Class Action Lawsuit ?

[ltljohn]

Got this in an e-mail yesterday, sounds like another pile of money for some lawfirm and a few pennies for the "Class".

 

$124 Million minus the lawfirms cut divided by how many people that have made reservations on expedia over the last 8 years. Only one party profiting here.

Or it is a hoax trying to get something out of me either way I think it is ridiculous.

 

The last one of these I was in the class for would have gotten me a coupon for a quart of oil because mobile had overcharged somehow.

 

NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION

 

In re Expedia Hotel Taxes and Fees Litigation, Case No. 05-2-02060-1 SEA

(Superior Court of Washington in and for King County)

 

A STATE COURT ORDERED THIS NOTICE.

 

PLEASE READ.

 

If you booked a hotel stay through Expedia and paid "Tax Recovery Charges"

and "Service Fees" during the period from January 10, 2001 through

June 11, 2008, a proposed class action Settlement may affect your rights.

 

 

 

 

Consumers of hotel stays through Expedia ("Plaintiffs") filed a lawsuit against Expedia primarily concerning the bundled "Tax Recovery Charges" and "Service Fees" charged by Expedia when consumers book a hotel stay through Expedia's website or telephone operators. The Plaintiffs alleged that, in its assessment of "Tax Recovery Charges" and "Service Fees," Expedia (i) committed deceptive or unfair practices in violation of the Washington Consumer Protection Act ("CPA") from January 10, 2001 to June 11, 2008 and (ii) breached its contractual obligations from February 18, 2003 through December 11, 2006.

 

 

There is a proposed Settlement on behalf of a nationwide class of consumers who booked hotel stays through Expedia from January 10, 2001 through June 11, 2008 and paid a "Tax Recovery Charge" and a "Service Fee." If approved, the Settlement will provide for the distribution to Class Members of $123.4 million in cash payments and Expedia Settlement Credit that can be used for hotel reservations and "package" reservations that include hotel reservations.

 

 

If you are a member of the Class as described above, your legal rights are affected, and you have a choice to make right now:

 

YOUR LEGAL RIGHTS & OPTIONS

MAKE A CASH ELECTION Participate in the Settlement. Receive a cash payment. Go to the Settlement Website at www.ServiceFeesSettlement.com and complete a simple electronic form.

RECEIVE EXPEDIA SETTLEMENT CREDIT Participate in the Settlement. Automatically receive Expedia Settlement Credit of approximately 2.17 times the amount you would receive in cash. Even if you choose to receive Expedia Settlement Credit, you are urged to go the Settlement Website at www.ServiceFeesSettlement.com and answer a few simple questions to ensure that you receive all the Expedia Settlement Credit to which you are entitled.

OBJECT TO THE SETTLEMENT Object to the Settlement or any of its terms, and urge that the Court not approve the Settlement. Appear at a Final Approval hearing on December 1, 2009. To object to the Settlement, to Plaintiffs' Counsel's request for attorneys' fees and expenses of up to $10 million, or to incentive awards for the Named Plaintiffs (Michelle Huggins and Jose Alba), you must provide written objections to the Court, Plaintiffs' Counsel, and Defense Counsel by November 11, 2009, consistent with the instructions in the Long Form Notice available at the Settlement Website, www.ServiceFeesSettlement.com.

ASK TO BE EXCLUDED Get out of this lawsuit. Get no benefits from the Settlement. Keep rights. If you ask to be excluded or "opt out," you will not share in the Settlement Benefits and you will not be permitted to object to the terms of the proposed Settlement. But, you will keep any rights you may have to sue Expedia separately for the same legal claims asserted in this lawsuit. To be excluded, you must return a completed "Opt-Out Form" with a postmark of no later than November 11, 2009. You can obtain an Opt-Out Form at the Settlement website, www.ServiceFeesSettlement.com.

 

This is a Summary Notice. For further information about the proposed Settlement and this case, visit www.ServiceFeesSettlement.com or call toll-free 1-866-291-7340. Para información en Español, favor de llamar al 1-866-291-7340 o visitar el sitio web: www.ServiceFeesSettlement.com.

 

DO NOT CONTACT THE COURT.

 

Please do not reply to this message. We are unable to respond to inquiries sent in reply to this email.

 

 

[DavidEBSmith]

It does appear to be a genuine class action case.

 

As to the lawyers making all the money and the victims getting next to nothing: Let's say that what this case is about is, Expedia paid tax on hotel rooms at the wholesale rate but charged its customers tax on the full price. So if the tax is 10%, the full price is $100 and Expedia gets it for a wholesale price of $80, they're charging $10 tax but paying $8 tax. And lets say that the way Expedia explains this to its customers is deceptive. Possibly it's consumer fraud, arguably Expedia is ripping off its customers. But it's only for $2 a shot. First of all somebody has to discover that Expedia is misleading its customers, and then somebody has to do something about it. Nobody will do that for $2. It's not even worth calling. Which means that Expedia can keep doing it because there's no downside. And they will keep doing it because they're doing it to millions of customers renting thousands of hotel rooms and for them, it's real money, while for you, it's just about nothing.

 

So the class action case comes along. Rather than have a million customers file a million lawsuits each claiming that Expedia ripped them off in an identical manner for $2, we can have one big lawsuit that says that Expedia systematically ripped off one million people the same way for $2 each. It's not worth it for a law firm to take a case for 30% of $2, but it's worth it for 30% of $2 million. It's not worth the court's time to hear a million identical cases, but it's worth it to hear one case that says this was done a million times. It increases the efficiency of the legal system. And now that it's real money involved, Expedia has to answer for what it's been doing and defend itself, and oddly enough, the vast majority of these consumer class action defendants choose not to try to prove that they're innocent.

 

The motivation for the class action firm is, when you aggregate millions of claims together, there's a way to get paid. The motivation for the defendant is, they pay out less money than they would if they went to trial so they get to keep some of the money they ripped off people. The motivation for the victims is, you do nothing but fill out a form and get back a little bit of money that you would have just written off if you had to pursue it yourself.

 

But if you would prefer that big companies cheat you out of some of your money through deceptive practices, well, I guess that's celebrating the free market.

[ltljohn]

the vast majority of these consumer class action defendants choose not to try to prove that they're innocent.

 

Even if they have done nothing illegal it is ofter cheaper to pay. So who is getting ripped off?

[Quinn]

A lot of companies use the class action suit settlement as an advertising ploy. Our shampoo turned your hair green; no problem, we'll give you fifty cents off on your next bottle.

 

 

[skinny_tom (aka boney)]

I think the complaint is that if a million people got ripped off for $2, why is it that when the company pays out $2 Million, they each only get a dollar after the lawyer is paid. Does it really cost $1 million for this type of legal action?

 

 

[DavidEBSmith]

the vast majority of these consumer class action defendants choose not to try to prove that they're innocent.

 

Even if they have done nothing illegal it is ofter cheaper to pay. So who is getting ripped off?

 

Whether they have done nothing illegal is often a complicated question. Contrary to popular belief, if a company has truly done nothing that by any stretch of the imagination could be considered illegal, it would be cheaper to fight it than to pay. There is cost-benefit analysis going on here, and if you have a 0% chance of being found liable, the benefit of paying is very very small.

 

The number of defendants who say "I did nothing wrong but I'd rather pay than fight it" is very small, unless the amount to pay is very very small, which these class actions aren't.

[DavidEBSmith]

I think the complaint is that if a million people got ripped off for $2, why is it that when the company pays out $2 Million, they each only get a dollar after the lawyer is paid. Does it really cost $1 million for this type of legal action?

 

It can. If you send out a million notices, what does that cost? Even at bulk rate? There's a lot of infrastructure that a firm needs to do a class action - you almost have to be a direct mailing house. There's ads in lots of publications. You have to manage the list of plaintiffs, and keep track of who opted out and who didn't, so that the checks can get sent out.

 

Anyway, if you got ripped off for $2, would you rather get $1 back or $0 back?

 

There's a psychology experiment where a cake gets divided between A and B, and the cake gets cut up 60% for A and 40% for B, and B gets to decide if both A & B get cake or if neither A nor B gets cake. Most of the time B picks "neither". Which makes no sense from an economic point of view - you're better off with a less-than-even share of cake than you are with no cake, regardless of what the other guy gets. But that's not how the human mind works.

[skinny_tom (aka boney)]

For $2 I'd be happy if the place that was ripping me off would just stop. I realize the amount of money involved when it compounds by the number of customers.

 

The next question... If a million people get ripped off for $200, does the cost of managing the suit change likewise? I can see only getting a dollar back on two because of the costs associated with the suit, but I can't see getting $100 back on $200 for essentially the same suit. Not that I've ever been in a suit before, but I'm going to take a closer look at that notice I got in the mail about a similar suit against Hotwire. (it seems to me that some lawyer somewhere has found a winning formula- what's next? Cell phone companies have been charging full tax on discounted phones forever. )

 

I can't eat 40% of a cake. If you can eat 60% let's

[Harry_Wilshusen]

Here's an interesting idea

 

http://online.wsj.com/article/SB10001424052970204731804574387021307651050.html

 

 

Harry

 

[James Clark]

There's a psychology experiment where a cake gets divided between A and B, and the cake gets cut up 60% for A and 40% for B, and B gets to decide if both A & B get cake or if neither A nor B gets cake. Most of the time B picks "neither". Which makes no sense from an economic point of view - you're better off with a less-than-even share of cake than you are with no cake, regardless of what the other guy gets. But that's not how the human mind works.

 

Who's paying for the cake? Or did it just magically appear out of thin air?

[DavidEBSmith]

Here's an interesting idea

 

http://online.wsj.com/article/SB10001424052970204731804574387021307651050.html

 

Yeah, it's always the lawyers' fault. I'm going over to court in a few minutes to watch a trial in a case that involves two neighbors who have been fighting for 6 years because one neighbor's garage roof overhangs the other neighbor's property line by 10 inches. They've been spending all that time and money just because the eeeevil lawyers made them do it. Right.

[DavidEBSmith]

There's a psychology experiment where a cake gets divided between A and B, and the cake gets cut up 60% for A and 40% for B, and B gets to decide if both A & B get cake or if neither A nor B gets cake. Most of the time B picks "neither". Which makes no sense from an economic point of view - you're better off with a less-than-even share of cake than you are with no cake, regardless of what the other guy gets. But that's not how the human mind works.

 

Who's paying for the cake? Or did it just magically appear out of thin air?

 

It's a magic socialist cake. No, just kidding, the psychologist is paying for the cake. So it's free cake to both A and B. And B is unhappy if A gets more free cake than B gets and B would often rather have no cake than less cake.

 

Of course, Ayn Rand would (or did) say TANSTAAFC.

[John Ranalletta]

Then, why the need for "quick pay" clauses in class actions?

 

Plaintiff lawyers have already come up with one tactic to neutralize objectors: "quick pay" clauses whereby they get paid immediately, even if consumers must wait until all appeals are exhausted to get whatever has been negotiated for them. "The class action lawyers are very clever," says Brian Fitzpatrick, an assistant professor at Vanderbilt University Law School and author of a forthcoming paper on class action objector