Recently, I received a settlement check for $27.50 for some class action suit regarding my cable provider.  The case was Seale et al. v. Altice USA, Inc. et al, Docket No. MER-L-618-23 Superior Court of the State of New Jersey, Mercer County in Trenton, New Jersey

Over the years, I have received similar checks (some as low as $5 or a coupon on future services) for a variety of items. This time, I decided to investigate the payouts further.  I am not here to discuss the merits of the case—pro or con. Let’s just look at the math.

From the website https://optimumsuddenlinkfeesettlement.com/:

To settle the case, Defendants have agreed to establish a Settlement Fund valued at up to $15,000,000 (depending upon the number of valid claims filed). Class Members who file valid claims will receive between $10.00 and $27.50, depending on two things: (1) whether the Class Member is a current or former customer; and (2) whether the Class Member paid a Network Fee, TV Fee, or both. These amounts will be decreased on a pro-rata basis if the Settlement Fund is not sufficient to pay all claims after deducting any Court-approved amounts for the cost of settlement administration, attorneys’ fees and costs, and incentive awards to the class representatives.

The lawyers who brought this lawsuit (“Class Counsel”) will ask the court for attorneys’ fees and costs not to exceed 33.33% of the Settlement Fund (i.e., $4,999,500), and incentive awards totaling $80,000 for the eight class representatives who represented the Class in this case (i.e., $10,000 each).

Soooo, of the $15,000,000:

1. The lawyers get $4,999,500. 
2. The lead plaintiffs (there are eight) each get $80,000.
3. This leaves a gross amount of 15,000,000 – 4,999,500 – (5 x 80,000) or, $9,600,500 left for the rest of the “class”.
4. There is also a reference to a deduction for the cost of settlement administration. I have no idea what this is—let’s estimate $600,500 to make the pot for the rest an  even $9,000,000.
5. $9,000,000 divided by, say, an average of $18.75/account (the average of the ends of the payout range) results in about 480,000 class members.

So, theoretically, all participants were “hurt” or “injured” equally.  However, the only “winners” are the lawyers – and the 8 lead plaintiffs (some participants were more equal than others).  Some food for thought:

1. The case involved three separate class action suits initiated in a relatively short period of time: NJ, CA, and WA. 
2. In the filings, all three cases filed motions to compel arbitration.   There was no intention of going to trial.  Going to trial runs the risk of losing.  It is more profitable to get a settlement. And companies agree to that because trials cost a lot to defend, and I guess the settlement can be considered a cost of doing business. 

Justice was served.