Abusive Lawsuits Turn Lawyers Into Thieves

We once described a lawsuit against Facebook.  Facebook agreed to pay $20 million to a group of lawyers and to whomever filled out a form to request $10 as payment for Facebook supposedly violating their privacy.  We thought this an outrageous violation of the concept of a Class Action because the lawyers didn't even try to identify all the people who might have been harmed and because the material posted on these particular Facebook pages was by definition public.

A legal notice in Time which appeared opposite page 66 of the March 4, 2013 issue, described another such settlement.  This dedicated web site tells us what's going on:

A Settlement has been reached with AOL Inc. ("AOL") in a class action lawsuit about certain users' search query data that were made available for download from the Internet in 2006.  AOL said that the data was anonymous.  The lawsuit, however, claims that some users' identities could be determined from the search data and that AOL violated certain privacy and consumer protection laws.

As usual in such situations, the settlement doesn't admit that AOL did anything wrong.  The web site tells how you might be able to get $50 from AOL:

The Settlement provides payments for anyone who: (a) had an AOL account between March 1, 2006 and May 31, 2006, and (b) believes in good faith that their search data may have been made public.  [emphasis added]

You don't have to show that your data were made public, you merely have to "believe in good faith" that your data may have been made public.  It's hard to find out actual facts because "There is no way based on your username alone to determine whether your search data was (sic) included."

The web site also says, "Your actual amount may be less than $50 depending on the number of claims submitted."  That's lawyer-speak for "We haven't bothered to identify the people in the class.  Since we have no idea how many there are, we can't promise you'll get any money unless you want to opt out of the class and sue AOL yourself."

A related web site explains why this is a "Class Action."

In a class action, one or more people called "class representatives" sue on behalf of all people who have similar claims.  All of these people together are the "class" or "class members."  In this case, the Class Representative is Sandra Landwehr.  One court resolves the issues for all class members, except for those who exclude themselves from the class.

This notice named the "class representative."  The notice in Time states that Sandra Landwehr will be paid $9,900 out of the settlement because she helped the lawyers and that the lawyers will get fees of $1.5 million.

The web site notes that AOL is objecting to the size of the fee.  We should hope so!

What a scam!  Mr. Snowden has revealed that pretty much anything on the web goes directly into the NSA's computers.  Due to the nature of the web infrastructure, anyone who has a computer on the web can use tools like Wireshark to intercept whatever traffic goes by.  The web is public!  How can anyone claim that AOL violated their privacy when it's not even clear that anyone can be certain they've identified the person who posted the searches?

Sandra, who helped the lawyers, gets $9,900 and the lawyers get $1.5 million, or 151 times as much, even though they didn't identify all the supposed "victims!"  What did they do that's worth $1.5 million?

This notice appeared in a Time issue whose cover story was "Why medical bills are killing us."  The author spent seven months investigating hospitals' billing practices.  After listing a number of reasons why we pay so much for health care, the article addressed lawyers:

Finally, we should embarrass Democrats into stopping their fight against medical-malpractice reform and instead provide safe-harbor defenses for doctors so they don’t have to order a CT scan whenever, as one hospital administrator put it, someone in the emergency room says the word head. Trial lawyers who make their bread and butter from civil suits have been the Democrats’ biggest financial backer for decades. Republicans are right when they argue that tort reform is overdue. Eliminating the rationale or excuse for all the extra doctor exams, lab tests and use of CT scans and MRIs could cut tens of billions of dollars a year while drastically cutting what hospitals and doctors spend on malpractice insurance and pass along to patients.

Seeing how lawyers can get $1.5 million for a dubious matter of web privacy without even identifying all the "victims," makes it a lot easier to understand how much they affect medical costs!