• by Wendy Davis  @wendyndavis, July 13, 2011

A federal judge has tentatively approved a revised settlement of a class-action lawsuit against Classmates.com that calls for the company to pay up to $15 each to individual members.

But the settlement contains a big catch: It caps damages at $2.5 million. That maximum means that any individual's rebate will depend on how many of Classmate's 60 million users put in claims on the fund. If all of them make claims, they will receive only 4 cents each.

"In short, the revised settlement will provide meaningful cash relief only if all but a miniscule fraction of class members fail to make claims," U.S. District Court Judge Richard Jones in Seattle wrote. "This is a significant shortcoming."

Still, Jones granted the settlement preliminary approval, stating that it marked an improvement over a previous deal that would have given many members "coupons" they could apply toward subscription fees.

The deal would resolve a 2009 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 prior agreement, which Jones scuttled, 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.

When Jones rejected that deal in March, he wrote that $2 "will either go unused, or it will transform a non-paying registered user into a paying Classmates customer."