The Netflix Settlement Sucks

I got the Netflix class action notification this week, and even after a cursory glance, I wasn't going to participate, probably. However, via the magic of boingboing, I read of the details, and now for sure I'm not joining.

The Netflix Settlement Sucks
Netflix has the spectre of a class-action lawsuit on their hands in Frank Chaves v. Netflix, Inc. (San Francisco Superior Court, Case No. CGC-04-434884 ).  For complete information on this settlement as provided by the court, see

The summary of the case states that the complaint alleges that Netflix failed to provide “unlimited” DVD rentals and “one day delivery” as promised in its marketing materials. ...

According to the settlement, Netflix has reached a settlement that will provide the following remedies:
• Subscribers who were customers before January 15, 2005 will get one month of free upgraded service. That is, if you can have three discs out at a time, you get upgraded to four, for free, for one month. Subscribers who were customers before January 15, 2005, but are no longer customers, will receive a free one-month membership. But wait, there's more! If you accept the upgraded account, you will be put on that upgraded plan at the end of your free month and your bill will increase unless you cancel! It seems to me that the number of subscribers who fail to cancel, forget, or just plain don't understand will likely make Netflix more money as a result of this settlement.
• The lead plaintiff gets a $2,000 cash “bonus” from Netflix.
• And, of course, the kicker - subscribers get a rigged upgrade, the lead plaintiff gets a token amount of money, and... wait for it... The lawyers get $2,528,000

If more than 5% of Netflix customers opt out, the settlement is overturned.

The deadline to opt-out is a postmark of December 28th. Doing nothing does not opt you out! Doing nothing keeps you part of the settlement and provides you no benefits. 

How to opt out

According to the Long Form Notice posted at the settlement web site, you must send a written, signed request to opt out, and state:

1. Your name, address, email address and telephone number associated with your Netflix account.
2. Your current name, address, email address and telephone number if it's different from the above.
3. A reference to the litigation (i.e., Chavez v. Netflix, Inc. Case No. CGC-04-434884)
4. Approximately when you became a Netflix member, if and when you cancelled, and what service level(s) you subscribed to.
5. That you wish to opt-out of the class.

send your request to:

Netflix Opt-Out
5654 Geary Blvd., #210511
San Francisco, CA 94121 Justin Baeder has posted a one-page letter that can be printed and mailed (with no envelope) to make it easy to opt out, and has graciously allowed me to provide his links:

Word document found at
or PDF version found at

I hate to agree with Republicans about anything, but Class Action lawsuits are a freaking burden on U.S. Business. In the last month, I received class action notices from Apple (battery life of iPods), from Amazon (security litigation from the dot-com/dot-bomb days when I actually paid attention to the stock frenzy), from Verizon (the bluetooth fiasco), and probably others that I never even opened. Now, frequently, the underlying complaint is actually valid (especially Verizon's decision to cripple bluetooth functionality, yet advertise their phone as a 'bluetooth' phone), or at least understandable, but the company settles, pays each member of the class a pittance, but the lawyers get big bucks. The company in question has to defend itself, which also means another financial victory for their lawyers. In other words, a lose-lose proposition for consumers and businesses, but a win-win for defense and plaintiff law firms.


update: comments closed due to spam-rats. Email your comment, and I'll publish it (swanksalot @ gmail dot com)

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This page contains a single entry by Seth A. published on November 3, 2005 8:10 AM.

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