Blockbuster Inc. is offering to settle 23
class-action lawsuits by customers claiming they've paid inflated
fees for overdue video rentals and that the company profited
unfairly as a result.
All customers charged extended viewing or non-return fees at its stores between Jan. 1, 1992, and April 1, 2001, will be eligible for refunds if Blockbusters offer is approved by the federal court. The offer includes certificates for free video rentals and certificates for $1 off nonfood items.
Total Value: $450 Million
Blockbuster also is proposing to pay a total of $9.25 million to the plaintiff's attorneys, which it said will constitute about 2 percent of the face value of the certificates available under the settlement. That would make the total settlement approach $450 million. Dallas-based Blockbuster, the largest video-rental chain in the world with about 7,700 stores, began running ads in newspapers last week and has posted the offer on its Web site. To qualify, customers must fill out and return claim forms — now being attached to store receipts — before Dec. 15. The certificates will be issued and can be redeemed between Jan. 15, 2002, and May 15, 2002. "Defending lawsuits like these requires both time and money, so in the best interest of our company we've decided to settle the cases," Ed Stead, executive vice president and general counsel, told The Miami Herald in today's edition.
Late-Fee Policy to Remain in Place
The agreement would settle class-action lawsuits filed by individuals in Jefferson and Harris counties in Texas which accuse Blockbuster of charging excessive "extended viewing fees" and changing its policy without first notifying customers. The video rental company has defended its practices and said the extended viewing fees will remain. A hearing is to be held Dec. 10 in federal court in Beaumont, Texas, to determine if the proposed settlement should be approved. Class-action status consolidates large cases, helps large numbers of plaintiffs sue a defendant more economically, and prevents similar plaintiffs from winding up with different results after trials. In September 2000, Blockbuster settled a class-action lawsuit filed by three Detroit-area residents. The agreement called for nearly 100 stores in southeast Michigan to issue coupons for free video rentals to members who incurred late fees. Those claimants are exempt from the latest proposal.