Sunday, December 4, 2011

Tiny Class Action Suit Checks

I have in the past mentioned that while I appreciate the purpose and effect of class action lawsuits, I sometimes get a little frustrated at how little ends up in the pockets of the injured (who often had what could be considered pretty trivial injuries) relative to what ends up in the pockets of the lawyers.  One example was a lawsuit against Remington many years for their using an inferior grade of steel in their shotgun barrels--although as I could tell, no one was injured, either physically or financially, by this decision.  The injured parties received something $15 per barrel, while the lawyers who filed the suit received many millions.

A few days ago, I received a check for about $8 as settlement for a class action lawsuit relating to currency conversions done by credit card companies some years back.  That seems like a small amount--but this week I received an even more trivial example (with a few numbers at the bottom removed, and scanned gray scale instead of color to make sure someone does not try to use this):

It appears that this was a settlement concerning listing fees on eBay.


  1. Mine was twice as much. I certainly won't use a first class stamp to deposit it!

  2. Yes, the lawyers who filed that class action suit collected millions, and the shotgun owners got $15 each.

    But over 500,000 gun owners collected, for an aggregate of about $8M.

    That's the whole point of class actions - to aggregate claims which are too small to be pursued individually. By aggregating the claims, the return to the lawyers becomes large enough to make it worth their labor.

    Which is not to say that the class action procedure is not frequently abused - but this looks like a case where it worked as intended.

    This class of case should be distinguished from those where the individual claims are too small to be processed usefully, and the lawyers are the only people who get anything.

  3. I received some sort of settlment check recently for some kind of E-bay class action, in the amount of 34 cents. I am definitely NOT using a First Class Stamp to deposit that check.

  4. Cue Steve Martin from "The Jerk".

  5. Mine was $0.91 from the same action.

    Why didn't they just credit amounts under $2.50 it to our ebay seller's account?

    It would have saved the cost of generating the check, improved actual participation and payout & avoided the Seinfeldian problem of generating thousands of tiny checks.

    Oh right -- Then the fund would actually have to pay out the money.

    Printing a bunch of good-for-only-three-week checks makes it likely a bunch of them will NOT be negotiated.

    I see what they did there.

    (Verification word "undo". Indeed.)