I’m generally of the opinion that frivolous lawsuits are largely a myth–the occasions where an unjustified lawsuit proceeds to trial are rare, and the occasions when such unjustified claims result in unreasonable verdicts are even rarer. I also think that class action lawsuits are necessary given the nature of our consumer economy. Why should someone be any less liable for cheating a million people out of a dollar each than for cheating one person out of a million dollars?
However, I just received notice of a class action lawsuit of which I and my wife are class members that shocks even my plaintiff-friendly conscience.
Some Volkswagen owners in New Jersey have found out the hard way that when you have a car with a sunroof, if you don’t clean out the sunroof drains periodically, rain will leak into your car.
As a result, they have filed 2 class action lawsuits in federal court, and a settlement has been proposed.
For many class members (such as myself), the only benefit they will receive is a piece of paper to put into the owner’s manual that says “check your sunroof drains every 40,000 miles.” That’s it, no reimbursement, no inspection, no free drain cleaning, nothing.
Other class members will be eligible to be reimbursed for repairs, but the total amount of the repair fund is $8million. The plaintiff’s attorneys have, however valued the “total monetary and non-monetary benefit” to class members at $125million (the collective value of a reminder to check your sunroof drains is $117million?) and are asking for a fee of $30million plus $1.5million in expenses.
So I get a piece of paper telling me something I already knew, and the attorneys who claim to represent my interests expect nearly $32million? WTF? Please, your honor, don’t approve this settlement.
Tags: class action, lawsuit, shameless, volkswagen, VW, WTF
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This is why cy pres is so helpful for class settlements.
If the value of the settlement is bupkis, the lawyer should get his 33% of same.
On the other hand, if the purpose of the settlement is to disgorge some ill gotten money from a large corporation which has cheated its customers (1million of them, out of $1 each, as the author mentioned), then the wrongdoer should not get money back.
The entire amount should be paid…..to the class and then when all of those claiming their share are paid in full, to the benefit of the ones who couldnt be found to claim their part.
Those charity reverters help the community, they seek to indirectly benefit the remaining class members, but most of all, they make sure the wrongdoer can NOT keep money it has not right to in the first place.
Patrick
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In this case, the value of the settlement isn’t 0: VW is paying $8million in repairs and reimbursements to some class members. However, instead of the usual attorney’s fee of 25% (for a class action) of the recovery for the plaintiffs, in this case the attorneys are proposing just the opposite: the class members get 25% of what the attorneys are asking for.
While using the “leftover” proceeds of a class action to benefit society has some appeal, it is not without controversy: judges are, after all, spending other people’s money.
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Rust Consulting is getting 4.5 million to pass out the 8 million dollars to the 6.5 million class action plaintiffs. The American Red Cross needs to hire Rust Consulting to help them out.
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Wow, looks like Rust is getting a pretty sweet deal, too. Do you have a source for Rust’s cut of the settlement, Ken?
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just found out about the item, have had troubles electrical due to water intrusion from the sunroof. The computer box located under the front windshield seems to have problems, and the ignition system failed and was noted as “rusted” inside a tube due to moisture. Golf 1997 4-door. Whats the best option? I can get a memo from my mechanic who worked on VW’s for VW dealership prior and is a certified master mechanic… What other lawyers are representing this group? file individual?
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