Are Claims in Class Action Lawsuits Unethical If Claimant Suffered No Damages?

Class action lawsuits affect all industries — including airlines, the receiving of calls as the result of telemarketing of cruise companies, and other aspects of travel. They are usually formed when a person believes that he or she has been wronged by a company; and attorneys find that other consumers underwent a similar experience. In a class action lawsuit, one of the parties is a group of people who are represented collectively by a member of that group…

Are Claims in Class Action Lawsuits Unethical If Claimant Suffered No Damages?

…but what happens more often than not when the defendant — which is typically a large multinational corporation — agrees to settle the class action lawsuit, the group of people are usually awarded minimal compensation. The defendant may settle despite not admitting to any wrongdoing, as legal challenges can be costly — even if the defendant did nothing wrong — and are usually less expensive to simply settle…

…and although that compensation may be in the form of a coupon worth a few dollars or a cheap replacement part, that could still potentially cost the defendant millions of dollars.

This is where the question of ethics comes in: if someone decides to participate in claiming compensation from the settlement of a lawsuit despite not having suffered any damages, is that action unethical?

For numerous class action lawsuits, that conundrum is not an issue, as proof of damages may be required — but plenty of class action lawsuits simply rely on the good faith of people abiding by the honor system.

A Whopper of a Story

Burger King Whopper

Photograph ©2017 by Brian Cohen.

On Thursday, July 27, 2017, I personally tested the claim of Koleta Anderson, who used a coupon at three different Burger King restaurants — one each in Virginia, Maryland and the District of Columbia — on three different days to purchase one Croissan’wich and get another for free. The alleged result was that she paid up to $3.51 more for the Croissan’wich with the coupon than when she bought one without the coupon — but the Croissan’wich purchased with the coupon was never the same price as the one purchased without the coupon…

…but the only result I experienced was that a Whopper sandwich increased in price — which, of course, Burger King is entitled to do — as well as consume two substandard sandwiches which I would have rather not eaten. I had not experienced any inexplicable discrepancy in price.

The class action lawsuit was settled a few months later. “Burger King customers who bought Croissan’wiches using a buy one, get one free coupon could get $5 in cash or a $2 gift card from a recent class action settlement”, according to this article written by Paul Tassin for Top Class Actions. “Class members who submit receipts that show they made a qualifying Croissan’wich purchase using a buy one, get one free coupon can receive a $5 payment for each qualifying receipt. Class Members who do not provide qualifying receipts can receive a single $2 Burger King gift card.”

The deadline for filing a claim has since expired back in January of this year; but anyone without proof of damages could theoretically have filed a claim and received a gift card worth two dollars for use at a Burger King restaurant.

Not On the “Up & Up”

“If you bought Up & Up Flushable Wipes between April 18, 2010 and October 31, 2014 you can fill out the short claim above to get up to a $27 Target Gift card or 20 packs of wipes”, according to this article written by JJ Eleff of Dan’s Deals pertaining to a more recent class action settlement whose deadline for claims of damages is Friday, September 7, 2018.

Although you do not need to prove that you purchased the wipes during the eligible period of time, you do need to certify that you have indeed bought them…

…but who is going to spend the time, money and effort to disprove your certification for compensation in the form of a gift card worth a mere $1.35 — or even if what Daniel Eleff and JJ Eleff would likely call a chazer who decides to go for as much as he or she can get out of this settlement without proof of damages?

Summary

Aldo Leopold has been credited with this quote that “Ethical behavior is doing the right thing when no one else is watching — even when doing the wrong thing is legal.” My version of that quote is that at the end of the day, I can put my head to the pillow and sleep restfully knowing that I either did nothing wrong or tried to do what is right — regardless of what other people may think or believe.

Those who flout what could be considered the boundaries of ethical behavior can easily justify claiming compensation without experiencing damages by pointing out the perceived significantly disproportionate compensation which attorneys who handle the class action lawsuit for plaintiffs receive — but even if that was definitively and undeniably true, do two wrongs become a right?

One can also justify that a coupon or gift card could potentially mean an extra customer or purchase which otherwise might not have been realized. After all, how many people will go out of their way to head over to a Burger King and eat Croissan’wiches without ordering a drink or side menu item? The consumption of time, effort and gasoline already renders a gift card valued at two dollars not worth the trouble.

Regardless, many people would argue that the aforementioned justifications are still no excuse for claiming something with which the claimant was never entitled — that could include people who use corporate codes for significant discounts when they are not eligible to do so and people who knowingly take advantage of mistake fares — and that is the conundrum of the ethical question posed for this article.

If enough claimants who suffered no damages collect compensation anyway via numerous class action lawsuits, could that eventually contribute to the elimination of the ability of people who actually did suffer damages — but have no proof — to claim compensation in future class action lawsuits?

All photographs ©2017 by Brian Cohen.

One thought on “Are Claims in Class Action Lawsuits Unethical If Claimant Suffered No Damages?”

  1. A says:

    Yes, it is unethical if someone claims to be a member of the class and lies to get the compensation. That’s fraud. Most of the time it’s clear who was screwed over. People falsely claiming to be members of the class are not biggest threat to class actions, though. Class actions are constantly under attack by Republicans, by powerful corporations, and of course by defense lawyers.

    But they are vital and extremely important. Money has become an exceedingly powerful force in our elections, especially with there now being no limits on corporate donation (thanks to our pro-business, corporations-are-people-too supreme court). The good class actions can do is largely unseen. I think it was Ford who crunched the numbers and thought it would be cheaper to settle all of the potential claims when the pintos turned into fireballs when being hit from behind (cause serious burns and deaths) instead of recalling the cars. They did a cost-benefit analysis when lives and horrible deaths were at stake.

    When the economy crashed in 2008-2009, a lot of people, including myself, had taken advantage of low-interest-rates-for-life deals from Chase. During that time, Chase jacked up-and I mean doubled-the minimum payments due for a lot of these people. A lot of people couldn’t afford to pay double. Chase offered them a higher interest rate. That wasn’t fair. Sure, a lot of people could go to court and sue on an individual basis (actually, not so much anymore with mandatory arbitration), but how many actually would? And how many lawyers are going to take that case? Fortunately, there was a class action to punish Chase and hopefully deter them. And those greedy plaintiff lawyers? Well, first of all, they are often going against multibillion dollar corporations and the best lawyers money can buy. And the plaintiff lawyers are risking a ton of work and money laying the groundwork for this stuff. And they get nothing-absolutely nothing-if the case is dismissed. Meanwhile, all of the people who are complaining about the lawyers getting paid to much and the class members getting too little just sit around a wait for a check.

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