Netflix: Notice of Class Action Settlement

[junkmalle]

when Shakespeare said kill all the lawyers he was complementing them. Look it up.

http://www.spectacle.org/797/finkel.html

[GullyFoyle]

For those that don't know, a settlement typically means no fault is admitted.

"Unlimited", as has been discussed in the past, is based on normal people, not the a minority that want to distort it beyond intention. It does not mean "without limits, all that you want".

So the dictionary is incorrect in it's definition.
And I guess Blockbuster was correct in their no late fee claims as well.
The only reason a company settles is to AVOID a legal battle that could result in a greater penalty.
That does NOT mean they did NOT act illegally or unethically.
Unfortunately ONLY if it went to court would we know for certain.

[jimmalenko]

Did someone say "biased", or maybe even "cross to bear" ?


A lot of businesses settle even if they are in the right because the publicity of a court battle kills their rep, even if they're in the right. It's bad for business. That said, it's also quite an effective way if they are in the wrong to save face. Either way, we'll never know, but at the end of the day, no fault was admitted.


... and don't tell me you carry that dictionary in your back pocket when you go shopping, pointing out every deal that doesn't quite match the definition word for word ?

[adam]

A settlement is just a business decision, and lawsuits are a price of doing business when you operate on any large scale. Literally 99.9% of all lawsuits result in settlement, and I'm sure 99.9% of defendants aren't completely liable.

As for whether "unlimited" needs to conform to its dictionary meaning...you're damned right it does. This is basically a false advertising claim which implicates the DTPA and the U.C.C. Unless either of these statues defines the word., or the word carries particular meaning in the industry, then you use the ordinary meaning of the word and courts determine this by breaking out the dictionary. The caveat is that you have to read the word in the context of the entire advertisement. I think the more imporant language is that same day shipping stuff. If they had a policy of intentionally delaying orders than that is a blatant violation of the DTPA.

Why are so many people pissed about this? I remember all the threads over the years complaining about how Netflix delayed orders and lied and such. The whole point of the DTPA and class actions is to force companies to comply and advertise truthfully....now Netflix has to.

As for 2.5million dollars going to the lawyers, that's really not that much for a class action of this size. Class actions are very expensive to bring.

They could have cut every Netflix customer a check, like they usually do in class actions, but the taxes and administrative fees (you basically have to start a whole company to adminsiter the escrow account) eat it all up. You end up getting a situation where a $100 million dollar settlement pays out $5 or $6 to each person. Since Netflix is a service and one that can easily modify its service plan (allow 4 out instead of 3, etc...) it does make sense to pay out the settlement in this way. Ultimately, you're getting a larger value settlement, even though alot of people have no interest in it.

Usually class action notices are sent via registered mail. My guess is that they are going to get as many people signed up or opted out via email first, so they only have to send letters to the rest. Its a luxury that an online based business has that they can effectively reach all their customers via email.

[mbellot]

Hey mbellot, when Shakespeare said kill all the lawyers he was complementing them. Look it up.

Look it up indeed.

Far from "eliminating those who might stand in the way of a contemplated revolution" or portraying lawyers as "guardians of independent thinking", it's offered as the best feature imagined of yet for utopia. It's hilarious. A very rough and simplistic modern translation would be "When I'm the King, there'll be two cars in every garage, and a chicken in every pot" "AND NO LAWYERS". It's a clearly lawyer-bashing joke.

And even on the remote chance it is somehow complimentary to lawyers, its still a good idea.

[chas0039]

I don't think this is related to the definition of unlimited as much as the penalty that Netflix imposes by triggering a one day delay in shipping. This was not always the official policy and the reason the lawsuit has merit is that this change took place without notification and they still persist in telling customers that they do not delay on purpose, when in fact they do.

I still find they are a good value. It is annoying that they chose to provide a considerably more valuable settlement for customers who abandoned them, but this is a good business decision so I am not surprised.

[adam]

I guess you're not much of a Shakespeare buff mbellot.

[GullyFoyle]

... and don't tell me you carry that dictionary in your back pocket when you go shopping, pointing out every deal that doesn't quite match the definition word for word ?

Those of us who know what bait and switch means are VERY cautious.
We tend to read the fine print as well.
How did you like your Blockbuster no late fees rentals?

[jimmalenko]

... and don't tell me you carry that dictionary in your back pocket when you go shopping, pointing out every deal that doesn't quite match the definition word for word ?

Those of us who know what bait and switch means are VERY cautious.
We tend to read the fine print as well.
How did you like your Blockbuster no late fees rentals?

The point I was trying to make (obviously went over your head ) is that there's a fantastic thing called "common sense" that needs to be applied ..... everywhere. If something sounds too good to be true, it generally is.


TBH it's all a bit of a lark for me, as Australian providers for the whole are not spineless, knieving bastards like some of the ones you guys obviously have. I'll stop short of any anti-US rants, as I actually quite like most of you guys, but it all ties in together, don't you think ? I mean ... shady business practices, frivolous lawsuits ..... it's a world that you guys have built for yourselves. I actually pity you guys.

[lordsmurf]

not spineless, knieving bastards like some of the ones you guys obviously have.

We don't really have them all that much either. But we do have a lot of paranoid individuals that try to abuse a system and then cry foul when they don't get away with it. Ever since the deaths JFK and Elvis, our culture has been engulfed with conspiracy theorists, almost all of them always wrong.

Unlike a lot of the people here, even the lawyers, I was in college for advertising. I decided it was an ugly business, so I shifted my media specialties elsewhere and graduated in that direction. So while I'm no expert, I did buy/read a nice stack of books, pick up a few good tips, and learn that the theory of advertising is to sell your product, not to lie about it.

I yanked out a textbook and blew off the dust (literally). Here's a quote I want to share: "Under current advertising law, the only product claims - explicit or not - that are considered deceptive are those that are factually false and have the potential to deceive or mislead reasonable people." You have to prove (1) intention of deception, (2) factual errors, and (3) that the complaintant is a reasonable person, or that a reasonable person (as defined or believed to be by judge or jury) would be confused or deceived.

It is unlikely that Netflix did any of these things. They had a good-faith business model to cheaply rent you DVDs, and provide a more convenient outlet for renting as compared to traditional means. And it surely worked, as Blockbuster was forced to enter into compeition rather than face a slow death while clinging to offline rental methods.

In another book, it was mentioned that defense against false claims can often be difficult to defend (even if no harm was done), and usually accompanies a long drawn-out court battle. Settlements tend to happen instead. And that provides what complaintants usually wanted anyway. They were after compensation for feeling wronged, not an admission of guilt. Making customers happy is usually good, even when they're dead wrong.

If people wanted to get right down to it, "unlimited" is one of those words that can have a number of connotations given to it. The "old model" of rental, like Blockbuster, was quite limiting. You paid for each rental. You were charged late fees. You had to drive to them. Those limits disappeared with Netflix. Also consider the dictionary definition: "Having or seeming to have no boundaries". With so many limits now removed, it seems to be unlimited. Most reasonable people would, once presented with all the above information, likely agree.

A similar case developed a number of years ago, although I forget whether it was the result of lawsuit or settlement or something else. Wal-Mart used to carry the slogan "A;ways the lowest price" which was challenged and proven to sometimes be wrong. While Wal-Mart had the intention of beating everybody else in price, comparing prices to an ever-growing marketplace became impossible, so they change it to "Always low prices" or something less direct. To them, it meant the same as it always had. If anything, this turned out worse for the consumer, as it meant Wal-Mart no longer had to try and always keep the lowest price around.

In the case of Netflix, detractors tend to be people that want to abuse the system, or shift blame from postal errors. USPS has a lot of issues with mail reliability, as most people realize, hence the popularity of usually-higher-cost alternatives like Fedex and UPS. These detractors are rarely victims, but more like predators. They want to use the "3 plan" when the "8 plan" probably would have been more adequate to their needs. Or they want to copy every disc they can, high speed piracy. Or they want to rent for people aside from themselves or immediate family, when most reasonable people would have realized more accounts are needed. Those are the trends you see with people that complain about "unlimited" being deceptive.

As another poster said earlier in this thread, this is really nothing more than "litigious masturbation". Not only is Netlfix not wrong, but now they don't have to listen to this crap anymore. It's settled. Enjoy your free month or extra disc. Whoop-dee-doo.

[lordsmurf]

Netflix has been getting slow lately, Creatively! They ship 2 or so out my local distro center, another may come out of Texas and the 4th out of California. Thus disc 3 & 4 take longer to arrive and return and they pay the same postage.

This is just silly. If one warehouse doesn't have want you want, it comes from another one. These places don't have unlimited stocks at every place. I get most of mine from my local distro center because it's one of the first and one of the largest. But some of the more obscure titles come from others, or when the local is fresh out of stock.

Not to mention, there is not anywhere on the envelope or other documentation that says where the disc comes from. This is pre-sort bulk mail so it therefore does not have individual post office cancellations. The only addresses found on your envelopes are for the return to your local distro center, or the main San Jose address.

[adam]

lordsmurf, just one correction there. The current DTPA has absolutely no requirement that the deception be made intentionally. If it is intentional than it subjects you to further damages though (3X actual). The current version of the DTPA only dates back to 1995 also, so its quite possible your book is out of date.

That's also not a very accurate description of how a DTPA claim is made, but it sort of covers the bases.

To prove a deceptive trade practice you have to prove that 1) the plaintiff was a consumer (in regards to that product or service) 2) that the seller misrepresented, 3) and that this misrepresentation formed the basis of the bargain.

Reasonableness is really a given in any action.

I have no idea if Netflix would have been found liable had this gone to trial...but if they had a practice of delaying shipments, than I would say their advertisements were definitely in violation of the DTPA. Considering the number of complaints about this just on this forum, I think its definitely possible that this was the case. But its over now.

[lordsmurf]

Yeah, I thought of both of those things. The book was from 1996, but could be outdated (although surely not totally obsolete). And then the shipment delays may cause an issues, but what about "these terms can change at any time" sorts of statements, if any exist.

I was mostly addressing the ridiculousness of "unlimited" and thinking Netflix was out to get you. That's just not the case.

[adam]

And then the shipment delays may cause an issues, but what about "these terms can change at any time" sorts of statements, if any exist.

Implied warranties (marketability, fitness for particular purpose) can be disclaimed under the DTPA, but express warranties such as, "same day shipping" etc..., cannot be disclaimed once made. They can change their terms if they like but anyone who purchased/used the service under the prior terms can bring a DTPA claim if that's not what they received. But even still, this just applies to warranties which are another way to bring a DTPA claim. You can never disclaim a misrepresentation.

[lordsmurf]

There's always a way to obfuscate those things. Think about banks and business who end their day at 3:00 p.m. and start the "next day" at 3:01 p.m.

[ashtones]

Let me raise this question. I have learned to deal with the fact that because I am on the 3 plan I am also on the plan where netflix makes me wait for high demand titles. This didn't occure when I was on the 5 plan. Anyhow I have realized that if I get my discs in the mail Friday then I will receive next weeks new releases by Wednesday. Well this week I did that and Netflix skipped over Star Wars in my queue to my next title. And of course because of this glitch I am now have a "Very Long Wait" for it. What would Netflix gain by doing this. I don't get it. Are they trying to discourage me from renting high demand titles. Does it cost them more?I understand I am by no means a very profitable customer for them and I deal with the delays likewise but I just don't understnd this move. I sent them an email on Monday but still have not received a response.

[lordsmurf]

Maybe other people had it in their queue before you did. I often add stuff before it's released, and when I get it, I get it.

[drjtech]

When Netflix says "Unlimited" I expect that the Post Office will be the limiting factor, and that Netflix will not introduce additional delays to manipulate, or limit, the number of rentals. While nobody expects literally infinite rentals per month, the consumer should expect that unlimited means Netflix will provide the same service for all customers. What Netflix did, in fact, was impose limits and introduce intentional delays to enforce their limits.

Be that at it may, I have always been and continue to be a satisfied Netflix customer. But I still expect them to live up to the standards they advertise.

-drj

[NiteLite]

Thank you, Adam for some clarification.

As far as no guilt claimed, admission is not required to right a wrong.

Outcome. Netflix knew they were deceiving the customer and took the easier cheaper way out. Good business decision.
Netflix has "changed" their "terms of service" agreement.
Instead of blaming third parties such as the USPS their reps now admit the delay practices to users.
They were guilty of deception. Plain and simple to understand for most users.
(those that get the three movies and wait a week or two to return didn't notice the deception, duh.)

Now that they admit they were deceptive from the above examples , in my opinion, customers will be more satisfied. To me it was not so much the delays but the lying about it.
Being truthful up front would have prevented the lawsuit and a lot of negative response with customer satisfaction.
It's just the nature of business to do whatever to insure the highest profits

Oil, drug, insurance, healthcare, and most companies are deceptive in doing business. Netflix just happens to be this thread topic.
And I think it's a good value business most of the time.
btw...I just read that Circuit City is getting into the online video rental business. $16.99 /month 3-out plan. Cant wait to see how they pull this off...

[RabidDog]

I notice that some UK rentals companies are now starting to introduce what they call a fair use policy, eg they favour renters who rent the least number of discs, whilst others state a certain number of discs per month (generally about $3 per disk eg £7.99 gets four disks ) which IS a long way from unlimited. Same day shipping should mean same-day shipping for ALL customers regardless.. NETFLIX were wrong

Ashtones :: Netfilix has you marked.. they spit on your discs

[ashtones]

Here was the canned response I got from Netflix:

Thank you for contacting Netflix.com customer support!

To help you manage your Rental Queue, we provide inventory information for each
title you add to your Queue. Due to the fact inventory status fluctuates
constantly, it is possible that the status may vary before the movie can be
shipped. Please note that all expected "wait" designations are simply estimated
according to overall demand and inventory levels.

There are overall estimated "short wait", "long wait" and "very long wait"
status designations, but these do not indicate the exact waiting time for you in
regards to receiving this title.

We do suggest keeping your Queue in your chosen order despite a wait
designation. This will allow our system to attempt to process the title for you
each time a return is received from you. If your top choice title becomes
available to you at the time you make a return, it will be shipped to you. If
not, we will process the next available title in your Queue for shipment.

We apologize for any inconvenience this wait may be causing you. At present, our
goal is to ship you the DVDs listed highest in your Queue. If the first is not
available, we will ship the second; if the second is not available, we will ship
the third, and so on. Your Queue will indicate when we expect your next
available title to be shipped. After the title has been shipped, you will
receive an e-mail letting you know that the title has been shipped and its
estimated arrival date.?

You may also return to the site to confirm which title has shipped and get an
estimated arrival date. You may view your Rental Queue via the following link:
If you have any further questions or concerns, please feel free to contact us.

Thanks,
Stephen,
Netflix Customer Service .



--------------------------------------------------------------------------------------

Subject: Shipping and Receiving DVDs
>
>
> I made sure to return my movies over the weekend so as to recieve Star
> Wars III upon it's release Tuesday as if I don't catch this window I will
> have to wait weeks before it is availiable to be sent to me. Somehow upon
> arrival of these two returns Stars Wars was skipped over two other titles
> in my queue are being sent. I am upset as I do not want to wait a month
> or longer for this title and that is why although watching my titles last
> week I waited to return them to make sure their arrival would line up
> with the Star Wars release. Please advise on why this occured.

[TBoneit]

Netflix has been getting slow lately, Creatively! They ship 2 or so out my local distro center, another may come out of Texas and the 4th out of California. Thus disc 3 & 4 take longer to arrive and return and they pay the same postage.

This is just silly. If one warehouse doesn't have want you want, it comes from another one. These places don't have unlimited stocks at every place. I get most of mine from my local distro center because it's one of the first and one of the largest. But some of the more obscure titles come from others, or when the local is fresh out of stock.

Not to mention, there is not anywhere on the envelope or other documentation that says where the disc comes from. This is pre-sort bulk mail so it therefore does not have individual post office cancellations. The only addresses found on your envelopes are for the return to your local distro center, or the main San Jose address.

One of the two out of state return addresses I posted were from the outside of the envelope, upper left corner, from before I opened it.

I never had out of state discs until this year, This year their service has gotten slower and slower. Am I abusing them because I expect that on a 5 disc plan I should get at least 15 discs a month? I don't think my expectations are that high.

TTFN

[whitejremiah]

Those of us who know what bait and switch means are VERY cautious.
We tend to read the fine print as well.
How did you like your Blockbuster no late fees rentals?

Everything has to be taken with a grain of salt...no, blockbuster doesnt outright and charge late fees anymore...its more like what some car dealerships do with your monthly car payment (sorry, i couldnt really find too many examples, so just bear with me here) or a library book.....they give you a grace period...yes they will sell the dvd, game, or whatever else it is...to the account after a certain length of time...however this can be reasonably expected.....if you checked out a book from the library and held on to it for oh say...a year...you could expect one of two things to happen, either 1. you will end up with a massive fine, or 2. they will have sold the item to you....what i will say about blockbuster though, is if you turn something like say five days late...at the moment, they will charge you exactly zero...before it wouldve been like......depending on where you live and whatnot, couldve been anywhere from 5 to 25 dollars (i have rented stuff from a few out of state blockbuster stores, so i know that the prices and/or late fees did very quite a bit) so as far as complaining about getting charged nothing for turning an item in five days late...well, ive got no complaints about it at all

[Tidy]

Good grief people take it or don't your decision. Smurf I am afraid I have to disagree with you. I speak ENGLISH and in the ENGLISH dictionary unlimited does mean without limits. If Netflix meant "more than you get at the video store for the same amount of money" that is what they should have said. What they have been doing is unethical. They need to be held responsible. The fact remains though that a free upgrade is a slap in the face, but I am going to take it because it is better than a poke in the eye with a sharp stick.

[Jikchung]

I don't know if this has been posted, but it explains a lot of things that have been complained about.

From Netflix help:

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 members who receive the most movies may experience that (i) the shipment of their next available DVDs occurs at least one business day following return of their previously viewed movie, (ii) delivery takes longer, as the shipments may not be processed from their local distribution center and (iii) they receive movies lower in their Queue more often than our other members. By prioritizing this way, we help assure a balanced experience for all our members. Those that rent a lot of movies get a great value and those with lighter viewing habits are able to count on our service to meet their limited needs.

I am on the 3 at a time plan and recieve generally 3 discs per week, but I noticed that the last 4 weeks I was sent choices 4-6 in my queue even though consistently the first 3 titles showed as available. This is the policy my help search turned up.

There is a longer explanation if you search for "How does Netflix process and ship DVDs?" in the help section.

[somebodeez]

I don't know if this has been posted, but it explains a lot of things that have been complained about.
(snip)
There is a longer explanation if you search for "How does Netflix process and ship DVDs?" in the help section.

https://www.videohelp.com/forum/viewtopic.php?p=1399965#1399965
Thanks for the tip on the longer explanation though

[Jikchung]

Sorry, missed that post, gotta stop scanning and actually read. These topics end up in so much bickering sometimes it's hard to read every post.

[somebodeez]

So true