For the second time in less than nine months, Blockbuster is opting to settle class action lawsuits filed against the retailer over its late fee charges.
In the latest settlement, the nation’s largest video rental chain would pay as much as $9.25 million in court and attorneys’ fees and give away an undetermined amount in free rentals and discounts to clear 23 separate legal class-actions charging that its late fees have been excessive.
Blockbuster would not pay out any cash refunds to customers and would not change its “extended viewing fee” policy. That policy implemented more than a year ago allows customers to keep rentals an extra 12 hours — a two-evening rental started on Monday is due back at noon Wednesday, for instance — but charges them for a full additional rental period when the deadline is missed.
Those fees generated $203.2 million, representing 16.7% of the retailer’s $1.2 billion in total quarterly revenue, for the three months ended June 30, 2000, the last period for which Blockbuster broke out such information in its Security and Exchange Commission filings.
Blockbuster’s proposed settlement has been “preliminarily approved” in two cases filed in Jefferson and Harrison counties in Texas. Company began notifying customers about the proposed settlement Friday through a nearly full page ad in USA Today, lengthy attachments to store purchase receipts and on Blockbuster’s Web site (www.blockbuster.com).
Settlement would provide plaintiffs a set amount in coupons for free Blockbuster rentals and other store discounts based on when and how much they were charged for what the retailer calls “extended viewing fees.” Customers contesting late fees charged between Jan. 1, 1992, and April 1, 2001, are included in the settlement class.
A customer that claims $30 or less in extended viewing fees incurred between 1999 and 2001, for example, would get two free catalog rentals and five $1 discount coupons.
Last September Blockbuster reached a similar settlement over a late-fee suit filed in Michigan. That settlement was valued at $5.4 million. At the time, the retailer vowed to vigorously fight other suits going forward.
If the Texas settlement is accepted, the retailer expects it will be extended to include the remaining actions outstanding against Blockbuster in other states.