Court Awards $2 Million in Legal Fees for Netflix Class Action

Attorney fees were about 22 percent of the settlement, valued at $7.3 million
A California appeals court has awarded $2 million in attorney fees to Gutride Safier, a San Francisco class action law firm, for its representation of Netflix subscribers suing the online movie rental company for false advertising. The California Court of Appeal, 1st District, also affirmed the settlement agreement, which provided more than 697,000 class members with one month of free DVD rentals or service upgrades. The settlement also required Netflix to change its advertising practices.

Leigh Jones

The National Law Journal

2008-04-23 12:00:00 AM

A California appeals court has awarded $2 million in attorneys fees to Gutride Safier, a San Francisco class action law firm, for its representation of Netflix subscribers suing the online movie rental company for false advertising.

The California Court of Appeal, First District, also affirmed the settlement agreement, which provided more than 697,000 class members with one month of free DVD rentals or service upgrades. The settlement also required Netflix to change its advertising practices.

In granting the fee award, the appeals court determined that the lower court properly calculated the attorney fees, which were about 22 percent of the settlement, valued at $7.3 million.

The class action alleged that the company's advertisements of unlimited DVD rentals and one-day delivery for a flat monthly fee were false.

Specifically, the lawsuit asserted that the more quickly customers watched and returned movies, the more slowly Netflix sent the next ones. It further claimed that Netflix's goal was to limit monthly usage and keep its costs down.

Class counsel representing the lead plaintiff in Chavez v. Netflix, Inc., No. A114334, were Adam Gutride and Seth Safier, both former litigators at Orrick, Herrington & Sutcliffe. Representing Netflix was Wilson Sonsini Goodrich & Rosati.