[...] I think these lawsuits are nothing more than a shakedown for cash. Even unmeritorious class action lawsuits are expensive to defend, so the plaintiffs’ lawyers can exploit those defense costs for their personal largesse. They can make this argument to defendants: settle with me for a fraction of your total expected defense costs, and we’re both better off (defendants save some defense costs, plaintiffs’ lawyers grab some personal loot).
In particular, I’ve been trying to figure out why the plaintiffs (and a largely overlapping group of plaintiffs’ lawyers) filed two separate but virtually identical lawsuits. However, it does make sense as part of a shakedown. By opening up two battlefronts, the plaintiffs increase Yahoo’s defense costs, which should increase the incentive to settle (and the dollar value of a settlement).
It may be cheaper for Yahoo to settle than fight, but I hope Yahoo doesn’t reward the extortionists. Extortion shouldn’t pay, and I hope the plaintiffs find this out the hard way.I have said this before but this is precisely why the UK tradition of awarding costs works. Costs are not automatically awarded but they can be awarded at the discretion of the judge and typically an award of costs makes clear whether the losing party had a decent case or not. I believe that having the option of an awards of costs that required the losing lawyers to pay up would go a long way to reducing the "ambulance chasing" reputation of american lawyers. In the American system there is no downside other than their time for lawyers (and their clients) to file suits in "no-win no-fee" cases. There are undoubtedly other reasons but I know that from personal experience that defendants in this sort of case really do figure out that it is cheaper to settle for a relatively small amount rather than take a case to court where they have no assurance of winning and where even if they do win they don't get any recompense for the time and money they have spent defending themselves.