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Paypal Class Action

MMM,

Just received this from Paypal. Thought it was a hoax but a bit of research has indicated it’s valid.

Dear Stuart Low,

IF YOU OPENED A PAYPAL ACCOUNT BETWEEN OCTOBER 1999 AND JANUARY 2004,
YOU MAY BE ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT.

PLEASE READ THIS NOTICE CAREFULLY.

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION

In re PayPal litigation
Case No. CV-02-01227-JF (PVT)

NOTICE OF PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT

1. WHY DID I GET THIS NOTICE?
You have been sent this Notice because the records of PayPal, Inc.
indicate you are a current or former PayPal account holder. This means
you may be eligible to receive a payment from the proposed class
action settlement in the lawsuit In re PayPal Litigation, Case No. 02
1227 JF PVT, pending in the United States District Court for the
Northern District of California in San Jose. This Notice provides a
summary of the terms of the proposed settlement. It also explains the
lawsuit, your legal rights under the settlement, what benefits are
available to you under the settlement, and how to get them.

2. WHAT IS A CLASS ACTION?
In a class action, one or more people, called Class Representatives
(in this case Roberta Toher and Jeffrey Resnick), sue on behalf of
people who have similar claims. All of these people are members of the
Class. One court resolves the issues for all Class Members, except for
those who exclude themselves from the Class. United States District
Judge Jeremy Fogel is in charge of this class action.

3. WHAT IS THIS LAWSUIT ABOUT?
In early 2002, Plaintiffs Roberta Toher and Jeffrey Resnick filed
separate lawsuits against PayPal, Inc. These two cases were later
consolidated into one lawsuit in the United States District Court for
the Northern District of California, San Jose Division, entitled In
re PayPal Litigation, Case No. CV 02 01227-JF (PVT). The lawsuit
alleges that PayPal violated the federal Electronic Fund Transfer Act
(“EFTA”), 15 U.S.C. E 1693 et seq., including provisions requiring
PayPal to supply customers with information about dispute resolution
procedures and to follow certain procedures when investigating
complaints of unauthorized or incorrect electronic fund transfers.
For example, the lawsuit claims that PayPal did not provide account
statements in the manner required by the EFTA. The lawsuit further
alleges that PayPal has placed inappropriate restrictions or other
limits on customers’ accounts and engaged in other improper practices.
Based on these practices, the lawsuit asserts claims under California
state law for conversion, money had and received, negligence, and
violations of consumer protection statutes.

PayPal does not believe that it did anything wrong. In fact, PayPal
disputes that the EFTA, originally passed in 1978, applies to its
business. PayPal denies any and all liability for the claims alleged
in the lawsuit. The Court did not decide in favor of the Plaintiffs or
PayPal. Instead, beginning in the fall of 2003, the parties began a
series of settlement negotiation sessions mediated by United States
Magistrate Judge Edward Infante. Eventually, in November 2003, both
sides agreed to a settlement in principle. By settling their claims,
both parties avoided the uncertainty and cost of a trial. The
settlement provides money and other benefits to the Class. On June 11,
2004, the parties entered into a formal, written Settlement Agreement,
which is on file with the Court and available on the Internet at
https://www.paypal.com/settlement/. By entering into the Settlement
Agreement, PayPal is not admitting any wrongdoing. PayPal continues to
believe that it did not do anything wrong. The Representative
Plaintiffs and the attorneys appointed by the Court to represent the
Class believe that the settlement is fair to Class Members. By this
notice, the Court is not expressing any view on the merits of the
lawsuit.

4. HOW DO I KNOW IF I AM PART OF THE SETTLEMENT?
On July 12, 2004, Judge Fogel entered an order granting preliminary
approval of the settlement and certifying the following class for
purposes of the settlement: All Persons who opened a PayPal account
during the period from October 1, 1999 through January 31, 2004.
Excluded from the class are any judicial officer to whom the lawsuit
is assigned; PayPal and any of its affiliates; any current or former
employee, officer, or director of PayPal; anyone who resides in
Austria, Belgium, Denmark, Germany, Greece, Finland, France, Ireland,
Italy, Luxembourg, Portugal, Spain, Sweden, The Netherlands, or United
Kingdom; and all persons who timely and validly request exclusion from
the class pursuant to this notice.

Thus, if you opened a PayPal account between October 1, 1999 and
January 31, 2004, and are not one of the excluded persons listed
above, you are a member of the class.

5. WHO REPRESENTS ME IN THIS CASE?
To represent the class, the Court has appointed Plaintiffs Roberta
Toher and Jeffrey Resnick as Representative Plaintiffs and their
counsel of record as Class Counsel. The Court has also appointed the
following attorneys and law firms as Co-Lead Counsel:

A. J. De Bartolomeo
Girard Gibbs & De Bartolomeo LLP
601 California Street, Suite 1400
San Francisco, California 94108

Robert C. Finkel
Wolf Popper LLP
845 Third Avenue
New York, New York 10022

6. WHAT DOES THE SETTLEMENT PROVIDE?

A. Injunctive Relief
The settlement requires that PayPal consent to the entry of an order,
called an injunction, that mandates various changes to PayPal’s
business practices. PayPal has already implemented these changes. The
injunction includes PayPal’s agreement to comply with certain notice
and error resolution procedures of the EFTA, and to follow certain
procedures for limiting accounts and responding to and returning funds
to customers whose accounts have been limited. A copy of this
injunction can be found as Exhibit D to the Settlement Agreement,
entitled
“Form of Injunctive Order.”

B. Monetary Relief
Under the settlement, PayPal will pay $9.25 million into a settlement
fund, to be held in an interest-bearing account. The fund will be used
(1) to make payments to class members who submit valid claims before
the claims deadline; (2) to pay certain costs of giving notice to the
Class and of settlement administration, as approved by the Court; and
(3) to pay attorneys’ fees and expenses to Class Counsel in the amount
awarded by the Court. Class Counsel have proposed that, after deduction
of notice and administrative costs and Class Counsel’s attorneys’ fees
and expenses, the balance of the fund (“Net Settlement Fund”) be
applied in accordance with a written plan of allocation. (The following
explanation is qualified in its entirety by reference to the Plan of
Allocation attached to the settlement Agreement as Exhibit C, a copy of
which is on file with the Court and available on the Internet at
https://www.paypal.com/settlement/.)

1. Certain Definitions
Certain capitalized words are used in this part of the Notice to
describe the way in which the Net Settlement Fund will be allocated.
These capitalized words have the following meanings: (a) “Released
Persons” means PayPal and its past and present partners, affiliates,
predecessors, successors, assigns, parents, subsidiaries, officers,
directors, attorneys, and employees.

(b) “Fund Claimants” are class members who submit timely, valid claims
in accordance with the procedures described in this notice.

(c) “Dispute Resolution Claimants” are Fund Claimants who contend
that, prior to February 1, 2004, they:

(i) experienced or reported to PayPal an unauthorized or incorrect
electronic transfer to or from their PayPal account including, without
limitation, electronic transfers initiated by (a) the Fund Claimant;
(b) PayPal in connection with, among other things, chargebacks,
refunds, buyer complaints, PayPal’s Seller Protection Policy, Buyer
Complaint Process and/or Buyer Protection Policy; or (c) any third
party;

(ii) had access to their PayPal account improperly, incorrectly or
erroneously limited or restricted, in whole or in part;

(iii) made a request for information in connection with PayPal’s
restriction or limitation of the Fund Claimant’s PayPal account or
regarding an incorrect or unauthorized electronic transfer to which
PayPal did not respond at all or did not respond to the Fund Claimant’s
satisfaction. (d) “Statutory Damage Fund Claimants” are all Fund
Claimants who are not Dispute Resolution Claimants.

2. Statutory Damage Fund Claimants
The plan of allocation designates $1 million of the Net Settlement
Fund to a “Statutory Damage Fund,” to be distributed equally among all
Fund Claimants who are not Dispute Resolution Claimants. This means
that
if you are a member of the Class and do not fall within the definition
of
a “Dispute Resolution Claimant,” as set out above, you can make a
claim for a payment from the Statutory Damage Fund. The Statutory
Damage Fund provides compensation for potential statutory damages under
the Electronic Fund Transfer Act (“EFTA”), 15 U.S.C. E 1693 et seq.
Statutory damages under the EFTA are limited by law to no more than
$500,000 for any class of individuals claiming “the same failure to
comply.” Plaintiffs’ counsel contended in the litigation and for
purposes of settlement that PayPal was potentially liable for multiple
failures to comply, a position PayPal vigorously opposed.

The Statutory Damage Fund Claim Form requires you to provide certain
identifying information and sign a statement under penalty of perjury
authenticating your claim, which may be subject to verification by
PayPal’s records. To make a claim for payment from this fund, please
complete and submit the Statutory Damage Fund Claim Form available on
the Internet at https://www.paypal.com/settlement/ in accordance with
the instructions on the form.

3. Dispute Resolution Claimants
The balance of the Net Settlement Fund will be allocated for
distribution to Dispute Resolution Claimants. If you fall within the
definition of a “Dispute Resolution Claimant,” as set out above, you
have the right to make a Dispute Resolution Claim. You can choose to
submit either the Short Claim Form or the Long Claim Form available on
the Internet at https://www.paypal.com/settlement/. If the Court awards
attorneys’ fees and costs in the amount requested, Class Counsel
estimate that there will be approximately $4.3 million to pay the
claims of Dispute Resolution Claimants. Half of the money allocated to
Dispute Resolution Claimants will be allocated to pay Short Form
Claimants (the “Short Form Fund”). The other half will be allocated to
pay Long Form Claimants (the “Long Form Fund”).

a. Short Form Claimants
The Short Claim Form requires you to provide certain identifying
information and sign a statement under penalty of perjury, which may
be verified using PayPal’s records, that you experienced an
unauthorized or incorrect electronic transfer or an account limitation
or denial of access to your account. If you make a timely, valid claim
using the Short Claim Form, you will receive a payment of $50, unless
the amount needed to pay all of the Short Form claims exceeds the Short
Form Fund. In that case, the Short Form Fund will be divided equally
among all Short Form Claimants. If the amount needed to pay all of the
Short Form claims is less than the amount of the Short Form Fund, the
money left over will be added to the Long Form Fund.

b. Long Form Claimants
The Long Claim Form requires you to provide certain identifying
information; give the details of the account restriction(s) and/or
unauthorized electronic fund transfer(s) you experienced; state the
amount of your claim, and sign a statement, under penalty of perjury,
which may be subject to verification by PayPal’s records, that you
actually suffered the claimed damages. You should also provide any
documentation you have that will support your claim, as explained in
more detail on the Long Form.

If you make a timely, valid claim using the Long Claim Form, an
independent, court-approved claims administrator will evaluate your
claim and determine the amount you should receive. In making this
determination, the claims administrator will take into account the
amount of damages you claim; the nature of your complaint; the quality
of the supporting documentation you provide; your recoverable damages;
the probability that you would be successful on your complaint; and
such other factors that the claims administrator considers relevant.
If the amount needed to pay all of the Long Form claims is less than
the amount of the Long Form Fund, the money left over will be added
to the Short Form Fund.

c. Balance after payment of Long Form and Short Form Claimants
If there are sufficient funds to pay all Short Form and Long Form
Claimants in full in accordance with the written plan of allocation,
any remaining funds will be divided equally among all Dispute
Resolution Claimants to supplement their recoveries.

7. HOW DO I MAKE A CLAIM AND GET A PAYMENT?
To make a claim for payment, please complete one of the claim forms
(Statutory Damage Claim Form, Short Claim Form, or Long Claim Form)
available on the Internet at https://www.paypal.com/settlement/. To
make a valid claim, you will need to (1) fill out the claim form
electronically and (2) print the signature page of your claim form,
sign it and return it by mail to the address provided on the claim
form. You must complete the claims procedure no later than October
23, 2004. Your payment will be transferred electronically to your
PayPal account. If you do not have a current, unrestricted PayPal
account or you indicate on the claim form that you prefer to receive
a check, payment will be made in the form of a check, sent by first
class mail to the address provided on the claim form. If you are paid
by check, a $1.00 charge will be deducted from your payment to cover
the cost of issuing and mailing the check. The claims administrator
will not issue checks for less than $1.00. Such amounts will instead
be reallocated to those claimants who are entitled to receive
distributions.

8. WHAT AM I GIVING UP IF I PARTICIPATE IN THE SETTLEMENT?
If you do not exclude yourself from the class and the settlement is
granted final approval, the judgment entered upon approval of the
settlement will dismiss the lawsuit with prejudice, and will release
any and all claims, demands, rights, liabilities, and causes of
action of every nature and description whatsoever, known or unknown,
matured or unmatured, at law or in equity, existing under federal or
state law, that were or could have been asserted in the Litigation
against the Released Persons, including without limitation, claims
under the Electronic Fund Transfer Act, California Business and
Professions Code E 17200 et seq.; the California Consumers Legal
Remedies Act, Cal. Civ. Code E 1750 et seq.; and for PayPal’s alleged
conversion, breach of the User Agreement or other contract, money
had and received, unjust enrichment, and negligence under California
law or any other state or federal law arising out of, among other
things, PayPal’s restriction or limitation of accounts; PayPal’s
dispute resolution policies, practices and procedures; PayPal’s
debit of accounts following the receipt of chargebacks, buyer
complaints, reports of unauthorized access or in connection with
its Seller Protection Policy, Buyer Complaint Process or Buyer
Protection Policy; PayPal’s alleged conversion of funds; and PayPal’s
compliance with the Electronic Fund Transfer Act, 15 U.S.C. E 1693
et seq., or any similar legislation arising under the laws of any
state. You will be permanently barred from bringing any such claims
that arose prior to February 1, 2004. With regard to accounts that
were limited prior to February 1, 2004, however, you will not be
releasing claims to recover any balance that remained in the account
180 days after the account was initially limited.

In summary, if you do not exclude yourself, you will not be able to
sue, continue to sue, or be part of another lawsuit against PayPal
relating to the legal issues in this case. You will be bound by all
proceedings, orders, and judgments entered in connection with the
settlement, whether favorable or unfavorable, and will be represented
by the Representative Plaintiffs and Class Counsel for purposes of the
settlement. If you do not exclude yourself from the class, and the
settlement is granted final approval, your claims against PayPal and
its affiliates will be released as described above. If you are a class
member, you may, if you wish, appear in this lawsuit through your own
attorney at your own expense. You need not do so to participate in the
settlement, however.

9. WHAT IF I WANT TO EXCLUDE MYSELF (OPT-OUT) FROM THE SETTLEMENT?
If you do not want to remain a member of the class and participate in
the settlement, then you must mail or deliver (email is not considered
adequate), such that it is RECEIVED on or before September 7, 2004,
(1) an original written, signed request for exclusion to Co-Lead
Counsel at the following address:

Co Lead Counsel:
PayPal Class Action Settlement
A. J. De Bartolomeo
Girard Gibbs & De Bartolomeo LLP
601 California Street, Suite 1400
San Francisco, California 94108
and (2) a copy of the written signed request to PayPal’s counsel at
the following address:

PayPal’s counsel:
PayPal Class Action Settlement
Morgan Lewis & Bockius LLP
One Market
Spear Street Tower
San Francisco, California 94105
This request for exclusion must contain your name and address; be
signed by you; and include the reference “In re PayPal Litigation,
Case No. CV-02-1227-JF (PVT).”

If you exclude yourself from the class, you will not participate in
the settlement and cannot receive any payment from the settlement.
Your claims will not be released.

10. HOW WILL THE LAWYERS FOR THE CLASS BE PAID?
From the inception of the litigation in early 2002 to the present,
Class Counsel have not received any payment for their services in
prosecuting the case, nor have they been reimbursed for any
out-of-pocket expenses. If the Court approves the proposed settlement,
Class Counsel will make a motion to the Court for an award of
attorneys’
fees of up to $3,332,500 and reimbursement of expenses of up to
$135,000, to be paid from the $9.25 million settlement fund. Class
Counsel will also seek reimbursement from the settlement fund on behalf
of certain of the named plaintiffs in the litigation for reimbursement
of their expenses related to their service as class representatives in
the litigation, in an aggregate amount not to exceed $15,000. The
motion will be heard at the settlement hearing described below in
Section 11.

Class Counsel’s motion for an award of attorneys’ fees and
reimbursement of expenses is based on various factors that include the
benefits obtained for the class through litigation. These benefits
include the $9.25 million cash settlement and PayPal’s agreement to the
injunctive relief requirements. In addition, certain changes to
PayPal’s business practices are attributable in part to this litigation,
including PayPal’s decision to undertake to return to its customers
approximately $5.1 million in those accounts to which access was
limited for 180 days or more; modifications to PayPal’s arbitration
provision in its User Agreement and its replacement with a clause that
limits PayPal’s ability to compel arbitration where the total amount of
the award sought is $10,000 or greater; and various other changes in
PayPal’s business practices during the pendency of the litigation.

Class Counsel submitted their proposed request for attorneys’ fees to
the Magistrate Judge who had previously presided over discovery and
settlement discussions. Class Counsel’s request for attorneys’ fees is
equal to the amount recommended by the Magistrate Judge.

11. WHEN AND HOW WILL THE COURT DECIDE WHETHER TO APPROVE THE
SETTLEMENT?
The Court will hold a hearing on September 24, 2004, at 9:00 a.m.,
before the Honorable Jeremy Fogel, United States District Judge, United
States District Court for the Northern District of California,
Courtroom 3, 5th Floor, 280 South First Street, San Jose, California
95113. The purpose of the hearing will be to determine (a) whether the
proposed settlement should be approved as fair, reasonable, and
adequate;
(b) whether the application by Class Counsel for an award of attorneys’
fees and expenses should be granted; and (c) whether the lawsuit and
class members’ claims should be dismissed with prejudice pursuant to
the settlement. The Court reserves the right to adjourn or continue the
hearing without further notice to the class.

You may attend the hearing if you wish, but are not required to do so
to participate in the settlement.

If the settlement is not approved by the Court, the lawsuit will
proceed. If there are further actions taken in the case that affect
your rights, you will receive notice as determined by the Court.

12. CAN I COMMENT ON THE SETTLEMENT?
If you decide to remain in the class, and you wish to comment in
Support of or in opposition to the settlement or Class Counsel’s motion
for attorneys’ fees and expenses, you may do so by mailing or
delivering your written (non-email) comments, such that they are
RECEIVED on or before September 3, 2004, as follows: (1) the original
must be sent to the Court at the following address:

Clerk of the Court
United States District Court for the Northern District of California
280 South First Street
San Jose, California 95113
and (2) copies must be sent to Co Lead Counsel and PayPal’s counsel at
the addresses listed in Section 9, above.

Your written comments must contain your name and address; be signed by
you; and include the reference In re PayPal Litigation, Case No.
CV-02-1227-JF (PVT). If you wish to appear and present your comments
orally at the hearing, your written comments must contain a notice
that you intend to appear and be heard, a statement of the position you
intend to present at the hearing, and any supporting arguments.

If you do not comply with the foregoing procedures and deadlines for
submitting written comments or appearing at the hearing, you will not
be entitled to be heard at the hearing; contest or appeal from
approval of the settlement or any award of attorneys’ fees or expenses;
or contest or appeal from any other orders or judgments of the Court
entered in connection with the settlement.

13. HOW CAN I GET MORE INFORMATION ABOUT THE SETTLEMENT?
You can get more information by writing Plaintiffs’ Co-Lead Counsel
electronically or by first class mail at:
paypalsettlement@settlement4onlinepayments.com

Girard Gibbs & De Bartolomeo LLP
601 California Street, Suite 1400
San Francisco, California 94108

Wolf Popper LLP
845 Third Avenue
New York, NY 10022
This notice is a summary and does not describe all details of the
settlement. For full details of the matters discussed in this notice,
you may wish to review the Settlement Agreement dated June 11, 2004
and on file with the Court or visit https://www.paypal.com/settlement/.
Complete copies of the Settlement Agreement and all other pleadings and
papers filed in the lawsuit are also available for inspection and
copying during regular business hours, at the Office of the Clerk of
the Court, United States District Court for the Northern District of
California,
280 South First Street, San Jose, California 95113.

PLEASE DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE.

DATED: July 12, 2004

BY ORDER OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT
OF CALIFORNIA

This PayPal notification was sent to thedude@perlboy.org. To modify your
notification preferences, go to https://www.paypal.com/PREFS-NOTI and
Log in to your account. PayPal will not sell or rent any of your
personally identifiable information to third parties. For more
information about the security of your information, read our Privacy
Policy at https://www.paypal.com/privacy. Replies to this email will
not be processed. Copyright?2004 PayPal, Inc. All rights reserved.
Designated trademarks and brands are the property of their respective
owners. PayPal is located at 2211 N. First St., San Jose, CA 95131.

Interesting stuff.

Stuart

Quick update…

Heya,

For those wondering, all server upgrades are available here.

Stuart

New PHP 4.3.8 RPMS

Hey all,

PHP 4.3.8 RPMS have been released for the following distributions:

Redhat 7.3
Redhat 9
Fedora Core 1
Fedora Core 2
Redhat Enterprise 3

I also upgraded the 7.3 libxml and libxslt RPMs to complete the new PHP rebuild. Finally I built MySQL, Sablotron, Mhash, JS and Libmcrypt for FC1. All this is YUMable by specifying http://www.seekbrain.com/downloads/$releasever as an additional repository location.

Just a final word. For those businesses that use these RPMs to offer an improved service to their clients I’d appreciate a Donation (see the button on the left). I happily provide these RPMs free of charge (like ART) but by the same token I don’t appreciate people taking me for a free ride.

I’m still on what would generally be classed as a “minimum wage”. 🙂 Help if you can…

Stuart

Spam Filter

Well,

After the second wave of spam hit the comments section I kicked the proverbial bucket and installed a Bayesian spam filter. Will have to train it but it seems to be doing a good job and at the very least allows me to delete all the messages in one hit. 🙂

Further updates coming. My TODO list includes:

– PHP 4.3.8 RPMs
– Adding an FC1 tree
– Emailing the relatives (sorry guys!)
– Finishing a traffic accounting system

Quite a few other things but they’ll do for now. 🙂

Stuart