Patterico's Pontifications

4/26/2011

Inevitable: The Apple Class Action Suit Has Begun

Filed under: General — Aaron Worthing @ 6:53 am

[Guest post by Aaron Worthing; if you have tips, please send them here.  Or by Twitter @AaronWorthing.]

“This’ll be interesting,” Glenn Reynolds wrote this morning, linking to this story.  Here’s the rundown.  Last week I told you about how Apple was secretly tracking users movements, an appalling invasion of privacy.  So this morning, Reynolds linked to this story about the lawsuit that had been filed:

Two Apple customers have filed a lawsuit accusing the Cupertino, California, company of committing violations of computer-fraud laws by recording location data of iPhone and iPad customers.

Vikram Ajjampur, an iPhone customer in Florida, and William Devito, a New York iPad customer, filed the suit in federal court April 22 in Tampa, Florida.

“The accessibility of the unencrypted information collected by Apple places users at serious risk of privacy invasions, including stalking” (.pdf), the lawsuit states….

Ajjampur and Devito are seeking class action status to represent U.S. iPhone and iPad customers. The complaint seeks an injunction requiring Apple to disable the data collection in a software update, and it also seeks damages for violations committed.

(Emphasis added.)  Well, I will have to disagree with Mr. Reynolds.  The most likely outcome here is that these class representatives will secure benefits primary to themselves, their lawyers will make millions, and we the people will be lucky if we get that update they are talking about.  It will not be interesting, but the latest tediously predictable example of abuse in the class action system.

Consider, for example these recent class actions.  For instance, there was a controversy a few years back when someone discovered some discarded game code opening up a (terrible looking) sex game in Grand Theft Auto: San Andreas, which you could only find if you actually hacked the game.  This apparently horrified parents who were apparently okay with the usual action in the Grand Theft Auto series, which includes giving players the option of having sex with a prostitute in a car (complete with rocking car and moans), and then running over said prostitute and collecting the money you just gave her for the sex.  That resulted in a settlement giving up $35 in damages per customer if they seek it (at last reporting, none had).  Meanwhile, the class representatives were paid almost $25,000 for their trouble and the lawyers were paid $1 million.

Or take this one.  Did you know that loud noises hurt your ears?  Well, according to this suit, the ordinary reasonably prudent person doesn’t know that and thus turns up their Bluetooth to 11, because they are not properly warned.  The class got nothing, a few charities got some money, and representatives sought $12K and their lawyers sought $850K.

Seriously, follow Overlawyered for a month, and you will see many cases like this.

The point is that class actions are the dirtiest area in law.  If you want to talk about lawsuit abuse, there is the poster child.  I am not sure if they should be abolished altogether, but at the very least this is an area in serious need of reform because 1) it encourages lawsuits on the most ridiculous theories and 2) even if there is merit, the vast majority of the aggrieved get little in compensation.  Indeed, we are unlikely even to get some fun discovery on the subject, here–they will most likely settle before it comes to that.

So not interesting, but a tedious example of how broken the class action system is.  At least that is my prediction.

[Posted and authored by Aaron Worthing.]

28 Responses to “Inevitable: The Apple Class Action Suit Has Begun”

  1. How the hell is it that I didn’t have Overlawyered bookmarked?

    Scott Jacobs (98018d)

  2. It seems the only people that make money in a class action suit are the lawyers.

    JD (7cb36b)

  3. My cell phone manual warns: “Never place your phone in a microwave oven as it will cause the battery to explode.”

    Brother Bradley J. Fikes, C.O.R. (c30fbb)

  4. Brother

    a few years back i saw a top 5 whackiest warnings on a product. I always say with those things, is that this is what generally happens with them.

    Someone actually does whatever they are warning you not to do. then someone sues over it. whether the case has merit or not, their corporate counsel says to the company, “put a warning label on the product to make sure everyone knows not to do that again. I know its stupid, but if you warn them, they can never sue you again.”

    So when you see a crazy warning sign, take a moment to imagine the person doing that.

    So i have seen warnings like “do no use snowblower on roof of house.” now picture someone doing that… and getting hurt. its funny! especially if you imagine it wiley e. coyote style.

    the lamest one i ever saw as on a fishhook. warning: harmful if swallowed. they should add “warning: if not harmful if swallowed, then its broken.”

    Aaron Worthing (e7d72e)

  5. I would be surprised if the service contract doesn’t specifically allow Apple to do this. “Information may be collected from your use of the product that will help us better understand your usage, please see our privacy policy for details on how we value and protect your information.” or some such. And if you look at the privacy policy it will turn out that there really isn’t any protection, just vague promises to be careful and a warning that Apple will cooperate with police.

    Soronel Haetir (b1adf2)

  6. Women, minorities, children, and the elderly disproportionately effected.

    JD (7cb36b)

  7. In normal tort action, the lawyer has an incentive to do well for the client because the better the settlement for the client, the larger the lawyer’s fees. In class action lawsuits there is no similar incentive to do well for the supposed clients because what the lawyer gets in unrelated to what the clients get. The party sued has an incentive to pay the lawyers to sell out the clients, and they often do. That is why class action is the dirtiest area of law–it is a great example of the what economists call the agency problem.

    nohype (428b10)

  8. “The point is that class actions are the dirtiest area in law”

    Definitely.

    We need more kids blowing out their hearing with Bluetooths.

    I like the way class action lawsuits work. It’s the only thing that gets the attention of asshole companies doing bad things to consumers.

    Do you have a better idea?

    jharp (f8a6a3)

  9. Years ago, I received a letter from the Special Master of the Denny’s discrimination settlement. I should get my paperwork in pretty quick if I wanted my money.
    Upon inquiry, I discovered that my file was in the wrong file pile. I was really a witness. Turns out, I witnessed this appalling act of discrimination at a Denny’s in Flagstaff, at the age of three. Had never been in AZ at the time. Got the names of the other four witnesses and contacted three. None of them had ever heard of it. I told Denny’s. They seemed resigned. Didn’t even get a coupon for a Grand Slam for my efforts.

    Richard Aubrey (cafc94)

  10. Aaron

    On a vote of 17 to 9 we wish you a speedy recovery :)

    EricPWJohnson (5b75a5)

  11. So will the left get angry?

    DohBiden (15aa57)

  12. I would be surprised if the service contract doesn’t specifically allow Apple to do this.

    Good point. Does ANYONE read those?

    I think I know the lawyer in this class action lawsuit — he may have interned where I work a while ago. A relatively young guy.

    Kman (5576bf)

  13. I’m part of a class action suit where the credit card companies were f*cking consumers on foreign currency exchange rates.

    It has gone on a long long time and I have yet to see a dime.

    I had no idea I was cheated and the $500 they f*cked me out of would not be worth chasing without class action status.

    Again. It’s the only thing these asshole crooked companies will listen to. Hit them in the checkbook.

    Thank God for class action lawsuits.

    jharp (f8a6a3)

  14. Someone actually does whatever they are warning you not to do. then someone sues over it. whether the case has merit or not, their corporate counsel says to the company, “put a warning label on the product to make sure everyone knows not to do that again. I know its stupid, but if you warn them, they can never sue you again.”

    A personal injury lawyer I know jokes that the shortest ladder you can buy is 6 ft long, because otherwise they couldn’t fit all the warning labels.

    Some chump (4c6c0c)

  15. There are a lot of class actions that end up being collusive between the defendant corporation and the plaintiffs’ counsel. The settlement will pay the plaintiffs’ counsel some juicy amount of legal fees but the actual settlement terms for the affected class will end up being something that enures to the benefit of the corporation, like coupons that just increase their business.

    SPQR (26be8b)

  16. I blame human overpopulation for this

    /Sarcasm off

    DohBiden (15aa57)

  17. The lawyers’ compensation should be limited to a small multiple of the average compensation earned by one member of the aggrieved class.

    That would stop these lawsuits in a hurry, unless the hurt was truly significant.

    Rohan (bbdaa6)

  18. The lawyers’ compensation should be limited to a small multiple of the average compensation earned by one member of the aggrieved class.

    That would stop these lawsuits in a hurry, unless the hurt was truly significant.

    Comment by Rohan — 4/26/2011 @ 9:48 am

    And here I thought you all here were “free market” advocates.

    Yet you want our politicians deciding how much someone should earn? And not a jury of ones peers?

    You people make no sense.

    jharp (f8a6a3)

  19. Does ANYONE read those?

    Generally it’s a good idea to read a contract before you agree to it.

    For my end, I will read any terms and conditions unless the terms have been out there for a while, in which case, I will google to see if there’s something controversial.

    In this case, I seem to recall many talking about Apple’s terms because they included some kind of use of tracking data.

    However, I am sure the terms did not include agreeing to leaving this data unsecured for anyone to take off your device. I’m not sure if that matters legally, but it is the real problem.

    Dustin (c16eca)

  20. Also, it’s amusing that Kman claims to be friends with the lowest form of lawyer. The lawyer who screws his own clients (in this case, the entire class of iphone users). They don’t want a donation to the human fund or a $2 credit to itunes, and they certainly don’t want Apple to lose millions and hundreds of hours dealing with a crooked class action litigant.

    Yet the lawyer claims to represent them. IT’s a fundamental breach of what a lawyer is supposed to be. In all such cases, the lawyer should not be paid more than half the compensation of average class member.

    Dustin (c16eca)

  21. Remembering something about attorneys general and class action cases given to certain donors upon election. I always avoid those offers of ‘justice’ for the reasons you list.

    Hack in the Box is another interesting site.

    Vermont Neighbor (ae55d7)

  22. Everyone has a good joke about lawyers, however I consider “Big Law’ to be one of the most serious problems the U.S. has to deal with. The question is how? With lawyers infesting our capitals and writing laws the ordinary person cannot understand, where do you start? I am sure there are many smart people who read this blog, does anyone have an idea?

    Marco (f0dfe3)

  23. I haven’t heard one of you clamor for less government to solve the problem.

    Why not?

    Is it that you need the nannny state to protect you from big bad Apple?

    Shouldn’t the invisible hand of the market take care of this? If you don’t want secretly tracked… ….don’t do business with Apple.

    Is that how it goes?

    jharp (f8a6a3)

  24. With lawyers infesting our capitals and writing laws the ordinary person cannot understand, where do you start?

    There’s a reason these guys give so much money to democrats. Where to start is replacing as many democrats in power with anybody but democrats. A clear, fair legal system is the enemy of the unscrupulous lawyer.

    Dustin (c16eca)

  25. Your right the compensation in these consumer class action suits is pretty skimpy, but you seem to be ignoring deterrence of bad behavior as a justification for the current system. If Apple looses the suit it will stop collecting my data, and the mere filing of the suit will discourage them and other companies from doing similar things in the future. Other than paying class action lawyers (and paying them well, because they need to compete against Apple’s lawyers who are likewise going to be well paid) how do you propose to get people to invest the time and money necessary to stop business practices that rip people off by the millions but by pennies so no 1 person has a real reason to sue.

    TomO (a524c5)

  26. “We need more kids blowing out their hearing with Bluetooths.

    I like the way class action lawsuits work. It’s the only thing that gets the attention of asshole companies doing bad things to consumers.

    Do you have a better idea?”

    Yes. Don’t do stupid stuff.

    Ben S (1f3e77)

  27. It’s the only thing that gets the attention of asshole companies doing bad things to consumers.

    What about competitors marketing their products that don’t do these things?

    Most of the time, it’s not something the customer is that concerned with.

    If the only thing that can change the company’s behavior is a class action, I bet the behavior isn’t serious. If it’s serious, what you really need is a competitor to come along with a better option.

    Dustin (c16eca)


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