Starting next week, several big retailers, including Macy's and Nordstrom, will distribute $175 million worth of free high-end cosmetics to shoppers who bought certain products as part of a class-action settlement alleging that the stores planned to fix prices, according to the Wall Street Journal's Law Blog.
Class members can pick up only one of the cosmetic products they purchased between May 29, 1994 and July 16, 2003 from high-end retailers as part of the settlement. UPDATE: A New York Times reporter checked out the scene on January 20.
Why aren't the lawyers paid in fancy lotions as well? Every year in California, there are many class actions where the class members receive coupons for discounted products (or, in this case, free products), but the lawyers receive millions of dollars. In this case, the attorneys requested $24 million and the defendants agreed to pay up to that amount. The products are available on a first-come, first-served basis, so class member have to get to a participating store as soon as possible after January 20, before the store runs out of products.
This case settled, but the defendant companies admitted no wrongdoing. Although this is a federal case, it is a good example of why California law regarding class actions needs to be changed. Once a class has been "certified," the case is allowed to proceed. Most defendants feel they must settle the case because of the potential exposure to the defendant organization and the large number of people in a class action lawsuit, after certification. This is why cases settle -- with the lawyers receiving millions and the class members receiving pennies (or Sarah Jessica Parker's Lovely shower gel, if they show up to Macy's in time).
California should change its class action law to allow defendants the right to appeal that all-important class certification decision. This change would lead to greater fairness in class action lawsuits.