• by Wendy Davis  @wendyndavis, February 28, 2011

A judge has rejected a proposed settlement of a class-action lawsuit that called for Classmates.com to pay up to $9.5 million for allegedly duping Web users into purchasing paid memberships.

"The settlement offered very little to class members," U.S. District Court Judge Richard Jones in Seattle wrote last week in an opinion scuttling the settlement.

The deal would have resolved a 2008 lawsuit alleging that United Online's Classmates.com tricked people into purchasing "gold" premium memberships by sending deceptive email ads. The messages allegedly told recipients they were being sought out by former schoolmates. The now-nixed agreement called for Classmates to pay $3 each to the estimated 3.16 million users who purchased premium memberships after allegedly receiving such messages. Classmates, which recently rebranded as MemoryLane.com, also agreed to provide other members with $2 credits toward the purchase of a gold membership.

Jones criticized the agreement because it would not prevent Classmates.com from continuing to use the same marketing strategies that landed it in court. "It does not require Classmates to stop sending deceptive emails," he wrote. "Instead, it requires more disclosure, disclosure that is highly unlikely to make a difference to class members."

In addition, Jones wrote, the monetary terms would not benefit most Classmates.com users. "A $2 coupon," he wrote, "will either go unused, or it will transform a non-paying registered user into a paying Classmates customer. This is the hallmark of a promotion for Classmates, not of a benefit conferred in a bilateral resolution of a dispute."