Opinion: Letter to the Editor: Class Action Lawsuits Are Repugnant

Opinion: Letter to the Editor: Class Action Lawsuits Are Repugnant

Recall my letter from a couple years ago challenging Va. Sen. Scott Surovell's call for allowing state class action lawsuits: http://www.alexandriagazette.com/news/2019/dec/17/opinion-letter-editor-shady-influences/ I have an example, in the form of a letter, of why this sort of lawsuit is so repugnant:

Earlier this summer I received a postcard with print barely big enough to read about a lawsuit over a data security incident where a medical provider network's computer network was the target of an external unauthorized cyberattack in which patients' personal information may have been compromised. The lawsuit includes "any person who was notified by or on behalf of [the medical provider network] regarding the Data Security Incident," in other words a class action lawsuit. Even though the suit was filed on behalf of however many tens or hundreds of thousands of persons, this is the first I, and presumably the vast majority being notified, are hearing of it.

A settlement has been worked out: The medical provider network will compensate "ordinary losses" of up to $300 per person and "extraordinary losses" of up to $7,500 per person, but the total aggregate compensation would be capped at $2 million, with all cash payments being "adjusted pro rata" if claims totaling more than the two million dollars are filed. The settlement proposes, subject to the court's approval, that the medical provider network also pay attorney's fees and costs of over a million dollars.

The postcard includes Instructions to go to a website to make a claim, but, while recipients of the postcard are told they have a right to "opt out," the postcard does not explain how to do so, nor even does it identify in which court the class action was filed! It does give a deadline date for those who "wish to object to the Settlement or exclude" themselves, but it does not note that the word "or" is used to mean "exclusive or" as in they may not do both; only by drilling down into the details of the settlement website the postcard references, does one learn that if one excludes oneself, one no longer has a right to object to the attorney's fees or any of the settlement's provisions.

So the companies involved have their damages conveniently capped; a deadline of January 15, 2022 is set for filing claims so that, even if someone suffers an "extraordinary loss" after that date, the settlement seemingly shields the medical provider network from liability, while the attorneys suing them gross over a million dollars, if the judge approves the settlement terms. Standard tort practice is for plaintiff attorneys to set their contingency fee at one-third of the award/settlement, so one is tempted to wonder whether the two-million-dollar cap may have been reverse engineered from the attorney's fees or vice-versa. This is an example of how class action lawsuits function and why the Virginia legislature was well advised to not allow them in the Commonwealth's courts.

Dino Drudi