Is It a Real Class Action Settlement, or Is It a Scam? Both.

Today I received an e-mail message notifying me that a couple of lawyers in San Francisco, Adam Gutride and Seth Safier, took it upon themselves to sue Netflix on my behalf last year. If you rent DVDs from Netflix, you probably got the same notice. It seems we are eligible for "benefits" as a result of a class action settlement, assuming the agreement receives final court approval.

It is hard to figure out exactly how we were wronged (the "long form notice" says details are conveniently available at a courthouse in San Francisco), but apparently it had something to do with Netflix promises of "one-day delivery" (sometimes it takes two!) and "unlimited rentals" (although you can keep the movies as long as you want, you're limited to three or four at a time, depending on your membership plan). The compensation for these imperceptible injuries is appropriately trivial: one month's free membership upgrade (from the three-DVD plan to the four-DVD plan) if you still belong, one month's free membership if you've quit.

On the whole, I've been very satisfied by Netflix's prices, selection, and service, especially compared with those at the local Blockbuster. In any case, it's hard for me to get excited about my free upgrade, since I've never felt a need to keep more than three movies at a time. I suspect many other members feel the same way. In fact, the free upgrades/memberships may actually benefit Netflix, since they continue automatically (for a fee) after the first month unless you remember to cancel. As is often the case with class actions, the true beneficiaries are the lawyers, who will receive more than $2.5 million for arranging this worthless deal.