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.