The judge ruled that the agreement was unacceptable for several reasons, so this situation seems unusual.
According to Reuters, a judge in the U.S. District Court for the Northern District of California rejected a settlement that Sony had approved in a class-action lawsuit concerning PlayStation Store credits. The plaintiffs claimed that Sony overcharged them for digital games distributed through the PlayStation Store monopoly, and Sony agreed to settle the lawsuit by awarding $7.8 million in PlayStation Store credits to millions of PlayStation Network users. However, the judge rejected the settlement for several reasons, including that coupon settlements like this one are generally undesirable.
“The motion failed to include an estimated recovery had the proposed class prevailed on each claim and failed to provide an estimate of the discount applied to the claims. Importantly, though the motion acknowledges that the potential damages were smaller than initially contemplated, it provides no estimated class recovery given that discovery. These shortcomings alone warrant denial of Cendejas’s motion for preliminary approval because they prevent the court from meaningfully assessing the fairness of the proposed settlement.
Any renewed motion for preliminary approval must include a chart setting forth the anticipated breakdown of the $7,850,000 settlement distribution, including estimated amounts for attorneys’ fees, service awards, costs, administrative expenses, and other payments. From the resulting net settlement amount, Cendejas shall provide a ballpark estimate or range of amounts to be distributed to each Settlement Class Member.
Furthermore, the settlement requires that class members receive compensation in the form of cash-value PlayStation Network (“PSN”) account credits. The court views these credits as settlement coupons, which are generally disfavored. Any renewed motion for preliminary approval must address the propriety of such coupons and whether the value and structure of the settlement are defensible,” the explanation said.
Sony denied any wrongdoing but said it was entering into the settlement to avoid additional costs and distractions from the litigation. Following this ruling, it remains unclear whether users will actually receive these PlayStation Store credits. A similar lawsuit has been filed in the UK, where the plaintiffs are seeking damages orders of magnitude higher than in the US case.
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