Class Action Promotion Sites and Free Media: The Business of Making Claims Go Viral

Class action lawsuits are a much bigger risk today than they were 30 years ago. The internet has completely changed how consumers gain awareness of class action lawsuits and how they file claims for settlement benefits. As a result of these changes, class sizes have grown exponentially. In years past, known class members received direct notice, via mail, of their right to file a claim. Additionally, claim notices and filing instructions might be posted in one or two relevant print publications. For many consumers, filing a claim was more trouble than it was worth. Today, scores of websites and social media groups exist for two key purposes: (1) notifying the public of available class action settlement payouts; and (2) providing a quick and easy portal for filing claims. The impact of these sites is undeniable. For example, in one recent case against a supplement manufacturer, of the 44,000 consumers who filed a...

12 March

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Class Action Litigation Uncertainty: The M&A Killer

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It is no secret that class action lawsuits can have disastrous effects on mergers and acquisitions. One need look no further than the news to meet this point. In 2003, for example, famed environmental activist Erin Brockovich filed a class action lawsuit against Wainoco, a subsidiary of Frontier Oil Corp. At the time, Frontier was a party to a merger agreement with Holly Corp. worth $450 million. When news of the class action broke, Holly Corp. backed out of the merger, citing concern over the impact the suit would have on Frontier’s stock prices and overall financial condition. That situation is not unusual. Just this year, Tribune Media backed out of a planned merger with Sinclair Broadcast Group. Though that merger fell apart for several reasons, the fact that Sinclair was defending three class action lawsuits played a role in the deal’s demise. The truth is, class action lawsuits form a giant wall...

28 April

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When Settlement Claims Exceed the Fund

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Experienced class action attorneys know that predicting settlement response rates is anything but an exact science, and it is particularly difficult in today’s environment, with social media and settlement promotion sites. Any class action settlement can go viral, causing unpredictably high claim rates and putting companies at risk of exceeding their settlement fund....

14 April

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Settling Class Actions, from the Defending Company’s Perspective

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in Blogs & Articles, Uncategorized

While class counsel has its own objectives when it comes to settling class action lawsuits, the defending company has fundamentally different analyses. First is whether it should settle the case at all, as there are often business reasons not to do so. For example, the company may not want the reputational hit, to invite regulatory scrutiny or to set a bad precedent by settling....

class action lawsuit Tag

Class Action Promotion Sites and Free Media: The Business of Making Claims Go Viral

Class Action Litigation Uncertainty: The M&A Killer

When Settlement Claims Exceed the Fund

Settling Class Actions, from the Defending Company’s Perspective