's worth going to court will probably cost more than you'll get back. If someone does something that causes damages worth $10 each to a million people though, that can be quite profitable if none of them is going to sue to recover their loss. If they did all go through the small claims courts, then this would be quite an effective DDoS on the legal system, so it's far from ideal. The class action suit is meant to cost the company enough to discourage this behaviour. If spending about $5m and a load of bad publicity costs more than properly securing your server, then it sounds like it worked just fine in this instance.

Re:This is _all_ class action lawsuits! (2)

Richard_at_work (517087) | more than 2 years ago | (#39629647)

Thats because in a class action lawsuit, the lawyers are the ones doing the work for you...

Why shouldn't they get paid? You can always bring your own suit against the plaintiffs rather than take part in their suit....

Re:This is _all_ class action lawsuits! (0)

ChrisMaple (607946) | more than 2 years ago | (#39631133)

It isn't a question of lawyers not being paid, but rather being paid reasonably relative to the work they've done. One common practice is "minimum billable time": talk to a client for three minutes, bill him for an hour. A majority of lawyers, conscious of their ability to get paid highly for doing as little as possible, do just that.

There are whole classes of lawyers that are more nearly honest: those making out wills or handling real estate transactions, particularly if they work for a fixed fee agreed to in advance. But lawyers in the lines of business that attract fraudsters and other people looking to get something for nothing, tend to be people like their clients, and those lawyers in turn actively seek suckers who are easily persuaded to join class action suits. depend on them to overcharge.

Re:This is _all_ class action lawsuits! (1)

Anonymous Coward | more than 2 years ago | (#39631865)

One common practice is "minimum billable time": talk to a client for three minutes, bill him for an hour. A majority of lawyers, conscious of their ability to get paid highly for doing as little as possible, do just that.

Unless you are going for hyperbole here (and therefore don't mean it literally), the practice you describe is a certain way to be disbarred in the state where it happened, and, within 6 months or so, in every other US bar. From time to time attorneys do get caught doing that - and spend the rest of their lives locked out of that career.

IAAL.

Re:This is _all_ class action lawsuits! (1)

bryan1945 (301828) | more than 2 years ago | (#39629765)

Reminds me of the Iomega Zip drive failure lawsuit (which I was part of). I got a $5 off coupon for a pack of Zip disks! Which cost like $20 back then, but woohoo me!

Sad state of affairs (2)

Morris Thorpe (762715) | more than 2 years ago | (#39629195)

This is sickening. No one in their right mind would argue otherwise. When lawyers make the rules (be it through lobbies or becoming lawmakers themselves), they favor their kind.
We're becoming more and more a society in which the do-nothings make out like bandits. That can't last much longer, can it?

Look at the google ads that came up on this page,

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Don't Wait For Settlement-Get Cash Now-If You Don't Win-You Pay Zero!
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Re:Sad state of affairs (1)

roninmagus (721889) | more than 2 years ago | (#39629267)

Do-nothing's? I'd agree it would be nice to receive a higher payout instead of the lawyers taking it all, but did all of the respondants appear, formulate their cases, argue the points of their cases, and defend their positions in front of the court? Sometimes the lawyers are the "do-alls." IANAL

Re:Sad state of affairs (1)

kaatochacha (651922) | more than 2 years ago | (#39631443)

Just because you're busy doing something that requires effort doesn't mean it's valuable.
I can stand in a field for ten hours a day juggling stones: it's hard work, the sun is hot, the stones are heavy.
But is it valuable?

This woman took Honda to small claims court. (4, Interesting)

trout007 (975317) | more than 2 years ago | (#39629209)

This lady opted out of a class action and took Honda to small claims court and won.
http://www.insurancejournal.com/news/west/2012/02/03/234115.htm [insurancejournal.com]

Re:This woman took Honda to small claims court. (0)

Anonymous Coward | more than 2 years ago | (#39630927)

If you read the article it says Peters who won the case was a former lawyer.

it's called punishment (0)

Anonymous Coward | more than 2 years ago | (#39629211)

It's called punishment. That's how punishment works all the time. You do no damage by speeding and you get a $200 fine. If you fight it you get to pay court costs, once again even if you did no damage. Are you to this planet? You act like you don't understand how punishment works. Did your mom never ground you as a kid? Did you never have to stay after school?

Class action or extortion? (2)

Troyusrex (2446430) | more than 2 years ago | (#39629223)

No one expects the lawyers to work for free but the lack of a true plaintiff in class action suits creates a situation where the lawyers can strike a deal best for them and not the client. What we need is the ability to class action sue lawyers for unfairly enriching themselves via class action suit...

Re:Class action or extortion? (1)

nomadic (141991) | more than 2 years ago | (#39630799)

What do you mean "lack of a true plaintiff"? And just fyi, all settlement agreements have to be approved by the court, AND affected class members get to lodge objections and be heard.

Re:Class action or extortion? (1)

Troyusrex (2446430) | more than 2 years ago | (#39631211)

"lack of a true plaintiff" means that while there may be a few people named as representatives of the class the lawyers have a much larger stake than any of the class members. In cases like this there are lots of plaintiff's with minimal damages (total awards amounted to less than $.10 per plantiff) and lawyers who stand to make huge money.

Sure, I can lodge an objection to this but even though it's woefully unfair it's not worth my time and it might be noted but it likely wouldn't be "heard". I'm just one out of a great many victims.

It's true that the courts must agree and it's also true that the Class Action Fairness Act of 2005 cut down on the abuses but this judgment shows that there's still a way to go to prevent it from being a system where the lawyers are the only winners.

Nobody benefits from these, except the lawyers (1)

StoutFiles (2471680) | more than 2 years ago | (#39629235)

Corporation that was "punished" finds ways to cost cut to make up for losses, which usually means jobs are lost. People wronged get a laughable amount of money. The lawyers make out like bandits though...but when don't they? There needs to be a better way of doing this.

hit them in the bank account (1)

alen (225700) | more than 2 years ago | (#39629249)

the whole point of the justice system is to make the process so expensive that a company or individual will think twice the next time about committing a tort or not following the law

if there is no economic penalty then people will just break the law if it doesn't cost them anything

Re:hit them in the bank account (1)

Jawnn (445279) | more than 2 years ago | (#39629561)

the whole point of the justice system is to make the process so expensive that a company or individual will think twice the next time about committing a tort or not following the law

if there is no economic penalty then corporations will just break the law if it doesn't cost enough to significantly impact their profits

TFTFY. OK, so "corporations are people too", but you get the drift.

end class action suits! (1)

Lehk228 (705449) | more than 2 years ago | (#39629253)

let's get rid of one of the last weapons the people have against corporate abuse

well other than actual weapons. Let's ask Marie Antoinette how that worked out.

Re:end class action suits! (2)

trout007 (975317) | more than 2 years ago | (#39629527)

Or we could make small claims court easier and cheaper. Then people could take these big companies to court themselves. It would be much more expensive to fight 1000 small claims cases then to fight one big case.

Re:end class action suits! (2)

Lehk228 (705449) | more than 2 years ago | (#39631195)

small claims court is already easy and cheap

Lawyers (4, Insightful)

tkrotchko (124118) | more than 2 years ago | (#39629275)

Laws are written by lawyers, administered by lawyers, and judged by lawyers.

You can't understand laws without lawyers, you can't hope to defend yourself in court without a lawyer.

You do realize the system is set up to require a lawyer, right?

And no lawyer has any real stake in simplifying or reducing the input of lawyers.

Re:Lawyers (3, Insightful)

IgnoramusMaximus (692000) | more than 2 years ago | (#39631155)

Lawyers in modern society fulfill the same role as the various priests and shamans fulfilled in the societies of old: control of access to the "deity" in fashion (in this case the fabled, never seen, mythical "Justice"). Overtly it is to "help" the sheep to access the deity in question, but in reality it is of course merely to satisfy avarice of the priests and their hunger to wield power over others. That is also the reason why priests are always attempting to control politics - in the old days by manipulating pharaohs, kings, emperors and the like or even becoming kings themselves (also see under "The Pope") - but in the modern times they dispensed with intermediaries and half measures and simply took the power directly, in the so called "republics" and "democracies" in which invariably at least two thirds of the power structure consists of the pries ... err ... lawyers.

And no lawyer has any real stake in simplifying or reducing the input of lawyers.

Which is of course the golden rule of all parasitic priesthoods.

Also note that, just like lawyers, all the priests and shamans in history always claimed to only want to "help" their victims and thus always argue themselves "indispensable" to whatever society they happen to prey on.

Why do you think priests always insist on making the rules of the interaction with the "deity" as arcane as possible? As an example: most of history the Christian priests insisted on having their Bible in a language that common people could not read and which had to be "interpreted" for them, just as modern lawyers insist on "legalese" for the same very reasons. Unlike the Catholic priests however, modern lawyers resort to the methods of other, older, priesthoods by ever expanding and complicating (never simplifying, as you noticed) their arcane manuscripts and rituals. This is because the Judeo-Christians have essentially hobbled themselves with the idea of a "Holy Book", which offers limited room for expansion (although several of the "one, only and 100% true" improvements and revisions have been produced). Fortunately for the Christian priests, the original writers made the thing ambiguous, self-contradictory and - most importantly - voluminous enough to satisfy the purpose it was intended for.

As to "justice", the very first test to see if a society has any is to see if making offerings to and groveling before a priest, i.e. a "lawyer", is a pre-requisite for its supposed dispensation.

Note also how promise of "justice" is a key element in most religions and how much emphasis is placed on it by the religion's priests.

Scale (0)

Anonymous Coward | more than 2 years ago | (#39629279)

An inch is a mile

When will Americans demand change? (5, Interesting)

MikeRT (947531) | more than 2 years ago | (#39629345)

The time has come for the legal profession to become fully accountable to the public like the rest of the white collar professions. Lawyers should not sit on the Bar associations; businessmen, doctors, engineers, etc. should be the ones judging the professional conduct of lawyers. Lawyers have little to no education in these matters but deem themselves fit to judge every facet of how we do our work. Why is it then so outrageous to think that similarly intelligent and educated people from different fields should be the ones judging their ethics, billing practices, etc.?

Re:When will Americans demand change? (1)

Hillgiant (916436) | more than 2 years ago | (#39629851)

Please, someone. Tell me this is a troll.

Re:When will Americans demand change? (1)

Anonymous Coward | more than 2 years ago | (#39629931)

Yes, because no other profession is self-policing, right? It's not like doctors have their own medical boards where they decide who gets to practice medicine and who should be disciplined for ethical violations, right? The legal profession is accountable to the public in the same way that doctors are, both can be sued for malpractice and both are subject to self-policing membership associations. Furthermore, lawyers are subject to rules promulgated by not just the Bar Association, but also their state's supreme court. This is accountability that exceeds that of most professions in which professionals are only liable through court action or arbitration.

I'm actually not really sure what your complaint is to be honest. You bitch and moan about ethics of lawyers, but I really do not see a problem in this case, which leads me to believe you are just trolling. How much do you think your credit card number is really worth? A few dollars? What are your damages if someone steals it? Maybe you have to pay for credit monitoring service? Bottom line, a company fucked up, they got caught, they fought with the law firm bringing the suit for a number of years, which racked up legal fees on both sides, and in the end, the company got what it deserved. If you just give the money to the plaintiffs, then who is going to bring the lawsuit? Unless you propose utilizing every lawyer on a government payroll to bring public interest cases, you might as well just turn over the keys to the castle to every major corporation in this country with the money to fight a lawsuit like this to a standstill.

Finally, did I just hear right that you think that doctors and businessmen should be reviewing lawyers' billing practices? Have you ever been to a doctor? Seen a doctors' bill? Are you even mildly aware of the ongoing corporate governance and compensation problems in this country? What system are you even proposing? You seem to know better, so maybe you can pitch something to Congress. I hear that they are very impressed with straw-men arguments these days.

Re:When will Americans demand change? (0)

Anonymous Coward | more than 2 years ago | (#39630075)

Idiot. Most state medical boards are NOT comprised of doctors. That was the OP's point.

Re:When will Americans demand change? (0)

Anonymous Coward | more than 2 years ago | (#39631945)

Idiot. Most state medical boards are NOT comprised of doctors. That was the OP's point.

Citation needed. Preferably before you call someone an "idiot" while having no clue about what you are saying.

Re:When will Americans demand change? (0)

Anonymous Coward | more than 2 years ago | (#39630415)

The time has come for the legal profession to become fully accountable to the public like the rest of the white collar professions. Lawyers should not sit on the Bar associations; businessmen, doctors, engineers, etc. should be the ones judging the professional conduct of lawyers. Lawyers have little to no education in these matters but deem themselves fit to judge every facet of how we do our work. Why is it then so outrageous to think that similarly intelligent and educated people from different fields should be the ones judging their ethics, billing practices, etc.?

As a Molecular Biologist, I would absolutely hate to have my work judged by businessmen, accountants, lawyers, or the radicals who occasionally protest outside my lab. They don't understand what it is I really do since their understanding of science comes from a hanful of forgotten High School courses, and whatever bits of unfounded magic Hollywood has inserted into its recent productions. Those who do not do work in the field are not equipped to understand what it is we do, and any judgement they would render is as irrelevent as a child's oppinion on international trade.
By all means, eliminate any conflicts of interest in oversight, but don't pretend that specialization in one field yields adequate expertise in any other...

no thanks (1)

Black Parrot (19622) | more than 2 years ago | (#39629429)

I've gotten several letters asking me to join class action lawsuits, and I always send them straight to the trash.

These suits aren't going to result in any meaningful personal compensation for any harm or inconvenience you have suffered. The only time I would even consider participating is if I thought it was a case of such egregious bad behavior that the company needed to be punished.

Re:no thanks (1)

trout007 (975317) | more than 2 years ago | (#39629509)

You haven't read the letters. You are already in the class. You have to sign and return the letter to be REMOVED from the class.

Re:no thanks (1)

Freddybear (1805256) | more than 2 years ago | (#39629671)

Generally, you also have to sign and return the letter to be able to collect whatever pittance is granted to members of the class if and when the case finally pays out.

It is a valid tactic (0)

Anonymous Coward | more than 2 years ago | (#39630245)

Many a scorned spouse has declared in divorce court "I'll pay a lawyer before I'll pay you."

Who leaked my card details? (1)

Ben Hutchings (4651) | more than 2 years ago | (#39630309)

I personally haven't experienced abuse of my card details - so far as I know. But if I did, how could I tell who was responsible - especially when there are vast leaks like this? It seems like it would be more fair to have an industry-wide fund to compensate victims, which the leaking companies would pay into proportionately to the number of valid details leaked.

Lawyers are EVIL pieces of shi+ (1)

MacGyver2210 (1053110) | more than 2 years ago | (#39630323)

My parents lost ~$2.5 million in a ponzi scheme. They caught up with the guys who perpetrated it, and all of the clients were automatically added to a class-action suit against them preventing my parents from pursuing their own legal action. The class-action lawyers actually threatened to inhibit an individual case if my parents opted out.

Eventually, they won, and they recovered several tens of millions from these people to cover the ~$72 million he bilked the customers for. A percentage of investment that would be returned was decided on and it worked out to be about $800,000 for my parents. Well, because it was a class-action suit, the lawyers took nigh to 80% of that money. My parents were awarded about $35,000, and the lawyer kept the other $765,000 as their 'fee'.

Consider they did this to all of the plaintiffs. They ended up with OVER 80% of the people's money who were screwed out of their life savings, and ruined by these people. Several 80-year-old ladies who had their entire $60,000 retirement fund stolen, who were only returned $250 and subsequently went bankrupt and lost their health insurance. I haven't followed up, but I would be surprised if at least one of them hasn't experienced medical trouble or death as a result of this 'fee' keeping them from their just returns.

The lawyers did the same thing as the original criminals to these people. Who are the REAL criminals here?

Re:Lawyers are EVIL pieces of shi+ (1)

nomadic (141991) | more than 2 years ago | (#39630863)

"Well, because it was a class-action suit, the lawyers took nigh to 80% of that money."

Why do I suspect you're exaggerating? 80% contingency fees are per se unethical and would have gotten those lawyers disbarred. If it was pursuant to a settlement agreement there isn't a judge in the country who would approve an 80% fee. If the lawyers really took 80% then report them to the state bar for discipline.

Lincoln's advice to lawyers (4, Interesting)

coldsalmon (946941) | more than 2 years ago | (#39630341)

"Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser -- in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough."

--Abraham Lincoln

This just in... (0)

Anonymous Coward | more than 2 years ago | (#39631257)

The Justice system is another economic sector, subject to manipulation. And as such, lawyers treat it like any other business. The real world consequences for the in game chess pieces are just a necessary side effect.

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