Class Action Scams

Have you gotten a letter that says, "You may be entitled to compensation"?

I get a bunch. One claimed my union (New York State forced me to join) probably cheated me on medical insurance. I didn't think they did, but I filled out the forms.

I got a check for $557. Great!

Except ... my lawyers pocketed $7 million.

How is that fair?

Likewise, lawyers accused the Boston Globe of illegally sharing my clicking habits with Facebook.

I don't really care. Facebook already knows my clicking habits. Anyway, I'd only briefly subscribed. I canceled as soon as I realized that much of the Globe is insipid leftist drivel rerun from The New York Times.

Still, I got a check for $158.

My new video looks at those class action lawsuits.

In theory, they protect consumers, but many of these lawsuits resemble anti-consumer scams.

First, lawsuits make most everything cost a little more.

Second, they deprive us of good products. Bendectin, a morning sickness pill, was pulled from the market after hundreds of lawsuits claimed side effects.

But the FDA says the drug was safe.

Lawsuits helped kill three-wheeled ATVs, too.

Lawyers I confront say losing risky products is a good thing: "If they're scared of someone like me," one told me, "I'm happy about that."

We pay for his happiness.

Of course, if companies do wrong, they should be punished.

When Google was caught sleazily collecting location data from users who turned off location history, it wouldn't have been worth any single user's time, or money, to sue. A lawsuit would cost more than anyone might win. Hence class actions.

But the lawyers create their own scam. When Google paid $62 million to settle that lawsuit, the class action lawyers gave themselves $18 million and then gave $43 million to their favorite nonprofits. That included left wing advocacy groups like the ACLU (after it promised to use the money to help "people of color," "activists" and "people seeking ... transgender healthcare"). They gave victimized class members nothing.

Why would a judge approve such a deal? Because judges are just lawyers in robes, and most lean left politically. They love donating other people's money to their favorite causes.

"It's a huge conflict of interest," says Anna St. John, whose law firm challenges such settlements.

"You have this slush fund of tens of millions of dollars, and the parties and judge are allowed to decide who should get this money. When they have a choice between distributing that money to millions of class members who are not going to say thank you, versus directing millions of dollars to their alma maters, to organizations where they sit on the board, the choice is clear what they're going to do. Six of the attorneys or Google employees involved in the case sit ... or sat on the boards of the recipients getting millions of dollars."

"The guys who did bad get to reward their friends?" I ask.

"Yes. Google's giving money to organizations it already donates to," she notes. "It's unclear how it can be a benefit to the class when the defendant's just doing what it already does."

"This is a left-wing money raiser," I observe.

"It is. This is a settlement class of millions of Americans with diverse viewpoints, and yet the money goes to very extreme, left-wing causes favored by the attorneys and by the defendant."

I asked the attorneys and judge who approved the deal to explain why it isn't a scam. They didn't answer.

America needs lawyers to protect our rights and our freedom, just like we need missiles and bombs. But lawsuits, like missiles and bombs, are tremendously destructive.

We try not to use our missiles.

We should do the same with lawyers.

Every Tuesday at JohnStossel.com, Stossel posts a new video about the battle between government and freedom. He is the author of "Give Me a Break:

How I Exposed Hucksters, Cheats, and Scam Artists and Became the Scourge of the Liberal Media."

COPYRIGHT 2024 BY JFS PRODUCTIONS INC.

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