DVD Rental Firm Pays Price in Lawyers' Fees

Netflix Customers Get Free Month While Lawyers Get Millions
A California judge has approved a class action settlement against
Netflix for failing to live up to its promise to send another DVD
to its customers every time one is returned.  The settlement
requires Netflix to offer a free month of service to its 5.5
million current and former subscribers.  Under the final order,
Netflix will pay $1.3 million to two San Francisco-based
plaintiffs' lawyers and another $60,000 to a handful of other
plaintiffs' lawyers.

The original settlement offer called for plaintiff's lawyers to
receive $2.5 million and subscribers to receive a free one-month
service upgrade.  Judge Mellon rejected that settlement, with the
Federal Trade Commission labeling the offer "dangerously close to
a promotional gimmick."  Nearly 420,000 people accepted the
original settlement.  Under Judge Mellon's current order,
plaintiffs' attorneys can apply for an additional $1.1 million in
fees if the revised settlement entices substantially more people
to sign up for the free DVDs.

The lawsuit began several years ago when Netflix subscriber Frank
Chevez alleged that the company was not living up to its promise
to provide unlimited DVDs through the mail for a flat monthly fee.
The company admitted to "throttling" its customers – delaying
shipments to its most frequent users who were its less-profitable
customers.

Reports indicate that some Netflix subscribers have opted out of
the settlement for fear that they will foot the big legal bills
via higher fees.

—Source:  The Kansas City Star and Associated Press Financial Wire
Center for Individual Freedom, Jester's Court:

I'm a subscriber to Lovefilm.com which annoyingly but within its
terms and conditions similarly sometimes fails to allow frequent
users to have three DVD's at a time.  The moral for Netflix - get
your terms and conditions right.