Class Actions

  • That is wrong.
  • And it is just one more clear example of evidence why this is an extortion racket.
  • Here are some more of what we call the class action wheel of fortune.
  • If you are a company, or if you work for a company that gets caught up in the class action wheel of fortune,
    watch out, because it can affect your job, it can affect the success of your company and get you tied up in these
    multimillion dollar cases where there really is little or no damage; or, even if there is, like there was in the Thompson Electronics case, where the television sets were not working, the attorneys got $22 million and the plaintiffs got a coupon, a $50 coupon or a $25 coupon to buy more of the same thing they were not happy about in the first place. 

-- Congressman Bob Goodlatte (VA)

govinfo.gov/content/pkg/CREC-2005-02-16/pdf/CREC-2005-02-16.pdf

It has an impact on other insurance companies, too.

A few years ago, I found I had been made a plaintiff in a case brought in Santa Fe, New Mexico, against Massachusetts Mutual Life Insurance Company. What was it alleged Massachusetts Mutual had done wrong? Well, when you get your premium, your bill, from Massachusetts Mutual, you can pay it on a monthly, quarterly, or annual basis. If you pay it on a monthly basis, you pay a little more than on a quarterly basis, and that is a little bit more than on an annual basis. Why? Because if you pay on an annual basis, it costs them a lot less money to send out one bill than to send out 12 bills a year, and they have the opportunity to get that money sooner invested. So it is a little less expensive to them, and they pass that savings along to the consumer. The plaintiff in this case and their attorney said they should have to spell out exactly what the difference in savings is rather than simply look at the bill and see that these payments are 12 times what there is and that that is a little more. They said they had to make a disclosure under laws that are not even supposed to apply to insurance companies. Well, they went ahead and settled that case. Why? I asked them. They said because they did not want to get in the same situation that State Farm Insurance Company found itself in with a $1.3 million lawsuit. What was the agreed-upon settlement they sent to the judge in that Santa Fe, New Mexico, court? Well, it provided for $13 million in attorneys’ fees, $5 million up front, $5 million over a period of time, and a nice $3 million universal life insurance policy for the plaintiffs’ attorneys. Is that not nice? Now, what did the plaintiffs get? The plaintiffs, all the plaintiffs got a promise that Massachusetts Mutual would not do this again. Now there is a new settlement proposed because that one actually was withdrawn when they realized how embarrassing it was for the plaintiffs’ attorneys to get $13 million in fees and the plaintiffs would simply get a promise for nothing. Now they have changed it so the plaintiffs might get as much as $50 off on their policy. The plaintiffs’ attorneys would still get the massive 8-digit settlement amount in the multimillions of dollars.

govinfo.gov/content/pkg/CREC-2005-02-16/pdf/CREC-2005-02-16.pdf