How I Became a TORT Victim

April 7, 2010

by Chidem Kurdas

Last month, my husband and I received in the mail a small card telling us that we were included in a class action settlement involving our Internet service provider, AT&T. This was news. We had not heard about the lawsuit claiming that AT&T “failed to deliver DSL service to its customers at the speeds promised.”

As usual in such cases, AT&T denied the allegations but agreed to settle to avoid continuing litigation. “You have legal rights and options, such as submitting a claim for benefits,” the card informed us. Further down in the fine print it emerged that we “may be entitled to a one-time payment of $2.00.”

Two bucks, enough to purchase a small cup of coffee – not cappuccino, mind you – at the local coffee shop. In the meantime, the class action suit we involuntarily became part of  had other consequences.  

Around the time  the case was certified as a class action, AT&T announced that it would stop offering the Internet service we had used for many years. Last month we – and no doubt many other customers – had to switch to another provider. The AT&T service was reasonably priced; now we have to pay an extra $10 per month.  That’s five times more money per month than the one-time $2 we could get in the settlement.

What is more galling, the transition was technically complicated and resulted in problems with our existing email. We spent weeks trying to make things work the way they used to work. It’s been a nightmare of frustration and wasted time.

As for the maximum data speed issue for which AT&T was sued, that was not noticeable to us in all the years we used the service. I’ve searched and found online postings from 2008 advising AT&T customers to monitor their download speeds.  A commentator on these postings wrote at the time; “You must be one of the attorneys who would file the case. Only the attorneys make money on class action law suits.”

That comment was vindicated. Some AT&T customers may get $2.90 for each month the speed of their DSL service was limited to a rate below the maximum for the plan they purchased. The rest of us can file for the one-time $2.

I’d guess that the total amount of money going to customers will be significantly less than $1 million. The lawyer who brought the case is getting $11 million plus $3.75 million for his favorite charities—all with the court’s approval, of course. The lone plaintiff whose name appears in the court documents is getting a $10,000 “incentive award.”

What’s really striking is the consumers whose interests are supposedly being protected by the suit not only did not make money but ended up being harmed. Yet the press presented the class action as a legal victory for Internet customers. In fact it is a victory for the lawyer and an affliction for us customers.

The indirect adverse effects of litigation on are often ignored. The focus instead is on the direct cost to businesses, who lead attempts to reform the system and limit frivolous cases.  Yet the indirect impact on the wider population may be just as or even more important.

For instance, there are fewer jobs because companies don’t offer products that are or could be the subject of lawsuits, but this effect is not easily traceable. In our case, we were initially bewildered by AT&T’s mysterious announcements and decision to withdraw from part of the market, which in retrospect fit the timeline of the legal proceedings.

I’ve decided to forego the cup of coffee and not to file a claim for the $2. But I’ll keep the little card as a memento of being victimized by the so-called civil justice system.

9 Responses to “How I Became a TORT Victim”

  1. Tom Dougherty Says:

    I agree with what you are saying but if I could play devil’s advocate, what about the fact that AT&T promised a service that they didn’t deliver on. Aren’t consumers entitled to compensation for failed promises?

    I don’t know much about class action lawsuits, but I suppose your response would be that those consumers who felt injured by AT&T failing to deliver as promised on internet service should sue and those consumers who did not feel injured should not sue. What is the basis for dragging people into a class action lawsuit who did not want to sue?

    And one final point about lawyers. Wouldn’t lawyers in general make more money having (supposedly) thousands of lawsuits than just one? Or because the payout of $2 per customer is so small there would not be thousands of lawsuits and no lawyer would take on a case with such measly payout? It would probably be the later.

  2. Hume Says:

    “I’d guess that the total amount of money going to customers will be significantly less than $1 million. The lawyer who brought the case is getting $11 million plus $3.75 million . . .”

    How is this possible? Do you have a citation for this? Most plaintiff lawyers work for a 30% contingent fee.

  3. chidemkurdas Says:

    Tom, I’m not interested in defending AT&T. However, if you did not get your money’s worth, you could at any time change providers. That was your choice. Now you don’t have the choice–you’re forced to get another provider.

  4. chidemkurdas Says:

    There may be situations where a class action suit helps consumers. But the payout to each must be much larger to be a significant benefit. When the payout is this small, it raises the question whether the suit was trivial.

  5. chidemkurdas Says:

    Hume, my understanding is that agreements about payments to lawyers vary. They’re not necessarily 30%.


  6. Our nation’s class action system – originally designed to help the little guy – has run amok, most times benefiting only the personal injury lawyers. As we saw in a class action suit against Ford Motor Company, the lawyers involved were recently awarded $25 million. Their clients? They received a $500 voucher.

    The general population suffers as well. Explosive litigation can drive companies out of business (putting workers out of a job) and increase the costs we pay for goods and services.
    As citizens, we can do our part to foster justice by not participating in any class action lawsuit unless truly harmed. Taking part when not injured delays justice and dilutes the class such that actual victims do not receive the compensation they need.

    Our courts should be used to provide timely justice for those with legitimate claims. We should be appalled by lawyers who milk tragedy for spoils.

    For AT&T case and settlement information please see: https://secure.ntcsol.com/softniche/easyclaim/Forms/

  7. Tru North Says:

    My notice didn’t say just 2.00. It said 2.00 PER MONTH for the time I was affected, and possibly 2.90 per month if I was in both of the two categories of people affected. Since it is for the time period since 1994, that could be a tidy sum for some people.

  8. chidemkurdas Says:

    My post specifically includes the different payment rates. To quote from the post: “Some AT&T customers may get $2.90 for each month the speed of their DSL service was limited to a rate below the maximum for the plan they purchased. The rest of us can file for the one-time $2.”

    How much will you get paid altogether, Tru North?

  9. vincent margiotti Says:

    ive been a att wireless customer over 2 years,with the iphone.paying over a hundred dollars a month,and always paid and havent never been late.always paid on time.my att plan is unlimited web thats provides me with everything on my iphone 4s.netflix,vevo,crackle,etc.but att stated they just came out with a new rule,stating once a customer uses to much web on there phone,att will slow it down.now att has done this to me,causing me not to watch my netflix,crackle,uveres,etc,and when i go to my browser.it takes 2 to 5 minutes to get to the site.but in my cotract and plan,i have unlimited web that ill beable to do all these things on my phone.ive called att several times and complained.they stated owe well,theres nothing they can do.i need that lawyer who handle the other cases on att like this one.i want to sue.


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