SAN FRANCISCO (CN) – A federal judge refused to approve a settlement to class claims that McAfee and an advertiser conspired to rook customers and share their billing information.
U.S. District Judge Lucy Koh, who said the settlement agreement “does not pass muster,” found it impossible to differentiate between class members who actually downloaded the advertiser’s software and those who did not.
The 2010 lawsuit alleges that McAfee partnered with online advertiser Arpu dba TryAndBuy.com. After customers bought McAfee’s anti-virus program, an Arpu ad for a separate product would pop up. Customers say they clicked the “Try It Now” pop-up and unwittingly bought the Arpu product called PerfectSpeed because they thought clicking was a necessary step toward downloading McAfee’s anti-virus software. Arpu charged $4.95 a month for PerfectSpeed after a 30-day free trial, using the credit card information already on file with McAfee, according to the suit.
Class members who did not download the software reached a $1.2 million settlement with McAfee and Arpu in July 2011. A separate class of customers who downloaded Arpu’s software never reached a final agreement.
“It is not even possible to know, therefore, what percentage of the settlement class is entitled to recover the settlement benefits, and what percentage is not entitled to recover anything under the terms of the agreement,” Koh wrote. “Fundamentally, the situations of the two subclasses are distinct because they raise different claims. Those who did not download the Arpu software claim that they were charged for something that they never received. In contrast, the downloaders are in a different position.”
“Some class members may have been misled into believing that the software was provided by McAfee; never intended to purchase the software despite the download; or did not intend to transfer their credit or debit card information to a third party,” she added. “On the other hand, other downloaders may have knowingly and purposefully downloaded the Arpu software with the intention to pay the monthly charges after the 30-day free trial period ended. Thus, the claims of the subclasses are not common.”
Koh also found that the class representatives, Melissa Ferrington, Cheryl Schmidt, Christopher Bennett and Christi Hall, all belong to the subclass that did not download the Arpu software and do not represent the claims of the entire class.
“Because the class representatives are entitled to recover under the terms of the settlement, while the remaining class members may not, the claims of the named plaintiffs are not typical of the claims of the class as a whole,” she wrote.
Koh rejected the non-downloaders’ claims that it was fair for the others to receive nothing from the settlement.
“While the court agrees that the claims of the downloader subclass are relatively weak, that does not necessarily mean that the downloaders suffered no compensable harm,” she wrote. “The downloader subclass may still have claims arising out of the McAfee program that will be extinguished through the class settlement here. The claims of the downloader subclass are not so meritless that releasing the claims for no consideration is fair and reasonable.”