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The other day, I get this email sent from quote, no reply at sfdiscountsettlement.com.
The opening line is your unique voucher code may be applied for up to $5 at Shutterfly.com, one of those sites that lets you put photos on mugs and lots of other things.
And if I want more information, well, there is a link I can click on.
Now look at this point in my life, NPR has made me take like a dozen cyber security trainings that have taught me to A, never connect to public Wi-Fi networks, a B, not plug an unknown USB drive into my computer, and C, never, never.
Click on links from emails that promise me money, so I do not click the link for more information and instead.
Yes, hello. Can you hear me?
Yes, I can hear you. Okay, I call up Professor of Law at Georgetown, Maria Glover.
It's probably overstating it to say you are a czar of class action knowledge, but I don't know that I'll declare myself king just yet, but definitely know a lot.
Yes, Maria knows a lot about class action lawsuits because that sketchy email, it claimed to be money from a class action settlement called Rivoli V Shutterfly.
The email didn't say how I was involved or actually what Shutterfly had allegedly done.
That's why I called Maria though, and she tells me she's used to people being weirded out when they get something like this.
In fact, she remembers one of her law students coming up to her after class.
Her concern when she got it was that she was actually being sued.
Oh, no. Yeah, she asked if she could bring the class notification to me.
I said, I'm happy to look at it.
I'm almost 100% sure you're part of the class, but it was so eye-opening for me, right?
So I think there's a whole gap of information out there that would be great if not just lawyers and law students knew.
Great to know because if you've done basically any commerce over the past 10 years, there's a very good chance you have received an email or a postcard saying that you two are part of a class action settlement.
Hello, and welcome to Planet Money.
I'm Kenny Malone, and I'm Nick Fountain.
More and more class actions are being filed, which means more and more of us may be entitled to money!
Yes, yes, and today on the show, what to do when you discover surprise you're in a class action?
How do you make sure it's not a scam?
Yeah, and what happens if you don't claim your money?
And we pull back the curtain on the secret tricks of how these settlements get negotiated.
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When a whole bunch of people think they have been harmed by a company in a similar way, you got yourself a possible class action.
Instead of each person paying for their own attorney grinding through the wheels of justice one by one, US courts let lawyers bundle people into one tidy class, which allows for one piece of litigation.
The class action. I'm a share my screen.
Can you see this? Yes, I can.
Again, law professor, Maria Glover.
And we figured the best way to show what to do if slash when you think you've landed in a class action is to just walk you through the one I wound up in.
So, you know, I pull up the sketchy looking email for Maria.
Yes. So the first thing at your disposal is the case name.
Riverley against. River is a shutter fly.
Sure. Okay. Maria walked us through three things to do if you want to gut check whether your settlement notice is real.
First thing to know is that this notice is not sent to me by shutter fly.
It was sent by a claims administrator.
And sometimes you'll find a one eight hundred number for that claims administrator.
We could call that and see if it makes us feel any better about this being real.
Unfortunately, ours only has an email address for the administrator.
So we get to step two we poke around to see if there's any news coverage of this shutter fly settlement.
And there is. Do you see that it's been loaded to new sites.
So KSBY news. I'm sure that some local affiliate.
Good sign. Good sign. Okay.
Third step. Let's see if we can find the actual class action case listed on a more insider law websites.
And yeah, it was showing up on top class actions.
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But yeah, not spam actually.
It's a real settlement that we contacted Shutterfly about, which told us, quote, we are pleased.
This matter was settled and is now closed so that we can focus on delivering exceptional value and service to our customers.
So do you have any questions about this?
I have been looking into this.
I've read the court filings.
I'm curious. I mean, it says is a settlement voucher.
I don't know what what did they do?
What did they do? What did they do with my photos?
Well, allegedly, it's what did they allegedly do?
Okay. Okay. Because first thing we need to know is that this settlement admits no liability on the part of Shutterfly.
Now it's important to know that companies basically never emit fault in a settlement.
In this Shutterfly case, the settlement very explicitly says Shutterfly denies any wrongdoing, but everybody's agreeing to settle because litigation can be expensive and drawn out.
But what did they allegedly do?
Well, according to the court, the court filings, a Shutterfly customer named Rosemary Ravalli brought this class action on behalf of herself and other people who quote have purchased one or more products through Shutterfly.com that was deceptively represented as discounted from a false reference price.
Or here's here's how I sort of understood that when talking to Willa and Erica.
What Shutterfly allegedly did was harm us by marking up prices of products, just so that they can then mark them down so that we get like, I guess, tricked into buying things that otherwise we wouldn't have bought.
I can see them doing. Yeah.
Yeah. Now Shutterfly says they were essentially accused of offering discounts too often.
And again, they deny all allegations.
I've definitely added another thing to the car, you know, all the cat mugs for my family members.
We actually looked at Willa's order history.
And it appears the purchase that likely pulled her into this class action was indeed a cat photo mug plus two heart-shaped cat photo paper weights.
Yeah, this one was a discount of $43.40.
Wow. Okay, so that's how Willa qualified to be a member of the class.
But the next question we had was how someone found her and Erica and me for that matter in the first place.
And according to court documents online, what happened in this case is Shutterfly was ordered to hand over a list of email addresses for anyone who might qualify for this settlement.
And the way this often works is that information will be handed over to another company that is just a claims administrator.
Like that's what the company does.
They set up websites for class actions, send out emails or postcards.
And as we learned, apparently those claims administrator companies are quite often sending those things to our colleague Erica.
Yes, I get so many of these like postcards and emails.
I usually just delete them.
I don't know. I don't know what other ones have you gotten Erica.
Well, there was I was part of the naked juice class action lawsuit, of course.
Allegedly their juice was not naked or allegedly, at least not as healthy as customers thought foul.
I've got Zappos. I was part of a Zappos settlement.
Allegedly, they had a cyber security incident for which Erica would receive.
I was going to get a 10% discount on my next Zappos purchase.
And then there was a company called minted that sells stationary that allegedly had a data breach.
And then the company called me and said, offered me $22.02.
And I don't think I claimed it.
That is money. I mean, that's money.
Just clicked on the link and it wouldn't take me anywhere.
So I think it's too late.
The period is probably under.
Yeah. Hi. You going through your feelings there on missing out on a 20.
I kind of I kind of am also I'm realizing there were a few others I could have also claimed somebody for.
I'm not the break how to make sure you don't end up sad like Erica and an inside look at the secret techniques used to dissuade us from claiming our class action settlements.
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Why are so many books suddenly considered so dangerous to kids?
What are so many books that are so dangerous to kids?
What are so many books that are so dangerous to kids?
Every night of every single day, Attorney Jerry Matman gets an email alert.
Now, part of the reason Jerry tracks all this data is because it is useful for his other job.
Jerry's a class action attorney at Dwayne Morris, where he does not represent you and me Nick in these cases.
No, it is not. He's defending the companies, the big companies often, which he's aware does not make him the populist figure in this system.
I long time ago stopped losing sleep over what I do.
Basically, I'm there to make sure everybody gets their due in court.
We wanted to talk to Jerry because he has an idea about why the rate of class actions is way up.
That idea, it starts with us, the people that make up juries.
What I see and what I teach over at Northwestern in terms of when you pick a jury.
Juries right now are a bit angry, distrustful of authority.
Jerry started noticing a few years ago that people seemed more mad.
Jerry says what this meant was that when lawsuits actually went to trial and went in front of a jury, juries were hammering the companies in their verdicts.
You're seeing verdicts that we call nuclear verdicts.
They're a lot higher than before.
Nuclear verdicts? You're seeing eight figure and nine figure verdicts in a single plan of case, like a medical malpractice, a wrongful death case.
Those are just in single plan of cases and it drives up the value of litigation.
What a plan of sloyer is willing to settle for.
If those are the awards for one person suing, Jerry says imagine the stakes of a whole class action going to trial.
And he points to a couple of recent examples, like how a railway company was initially ordered to pay $228 million when a jury found that the company was collecting worker fingerprints without their consent.
Or how a jury awarded $1.8 billion in a class action against the National Association of Realtors and real estate firms, because the jury found they were conspiring to push buyers towards homes with higher commissions.
The point is, Jerry says if you are a lawyer negotiating on behalf of a class right now, you have a lot of leverage against the company you're suing.
And basically they're saying, okay, go ahead and try it.
See what six members of the jury think that's worth.
Right. So very few class actions get tried because of the danger of doing so.
Good bankrupt a company and a career of a CEO.
So more often than not, those class actions are getting settled.
And as the data point show, they're settling at much higher numbers than before.
And the end result of these higher and higher settlements, Jerry says, is this kind of gold rush?
He's seeing more lawyers get into the class action game.
Hence, Jerry's seeing double the number of class actions filed every day.
Now, because Jerry has been on the company side of these class actions, we have figured he could let us in on how the sausage gets made a little bit.
Maybe give us some juicy details about the tactics he uses when negotiating on behalf of a business that is being sued.
And a huge thing that Jerry says he cares about is response rate.
Yeah, every class action settlement is different, but in lots of settlements, if we do not actively claim our money, it will go back to the company.
So fewer claims means less damage to the company.
And so, Jerry has very carefully studied the factors that do and do not get people to claim their money, starting with the amount of money that they're being offered.
I have my own internal over the years kind of measure of that.
I call it the tank of gas rule.
The tank of gas rule? Right, if the amount of money would enable you to buy a tank of gas to fill up your car, it's probably worth your while and trouble to fill out the forms and send it in.
Yeah. But anything less than that probably isn't going to change your life.
And you've made an internal calculation of, I don't want to be bothered.
I'll rather watch TV read the newspaper or go out for a walk.
Wait a second. Does that mean that in your position, you are actively thinking about trying to negotiate the settlement down to something below a tank of gas because you know I'm not going to.
Really? All the time. Because in some cases, if Jerry can negotiate some of the payouts below a tank of gas, he can be pretty sure a huge chunk of that money is going back to his client.
And the tank of gas rule and another factor that might stop people from claiming their settlement is the way the claim notice is delivered in the first place, which you know this makes sense because think about what started this whole thing for us.
My shutter fly email that was so sketchy, I almost deleted it.
Are you as a representative of businesses in these aware of the fact that if these things come by email, they might look like a scam and people will think that they're a scam.
Not only that, but they get caught in spam folders.
I never even get read. Do you prefer to have an email notice because you know it could get caught in spam or be viewed as something people shouldn't click on?
Not necessarily. It depends on who the membership of the class are.
They're age, they're occupation, the area of the country.
No two cases are alike, but it's a factor.
And one of the factors I've been taking into consideration and balancing it against good old fashioned US mail.
So these factors, the amount of money, the method of notification, also how long that notification letter or email should be and how quickly you need to respond.
All of that stuff gets hashed out during the settlement process.
Jerry is there pushing for stuff that will be better for his company, his client.
The other attorneys are there pushing back trying to get stuff that's good for the class.
But there's always that governor of the court looking at and saying is this fair and appropriate.
And so they're generally trade-offs.
Instead of a 15 page notice that somebody might be intimidated by and not want to read, I might agree to a shorter notice.
But in return, I'd want a very short response date.
To be clear, it's not like Jerry can demand whatever he wants in this negotiation.
There are guardrails around this stuff.
Yeah, there's a big old federal rule about class actions.
And it says that these notices must, quote, clearly and concisely state in plain, easily understood language.
A whole bunch of stuff, like when you need to respond by who counts as a member of the class.
And what exactly you're agreeing to if you decide to join the class.
And you must give people a reasonable amount of time to respond to a settlement notice.
In the end, it's hard to know exactly what gets us to respond to these class action notifications or not.
But what we do know is that we do not respond to them often.
Jerry says the average is like 5 to 15% depending on the type of case.
But he's seen cases where it was as low as 1%.
Now, I asked Jerry to take his company defense hat off for a second.
And tell me what advice he would give someone when they get a claim notice in the mail.
And he told me, do not put off the decision.
At the very least, read the bold scripted parts of the notice, make note of the return date, and do not miss the deadline.
And so if you were my brother, sister or a son or daughter and I say you get it in the mail, touch it once, deal with it once, fill it out the day you get it, turn it around, send it in if you're really interested in participating.
Because you do not have to participate.
Just because someone sued on your behalf does not mean you have to be part of the class.
If you take a settlement, you are saying I have no further grievances on this front.
I will take my settlement and go away peacefully.
Right, but you could also opt out of a settlement.
Maybe you're not happy with the settlement.
Maybe you want to pursue your own action.
Maybe you simply don't agree that you are wrong to the first place.
But what you need to know is that if you do not take the settlement and do not opt out, like if you don't do anything because maybe you've missed the deadline or didn't see the notice, well the way most class actions work is that you are also waving your rights and saying that you will go away peacefully very likely without any settlement at all in that case.
Yet this is why there are those rules about settlement notices.
That notice is everything.
People need to see it and respond to it.
Or else, surprise, your rights have been waived.
Which unfortunately brings us back to my settlement with Shutterfly.
I called the claims administrator.
Wasn't allowed to record, but on that phone call, I learned that the scammy looking email with the Pidily $5 voucher.
That was like a consolation settlement prize.
Apparently months earlier, there was another email, which was the original settlement notice letting me know that the big thing I could have claimed was 25 real United States dollars.
Not a voucher cash money.
I don't know. I must have deleted that email and now the claim deadline was way gone.
Wait, really? Same thing apparently happened to Willa and Erica.
I could have gotten 25 bucks out of this.
That could have been like a whole Shutterfly product.
Now on one hand, it is frustrating that we all deleted an email worth $25 apparently.
On the other hand, this system can be a little frustrating.
Like unbeknownst to us, there was a team of attorneys fighting for us.
Did we agree with the fight?
Did we disagree? Were we happy with the settlement unhappy?
Theoretically, we do get a chance to weigh in, but that chance came in the form of an email back on November 7th, I am told, with the subject lined legal notice of class action settlement.
One email that all three of us apparently missed and to some degree, that was basically our only chance to claim the money or opt out of the settlement.
And honestly, we're lucky we get anything at all.
That $5 voucher, I told Erica and Willa, we may as well use that.
So, so I've mocked up a design that I think we should use for the $5 vouchers.
Okay, so the text is, I was in a class action and all I got was this lousy mug.
I love it. I love it. And then as Willa, a little cat for you, a little cat.
Oh my gosh, I am honored.
Of course, then we looked at how much a mug costs.
So this is the thing. They start at $14.99.
Oh no, oh $14.99. Okay, okay, maybe not, maybe not mug.
Well, yeah, photo magnets are $7.98.
I see Post-it notes for $6.98.
Interesting. Post-it notes are good though.
We could get Post-it notes.
We could get Post-it notes.
Yeah. Those class action post-its are scheduled to arrive in six to nine days.
It was the cheapest shipping.
And fun twist in between looking at the Post-it notes and buying them, Shutterfly did offer a $1 off sale.
This episode was produced by James Sneed with help from Sam Yellow Horse Kessler.
It was edited by Jess Zhang in fact checked by Seattle Hortes.
Engineering by Sina Lafredo.
Alex Goldmark is Planet Money's Executive Producer.
I'm Nick fountain and I'm Kenny Malone.
This is NPR. Thanks for listening.
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Their story is the newest series from CBC and NPR's Embedded.
It's called Tested. Listen wherever you get your podcasts.
