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Home > Professional Liability/Errors & Omissions Insurance > News settles class-action lawsuit


Popular networking website recently agreed to a settlement for the class-action lawsuit filed against it from 2009.

The case's plaintiffs claimed the site was deceptive, tricking several users to purchase gold premium memberships by sending members email ads. According to the plaintiffs, these emails allegedly told their recipients they were being sought out by former schoolmates.

As part of the settlement, approved by a federal judge, the website, owned by United Online, installed a pay out cap of $2.5 million to be paid to those affected. Currently, the site has 60 million users, meaning if each users puts in a claim, they would be rewarded just four cents each.

"In short, the revised settlement will provide meaningful cash relief only if all but a minuscule fraction of class members fail to make claims," U.S. District Court Judge Richard Jones in Seattle wrote. "This is a significant shortcoming."

The original settlement agreement called for each of the site's 3.16 million premium members to receive $3, however, the $2.5 million cap has changed that.

The case highlights the importance of companies using professional practices, as actions can be misconstrued and result in expensive legal fees regarding professional liability. 

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