Netflix Class Action Lawsuit Settlement

Update: Frank Chavez, the person named in the lawsuit, is getting $2,000, and the lawyers are taking in about $2.5 million for "...fees and costs" (I should have gone to law school). You can read the proposed settlement notice here.

If you were a paying Netflix subscriber before January 15th you may be eligible for a free, one-month upgrade in service (an additional DVD out at a time), pending approval from the court.

The lawsuit claims that Netflix made false statements in their marketing and advertising materials:

A class action lawsuit entitled Chavez v. Netflix, Inc. was filed in San Francisco Superior Court (case number CGC-04-434884) on September 23, 2004. The lawsuit alleges that Netflix failed to provide "unlimited" DVD rentals and "one day delivery" as promised in its marketing materials.

Netflix has stated that they "...admit no liability or wrong-doing."

They have setup a special Web site for this settlement: www.NetflixSettlement.com. There is also a link ("Settlement") on the bottom of the Netflix site to this page.

You have four options:

Sign up and join the settlement class by February 17th, 2006 at www.NetflixSettlement.com.

Do Nothing.

Exclude yourself from the class by mailing a letter, as per the directions in the settlement offer.

Make an objection to the settlement in court. You must file papers by January 5th, 2006.

Netflix has agreed, pending the approval of the settlement, to change its Terms of Use.

Thanks to Richard and Tom for sending this in.

Comments

[mills70]

Yep, I just got my email. Woo-hoo!

Ugh. Most class action lawsuits are completely bogus.

I'm eligible but will not be participating in this because I do not feel that Netflix made any false claims, and in most of these situations the only people "cashing in" are the lawyers.

No Thanks.

[trey/badass]

suite, I was a customer, I will take it Netflix!!! NFLX rules.

[james O]

Yeah, we get a free month's upgrade, Chavez gets $2,000 and his lawyers get, $2,528,000. That's right they get two million dollars we get the extra DVD this month.

[J]

Ugh... if you forget to cancel the "upgrade" after a month, they start charging you for it. Not worth the risk - I'm sure I'll forget and it will end up costing me. All this settlement really means is that it will be even more difficult to get new releases, with people sitting on an extra dvd for a while.

[Annoyed]

So if the settlement is accepted, Netflix gets off the hook for throttling?

Eff that.

[Peter]

Maybe now NetflixThrottlesBest will shut up and stop whining about the lying. The new terms of service is very explicit about the fact that there is a practical limit and they they will delay sending new discs to heavy renters.
Hey, it's their business and they can do what they want. If you don't like it stop using it and find a service you do like.

[Jes]

I hope people read the terms, because they state everyone but the 8-out group will be charged for future extra DVDs AFTER the upgraded 1-month time period ends. Users should take the responsibility to remind themselves to lower their account *back down* again. Anything could happen to Netflix's email reminder. They could say they sent it to you, and you have no proof whether they did or did not.

"for all but the 8 DVDs at-a-time subscribers, the upgraded service shall renew automatically (following an email reminder) at the end of the upgraded month at Netflix's regular subscription rare for the upgraded program, unless and until the Class member cancels the service or modifies his or her subscription."

[catana]

I trashed my letter. I'm not aware that Netflix ever promised one day delivery or unlimited rentals. I'm perfectly happy with the service in spite of "throtting," which is only intermittently annoying.

netflix was sued? :S

"I'm not aware that Netflix ever promised one day delivery or unlimited rentals."

Shill. Apparently you never raid the front page of Netflix, any of their ads, their TOS where they say MOST movies will arrive in a day, and that new movies will generally be sent the same day as they report a return. I don't accept the settlement. It's a cop-out. Giving people ONE EXTRA DVD FOR A MONTH does not begin to compensate for years of lying.

[jG]

They're just going to throttle everyone who tries to take advantage of that.

[jG]

They're just going to throttle everyone who tries to take advantage of that.

"I trashed my letter. I'm not aware that Netflix ever promised one day delivery or unlimited rentals."

You must be a new member then because they did it for years until getting hammered about it.

[Tom]

Nowhere does the settlement state that Netflix will change it's operations. It is still advertising 'unlimited DVDs'. I am opting out to keep my options open for my own lawsuit - one with much greater penalties.

[netflix throttles best]

"Maybe now NetflixThrottlesBest will shut up and stop whining about the lying."

So you admit that they are liars, but you just don't care about them lying. Afterall, if it doesn't affect you, so waht?

"The new terms of service is very explicit about the fact that there is a practical limit and they they will delay sending new discs to heavy renters."

No, they say they might not ship your first choice. But they CAN send SOMETHING on your list the same day they get a return. Netflix is cheating us to sit on our new DVDs after they have already received our returns. They get the benefit of the inventory while we don't get the x-out at a time which we paid for. They say the service is unlimited, not x-a-week limit. If they want to make limits, fine. I just want a ticker right at the top of my queue that shows the limit. Why can't Netflix do that, you worthless shills?

"Hey, it's their business and they can do what they want. If you don't like it stop using it and find a service you do like."

No, they can't. They can run it however the public wants it run. That's one of the few benefits of living in a DEMOCRACY. We get to say how businesses are run. Despite what a few selfish corporations THINK, we do NOT live in a corporate-ocracy. If THE PEOPLE do not like how a business is run, they can force it to make changes (ostensibly). Of course, the political system is so corrupt thanks to the legal bribery of these greedy corporations, people (like you) may forget their rights. WE are people. Corporations ARE NOT people. Corporations don't get to decide how things are run - or shouldn't.

"They're just going to throttle everyone who tries to take advantage of that."

You hit the nail right on the head. Not only will they throttle you to the same number of DVDs you already get (or less), they will be able to go right on throttling you if you're dumb enough to take this offering. Do not be fooled. Wait for a real settlement with REAL changes in their advertising and protocols.

It's crappy that they automatically include you in the class unless you send them a signed letter saying you want to opt-out. So you're automatically excluded from any future lawsuit unless you go thtough the hassle of sending them a letter opting out. That's BULL-SHIT. You should be excluded from the class by default unless you sign up and meet the criteria. This is just a way for Netflix to stop any future lawsuit, because most people won't bother to write the letter to opt-out.

[JMC]

I've been on a 4-Out-At-A-Time deal since first joining, a plan they don't offer anymore.

It'll be interesting to see what plan I'm temporarily upgraded too.

It'll be even more interesting to see what happens when the month is up. Wanna bet they try to reduce me to a 3-At-A-Time plan?

Heh heh... this is gonna be fun!

I like Netflix. I'm not a heavy user and don't feel I'm throttled. But there is a principle here. They have lied in their advertising; pure and simple. Rentals are not unlimited, despite claims to the contrary.

Imagine a restaurant chain that advertised "all you can eat" for a fixed price and then stopped "heavy eaters" from returning for more. It would render the advertising claim meaningless. The same holds true here.

This "deal" seems pretty lame to me. At a minimum, they should be made to stop any misleading claims in their ads--not just the fine print that no one reads--and there should be a much more substantial penalty--perhaps a month's free service. Corporations should have to play by the rules, just like the rest of us.

[Peter]

"No, they say they might not ship your first choice. But they CAN send SOMETHING on your list the same day they get a return."

No - read the revised Terms of Use before you keep repeating the save drivel. It is very clear "We reserve the right to allocate and ship DVDs among our subscribers in any manner that we, in our sole and absolute discretion" and "In determining priority for shipping and inventory allocation, we give priority to those members who receive the fewest DVDs through our service. As a result, those subscribers who receive the most movies may experience that (i) the shipment of their next available DVD occurs at least one business day following return of their previously viewed movie"

Democracy refers to government not business. With a free market system you have a choice and if you don't like the business practices of a particular company you should find one you do like and stop supporting businesses who are "lying" to you. I'm not a shill just because I like the service and find value in it. There are plenty of business who have screwed me and I stop giving them my money. I have not for a moment forgotten my rights, I choose to exercise my rights with my wallet instead of just complaining.

[Morgan]

"I've been on a 4-Out-At-A-Time deal since first joining, a plan they don't offer anymore."

I just upgraded to this plan a few months ago. They still offer it.

[Anonymous]

Man, some settlement -- Netflix is going to actually MAKE money off this deal, because countless numbers of people are going to forget to reset their accounts after their "free month" of upgrades. Seems like more an advertising ploy than an actual settlement. Says rather a lot, actually, about Netflix.

[Meg]

JMC, they do still offer the 4-out-at-a-time program. I was just looking at the plan options a moment ago and it's on there.

"Democracy refers to government not business."

Democracy refers to whatever THE PEOPLE say it refers to. You are not THE PEOPLE. You are one person. So let's ask the other 299,999,999 in the USA whether democracy refers to business. Democracy means we can set rules for business. We can out-law things like down-sizing people with cheap foreign labor. We can out-law the importation of products made in sweat shops. We can out-law throttling and other fraudulent business practices. WE have the power, not corporations and not shills like you who say "democracy refers to government not business."

Democracy refers to everything in a society, if we want it to. We should want businesses to run democratically instead of based upon tyranny, totalitarianism, and hierarchy.