OnlineDVDClass Sending Settlement Notices for Netflix & Wal-Mart Class Action Lawsuit

Update: Netflix PR confirmed that the site is legit.

Note: I'm waiting on a confirmation from Wal-Mart PR that this email is legit.

Tonight several readers (and HackingNetflix) received an email from OnlineDVDClass.com notifying Netflix customers about a proposed settlement offer for the class action lawsuit against Wal-Mart and Netflix. While Wal-Mart is trying to settle the lawsuit, Netflix continues to fight and will go to trial in January.

The proposed settlement will be reviewed by a judge on March 14th, and if approved, $27.5 million will be divided among Netflix subscribers who were paying customers between 5/19/2005 to 9/2/2011. If you want to be included in the settlement you must file a claim before 2/14/2012, and you'll receive a payment in the form of a Wal-Mart gift card.

As usual, the lawyers stand to make the most of this lawsuit: 25% of the settlement fund and $1.7 million in fees.

So, what's the lawsuit about? From the OnlineDVDClass website:

The lawsuit claims that Wal-Mart and Netflix reached an unlawful agreement under which Wal-Mart would withdraw from the online DVD rental market and Netflix would not sell new DVDs. The lawsuit claims that this agreement caused Netflix subscribers to pay higher prices for online DVD rentals. Wal-Mart and Netflix deny: (1) that they entered into such an agreement, (2) that they have done anything wrong, (3) that the Plaintiffs have been harmed in any way, or (4) that the price of online DVD rentals was raised or inflated by any agreement between Wal-Mart and Netflix.

Wal-Mart is not admitting that it did anything wrong, but both sides want to avoid the cost of further litigation. The Court has not decided in favor of the Plaintiffs or Wal-Mart. The Class Representatives and their attorneys think the Settlement is best for everyone who is affected. The Settlement provides the opportunity for benefits to Class Members. Netflix has not agreed to settle and continues to believe that the lawsuit has no basis. Additional money may become available in the future as a result of a trial or future settlement with Netflix. Alternatively, the litigation may be resolved in favor of Netflix and no additional money may become available.

More information is available on the OnlineDVDClass FAQ.

Thanks to Brian, Lorenzo, FearNo1, and everyone else for sending this in.

Comments

[JJ]

Ho Hos shopping spree, here I come!

[Nathan Hoover]

As far as I could tell reading their site, it appears to be legit. That would be great if you could get confirmation. If so, I'll send in their form.

[Kristen]

How much do you think customers will get back in gift cards?

[melody]

in the f.a.q. it says they will ask the judge to grant each class representative (i.e. person who files a claim) $5,000.

[susan]

Hey, wait a minute! Wal-Mart is being sued for $27 million right? Doesn't it seem a little odd that the way they may have to pay it is by providing "gift" cards for their OWN STORES! Where's the punishment in that? Getting most of the money back into their coffers does not a punishment make.

[Steve]

Susan,
It's a settlement agreed to by the parties, not a punishment handed down by a court after a verdict. Neither Walmart or Netflix is agreeing that they did anything wrong, but Walmart is settling per these terms to make it go away. The real purpose of these type of lawsuits(where no individual is harmed enough by themselves to merit suing) is for lawyers to get big fees by essentially blackmailing big companies to settle.

[Ann B]

read more carefully Melody. That is for "class representatives" i.e. lawyers representing each class, there may be a dozen of these, may be one. You will get whatever is left over from the lawyers divided by all the people who apply. There are millions in netflix...if 5% apply it could be a dollar or maybe 5 or 10! at most.

[Colin]

To clarify some misconceptions here about the nature of class action suits. I will preface my comment by noting that I am an attorney licensed to practice in the State of Indiana and have done extensive work on class action litigation throughout the country. When a case is filed there are named plaintiffs. This is true in a case that becomes a class action case the same way it is true in your typical dog bite case. A "class representative" is a specifically named person in the complaint (i.e. the document filing the suit). Once a suit has been filed, which includes the named plaintiffs, the counsel for the plaintiffs will move for class certification. If class certification is granted then those originally named plaintiffs who meet certain (though not stringent) criteria will become the "class representative." The nature of recovery in a class action case permits a higher margin of recovery and special treatment for those representatives as an incentive and a reward for the hassle that they must go through on our behalf. Thus, the up to $5k/class rep goes directly to 40 people who were named specifically in the complaint not to the attorneys representing the class or to any other class member. As for the attorneys seeking to recover 25% of the recovery, that is a bit grotesque and I encourage anyone who is so inclined to exercise his/her right to file an objection by February 14. I will note that I have been personally involved in writing an extensive objection to class action settlement on behalf of a client and the objection was successful.

[willywill]

If it is true, well so be it. I know the site that wants your information to file the suit is notorious for sending out email spam and phone spam. So be careful.

[Fenbeast]

I received this same email, so I'm interested to hear whether it's legit or not -- I *did* rent from Netflix in the manner described, but given that they probably have sold my info to six gazillion people since I switched over to streaming videos, I'm not about to click on any links.

[Cameron]

If Bloomberg news reported it back in dec 2010, it's legit. Don't you people use google? I can't believe you people would come to this site first to see if it's legit? Stupid is as stupid does

[Chris]

The class action lawsuit is certainly real enough, but I think the concern is whether or not this is really a legitimate company that is emailing people. I'm sure that spammers read the news too and use a bit of truth in their scams on people. They could have seen the Bloomberg article and then decided to create a scam from it.

[jheartney]

Cameron, I did use Google, and one of the first results led me here. Nor is it unreasonable to come here with the question. Learn some manners.

[Ivy]

I have not been on the OnlineDVDClass.com site yet. If anyone has been on it successfuly without being hacked please post your opinion about the site. I'm tired of all these games people are playing and would like to get some ligetimate information. Further more I was in a CA suit with Denny's and got $250. I don't know how liget this is but I will do my homework on this one. When Denny's was sued there weren't much internet action going on. So I am reluctent to take this one seriously. Post if anyone has got conformation that this one is liget.

[Courtney Putnam]

Check out this article: http://www.fool.com/investing/general/2011/09/09/wal-mart-sends-netflix-a-trojan-horse.aspx

It appears as though this well-crafted settlement was arranged so that by issuing gift cards as payment, Walmart would have access to all of Netflix's customer information. This would allow Walmart the opportunity to lure current or past Netflix customers to their own Vudu streaming service. Pretty good deal for Walmart if it goes as planned. In any case, I won't be adding my name to the class action list...more for you guys, I guess. Enjoy your $1 gift card.

[Chan]

Instead of wondering about how legit the site is, I wonder about how legit the lawsuit is. I paid Netflix and got what I paid for. I don't buy dvds from Netflix and I don't buy anything from Walmart. So, as I see it I was not harmed by anything that may have taken place between the two companies and am not entitled to my $1 settlement. The news reports I have read say that Netflix is complaining that this is a ploy by Walmart to get its suscribers to use Walmart's streaming service Vudu. Why am I not surprised Walmart is trying to muscle into another business model? Am I not seeing the whole picture here?

[Walfred Raisanen]

onlinevclass.com is owned by Rust Consulting Faribault MN. BBB has downrated them becuase of many customer complaints. Google ripoffreports for more.

[Seth]

who are the lawyer here? anyone know?

[moviegeek]

I also got the email. From reports I have read at most you will get a $5 gift card, it's not worth giving my info to Walmart et al.

[wildcomputerlady]

Does this effect the future of Netflix? They certainly have managed to take a viable company and destroy it's reputation. I still hang on! They have added many new selections. The DVD's are no longer worth the bother.

[Pam]

These class actions are usually not worth the time you spend filling in the forms, copying documents, etc. The real winners are always the attorneys. They always manage to find some petty technicality to disqualify most of those responding.

[Mpdgb]

According to the notice, "Wal-Mart will pay $27,250,000, in cash and gift cards to settle the lawsuit." With up to 25% attorneys' fees and millions more in admin and other costs (including settlement to class representatives), this leaves roughly $18 million for Netfilx subscribers - all 24 million of us. So how does a 75 cent Wal-Mart gift card sound?

The big winners here are the lawyers - who I think should also be paid in Wal-Mart gift cards, just like the rest of us.

And if Wal-Mart is getting access to Netflix customer's information, that's a pretty cheap and ingenious marketing strategy.

Count me out!

[Hillary]

Apparently you can request a cash payment versus a gift card payment but only if you submit a claim form by mail (the gift card payment appears to be available by either a mail or online claim). I assume the amount would be the same for either, but does anyone have any thoughts on that?

[Johnny]

My concern is how they got my email address and the info that I rented from Netflix. And if Netflix is giving my information to Walmart, isn't that a breach of faith with Netflix and my privacy?

[dmg]

It appears to be a pretty ugly decision as far as Netflix customers are concerned. According to the "lovely" little spammy e-mail, you basically have to "opt-out." And, to do that you have to WRITE to the "lovely" little spamming company who doesn't even have the decency to say their name of Rust Consulting, a company that proudly gets its bread and butter from getting pennies for the public. Anyway, if you do want to stay out you have to write a letter, making sure to include YOUR name, address and phone #, to some obscure PO box they've provided just for the purpose. Thus, it looks like we can all start legally being solicited by a 3rd party on behalf of Wal-Mart. Lovely!

Let's all thank federal judge Phyllis Hamilton for this fine use of the judicial machinery on our behalf.

[Larry Morgan]

I believe the email address may have come as part of the discovery process solely for this mailing. It was probably given by netflix upon a court order. It does not seam it has been sold by netlix. I have never used this particular email address except for communicating with Netflix.

[punitive]

if they wanted to make the punishment really hurt, then both netflix and walmart would have to issue blockbuster online gift cards

[paul]

As others have pointed out, the settlement email went to an address that I only use for Netflix. That means I've already lost. I don't want spam from Walmart.

The settlement itself is also a catch-22. If I don't opt out, Walmart gets my contact information from Netflix (address, at least). If I do opt out, I'm required to provide my address and phone number on the opt out page, and aren't court documents public record, or at least accessible to parties to the case, ie Walmart?

This "settlement" amounts to nothing but a court-mandated sale to Walmart of Netflix's customer list. 75% of $27 million divided by Netflix's customer base is somewhere south of a dollar. I doubt most people will bother to redeem a gift card in such an amount.

The only winners in this settlement are Walmart and the lawyers. Consumers and Netflix lose.

[foggy]

Netflix customer claimed to me a minute ago that they sent out the mailing, but they did not, since the return address is from dvdclassaction.com.
Another brilliant mis-step by Netflix.

[super bear]

The lawyers should also get paid in Walmart giftcards! Only fair. That's like being paid in stamps. Someone should them back for being paid in a giftcard.

[Bill]

I read the settlement agreement at https://onlinedvdclass.com/LinkClick.aspx?fileticket=6XumaoTov6E%3d&tabid=67&mid=415 Section 7.3 states "WalMart and Plaintiffs shall cooperate in seeking to obtain the class list, to include email addresses if availabloe, from Netflix including serving subpoenas and/or other discovery requests to obtain such information if necessary". Nothing about how WalMart may use the info, other than keeping it confidential from 3rd parties.

Apart from the lack of consumer protection, WalMart is buying Netflix' customer list for a screaming bargain price of $1/user. Netflix currently shows an annual operating profit of about $18/user. The lifetime value/user is even higher, depending on retention rates. If you figure $36, and figure Walmart can convert just 25% of the list, and wants a 50% return from its list purchase, that's a list value of $4.50/user or $108 million. Don't like my assumptions? Knock it in half again to $54 million.

In short, not only is WalMart not being penalized, they're receiving a BETTERMENT of around $27-80 million dollars from this so-called settlement!

Insane.

[Keith]

It's a settlement, not a penalty.

[melissa]

seems too fishy to me, and i'm not giving my information to Wal-Mart unless i want to. also, i could care less about the issue this settlement is about, so whatever.

[Jeff]

The site says that the settlement money (minus the lawyer fees) is split between the people who file claims. PLEASE DO NOT FILE A CLAIM! That will leave more money for me! ;-)

Btw, mailing in the claim for allows you to choose a cash payout option rather than a gift card.

Also, Netfix hasn't settled so if they eventually do, we will probably go through all this again.

[I like mustard on my fries]

I don't think the courts will allow the settlement, just like they shouldn't be allowing this frivolous lawsuit.

Those filing claims are no better than the hobos standing by the freeway entrance with a sign.

It's the American Dream

[settlement]

Yes, it's a settlement and not a penalty. Big companies like Walmart quite often voluntarily open their coffers around the holidays and give wronged parties free money for no apparent reason.

[Vicki]

And I should give my last 4 digits of the social security number to someone I do not know? lol

[Will]

" And I should give my last 4 digits of the social security number to someone I do not know? lol"

Yeah. Then they only need to guess the first 5.

[knowmore]

you all need to get a life!

[moviegeek]

"you all need to get a life!"

Visiting hackingnetflix.com is my life.