NETFLIX INC.: Consumers File Fraud Suit Over DVD Delivery in CA
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Netflix, Inc. faces a class action filed in California Superior Court, City and County of San Francisco by Frank Chavez, individually and on behalf of others similarly situated.
The complaint asserts claims of, among other things, false advertising, unfair and deceptive trade practices, breach of contract as well as claims relating to the Company's statements regarding DVD delivery times. The complaint seeks restitution, disgorgement, damages, and injunction and specific performance and other relief.
Case management conference was held on March 23,2005 before Judge Thomas J. Mellon, Jr. The conference will be continued to May 11,2005.
The suit is styled "FRANK CHAVEZ VS. NETFLIX, INC., A FOREIGN CORPORATION et al, case no. CGC-04-434884." Representing the Company is Keith Eggleton of WILSON SONSINI GOODRICH & ROSATI, 650 Page Mill Road, Palo Alto CA 94304-1050 USA Phone: (650) 493-9300. Representing the plaintiffs are Adam Gutride LAW OFFICES OF ADAM GUTRRIDE 835 Douglass Street, San Francisco CA 94114 USA Phone: (415) 271-6469; and Seth Safire, 6467 California, San Francisco CA 94121 USA Phone: (415) 876-4345.
According to the revised third-quarter guidance issued by Netflix last week, "Settlement expenses in the quarter are expected to range from $3.0 million to $4.0 million. The settlement remains subject to court approvals."
Usually in a class action suit, there is some effort to contact the members of the class to give them an option to join the suit or to be left out of the suit. I am presumably a member of the class, since I'm a Netflix subscriber. I have never been informed of my options regarding this action. Have you?
*UPDATE: Settlement information has been emailed to subscribers and a Web site has been set up. You can read the email here.
I have not been contacted, and its a frivoulous lawsuit. These kinds of suits work my nerves. The lawyers make out like bandits while the consumer is used.
ReplyDeleteI just received my email for this. So, I get 4 rentals instead of 3 at a time for 1 month. Whoopeee.
ReplyDeleteHere is what it says:
You are receiving this notice because you were a paid Netflix member before January 15, 2005. Under a proposed class action settlement, you may be eligible to receive a free benefit from Netflix.
A class action lawsuit entitled Chavez v. Netflix, Inc. was filed in San Francisco Superior Court (case number CGC-04-434884) on September 23, 2004. The lawsuit alleges that Netflix failed to provide "unlimited" DVD rentals and "one day delivery" as promised in its marketing materials. Netflix has denied any wrongdoing or liability. The parties have reached a settlement that they believe is in the best interests of the company and its subscribers.
Netflix will provide eligible subscribers with the benefit described below, if the settlement is approved by the Court.
Current Netflix Members: If you enrolled in a paid membership before January 15, 2005 and were a member on October 19, 2005, you are eligible to receive a free one-month upgrade in service level. For example, if you are on the 3 DVDs at-a-time program, you will be upgraded to the 4 DVDs at-a-time program for one month. There will be no price increase during the upgraded month. (If you cancel your membership after October 19, 2005 and before you receive the upgrade, you will have to rejoin to get the upgrade.)
Former Netflix Members: If you enrolled in a paid membership before January 15, 2005 but were not a member on October 19, 2005, you are eligible to receive a free one-month Netflix membership on your choice of the 1, 2 or 3 DVDs at-a-time unlimited program. (If you rejoin after October 19, 2005 but before you receive the free one-month membership, you will receive a credit for the free month when it becomes available.)
These benefits will be provided after the Effective Date as defined in the Settlement Agreement. Your eligibility for the benefits is based on your membership status as of October 19, 2005. The full Settlement Agreement is available for review at www.netflixsettlement.com.
You have four options to respond to the proposed settlement. You have until December 28, 2005 to make your decision:
Option 1. Sign Up For The Benefit As Part Of The Settlement
To receive the benefit, you must complete the online registration process no later than February 17, 2006, at www.netflixsettlement.com. By signing up for the benefit, you waive your right to bring a separate lawsuit against Netflix concerning the Released Claims (as defined in the Settlement Agreement found at www.netflixsettlement.com).
Option 2. Do Nothing
If you do not wish to receive the benefit, do nothing. You will not receive the benefit but will remain a Class Member. You therefore waive your right to bring a separate lawsuit against Netflix concerning the Released Claims.
Option 3. Exclude Yourself From the Class
To exclude yourself from the class, you must mail a letter by December 28, 2005. By excluding yourself, you preserve your right to bring a lawsuit against Netflix concerning the Released Claims. However, you will not get the benefit described above.
Option 4. Make An Objection To The Settlement In Court
To object to the settlement, you must file legal papers in the San Francisco Superior Court by January 5, 2006.
To receive your benefit, you must register by February 17, 2006 as described above in Option 1. You will not receive any other reminders to register for the benefit. If you have registered for the benefit and your eligibility is confirmed, then you will be provided additional information by email following the Effective Date as defined in the Settlement Agreement.
After the benefit period ends, the new or upgraded level of service will continue automatically (following an email reminder) and you will be billed accordingly, unless you cancel or modify your subscription. You can cancel or modify your subscription at any time.
In addition, if the settlement is approved by the Court, Netflix will modify portions of its Terms of Use. Netflix also will refer to its Terms of Use in certain advertisements.
To get more information about the settlement and procedures, and to take options 1, 3 or 4, visit www.netflixsettlement.com.
SRC: 10312005CAS
(c)1997-2005 Netflix, Inc. 970 University Ave., Los Gatos, CA 95032
This message was mailed to [XXXX@ASDFASDF.ORG]
I just got the notice today as well. Frivolous.
ReplyDeletehttp://www.geektronica.com/2005-11-01-stupid-netflix-class-action-lawsuit
I received my email about the proposed settlement today. On one hand, it does seem somewhat frivolous, but in the light of all the other companies now offering similar unlimited DVD rental, it was a little misleading what Netflix was really offering. Not to say I was ever confused, but I'm giving those people the benefit of the doubt.
ReplyDeleteAfter reading the details of the settlement, I suspect that Netflix won't come out too bad. Yes, they have to pay the legal fees of a few million, but as a subsciber and a member of the settlement, I automatically get a free one month upgrade from my normal 5 dvds a month to 6. AND, after that month is up, I have to specifically tell them to not charge me the higher amount from then on. So, I'll bet there will be plenty of people who don't notice right away that they are paying an extra $6/mo after their "free" upgrade.
Does anyone remember when Netflix LOWERED it's prices for basic service? I have been a subscriber since they started, and any problems I have ever had were handled promptly and professionally.
ReplyDeleteWhy didn't Mr. Chavez sue his mail carrier? I know that any delays I have ever experienced with Netflix were the fault of my pokey carriers. He made a mere $2000 (he'll need that for $5 rentals from Blockbuster), while his attorneys made almost $2.5 MILLION!! For those of you complaining about your service now, just wait - who do you think is going to pay for the $3-4 Million dollars that Mr. Chavez complaints will cost Netflix?
Unfortunately, we live in a world of "I want what I want and I want it NOW - or I'll SUE!" For all of you up there bitching about your service - get lost - MORE MOVIES FOR ME!!!!!!!!!
Frank Chavez, works for Netflix's competitors! This is the kind of crap that ties up our court system.
ReplyDeleteI too got this email.
ReplyDeleteNow I havent been a Netflix member for a while. I went over to blockbuster after a test run with them had me getting DVDs quicker. Plus with BB you get the free rental coupons each month which i use to rent video games, which without the coupons would be $7.99 plus tax each. So in fact the coupons pay for the rental service.
But I am considering going back to NEtflix as recently BB's service has been deteriating. For example - Land of the Dead in my queue said it was shipped on 25th Oct and Estimated delivery time is 27th.. I did not get until the 29th.. They are sent 1st class so are BB holding on to the DVDs after they get scanned out? or is USPS really that bad.
This comment has been removed by a blog administrator.
ReplyDeletekill your television
ReplyDeleteEveryone-
ReplyDeleteIf this is not the most embarrassing lawsuit I have ever heard of. People need to get a serious life! I have always had great service with netflix and totally intend in opposing this. Why should some scummy lawyer make out with 2.5 million dollars to represent a bunch of people that has no intentions in making our lives better. This world has become entirely too sue happy. Everyone has purchased a service that goes farther than just this company. They use the US Postal Service that is not always totally dependable. Who has not had a bill arrive somewhere late or had something lost? Once the movie leaves their hand or ours, we lose control of the situation. Anyone who intends of opposing the situation, please write and stop the situation at hand.
Totally embarrassed,
Erika
Oh puleeaase. Chavez is a ninny if he doesn't have anything better to do than to file suit against Netflix. Gimme a break. I've been a Netflix subscriber for 5+ years and have never had anything but outstanding service. I was a teeny bit annoyed when they raised their rates, but it still beats the heck out of Blockbuster. The stock is incredible, and turnaround time on the east cost is terrific. As far as I'm concerned, it's still the best deal in town. I plan on opting out of the settlement because I just do not agree. Period. Why doesn't he go after some corporate entity that really deserves it? Say, oil companies?
ReplyDeletehey, i'm excited to have four movies at a time that i'll have to cajole my boyfriend into watching with me. it will be one movie more frustrating than three.
ReplyDeletei don't understand why the plaintiff in the case needed 12 movies at a time. and i've never seen a netflix ad promising "unlimited" movies (but i don't watch t.v.). you can only watch eight, maybe nine movies a day if you are utterly unemployed and never eat or leave the house. perhaps he was trying to rent them out himself to make a profit?
I deleted clubland2's post because it was spam. If you need to see a copy of it, email me, and I'll send it to you.
ReplyDeletegreat post
ReplyDelete