The law says (in the interpretation of the judge, based on the facts available) that backers are entitled to refunds. Since the company refused to provide those refunds willingly, and had to be forced to do so by the legal system, it doesn't seem unreasonable for them to bear the associated costs.

Plus, it's a deterrent. If losing a lawsuit meant you only had to pay for the damages you were originally found to owe, then everyone would challenge every claim even if they had a near-0% chance of winning, and the court system would be totally overwhelmed.

>So, the 31 Washington people actually harmed get $20 each; lawyers get $23,000, the state gets $31,000.

>Someone please tell me how this is justice.

i was thinking that way too until i got sued, and successfully fought it using the law and its interpretation established in some other case before by lawyers with similar scale and structure of payout (without the state part). Like journalists, lawyers have their part in maintaining the system allowing to keep actors responsible for their actions.

$23K is just a cost for an employer of less than 1 month of 1 programmer resulting in 3-5K of LOC. And if you ever dealt with court proceedings you would know how much time it consumes, and 100-200 pages of legal docs would probably be on the scale of producing of 3-5K of LOC.

can you explain how $23k is the cost of an employer for less than 1 month of 1 programmer? that's over 276k / year

my employer can't possibly be spending over $8k/mo on me with overhead

Actually I would be really surprised if your company managed a 50% overhead on their developers. That is a fantastic ratio that is to be applauded (if it were possible). Here are the things a US company has to pay for:

* Salary 100% * Social security/medicare 7.5% * Medical insurance 15% * Building 15% * Supplies/equipment 10% * Managers 20% (1/5) * Support 17% (1/6) * IT 10% (1/10)

Now these numbers are really rough and normally you don't do the math this way but we are counting lines of code so pretty much everybody is overhead at this point. Also I completely discounted design and sales due to the shaky definition of lines of code.

But that puts 276k a year paying a programmer 142k a year which isn't cheap but is probably not far off for many parts of the country.

Perhaps you could tell us how it isn't?

All sorts of things have substantial fines as punishment. In many states, your traffic ticket will double in a construction zone. Is that because ticketing is more expensive there? No, it's because they really don't want you to do it.

People are saying it's a scam; if that's true, then I don't see anything wrong with strong punitive fines for scammers. It's a great deterrent. Especially when, as here, combined with high publicity. People have often asked, "What stops someone from just doing a Kickstarter and taking all the money?" This right here is meant as an answer to that question.

The backers got their money back. And the defendant lost a lot more money than just the restitution. The penalty was harsh, but I don't see why it was unjust.

Do you think the plaintiffs should get more money than they deserved?

> Do you think the plaintiffs should get more money than they deserved?

I'll be charitable and assume you meant more money than they invested. What plaintiffs deserve is debatable, presupposing it is begging the question.

A very, very tiny minority of the backers got their money back: 31 out of 810 backers, receiving their $668 out of the $25,146 total pleged. The rest of the backers are unlikely to see a penny now, because all their money is going to the state in the form of legal fees and civil penalties. That's certainly not justice.

It's unfortunate that our legal system is set up in such a way that you would need $24k in legal fees to settle a case like this.

teraflop gave a great answer why this is so: https://news.ycombinator.com/item?id=10206606

Well, I wasn't really talking about the magnitude of the costs involved. You could certainly argue that a case like this requires too many hours of lawyers' time, or that those hours are overvalued. I don't personally know of any better alternative systems that would be useful to compare against.

> A 50:1 ratio applied in all 50 states would yield a whopping 2500:1 ratio of punitive to actual damages.

That's not how it works. If we use actual numbers, you get $1k x 50 = $50k in restitution (same as what you got), and $50k x 50 = $2.5M (1/50 of what you got).

Which isn't unreasonable. If the worst possible penalty for a scam was having to pay it all back, people would do it all the time! And if the people bringing the lawsuit have a best-case scenario of getting their money back, minus $23k in lawyer fees, no one would ever sue anyway. Best case, you lose $22k.

Ignoring whether this particular judgement is fair, the (US) legal system isn't really focused on restitution. Most of the punishments it metes out are purely a deterrent; after all, if someone is sent to jail for ten years, its not like the victim is given an extra ten years of life.

The criminal justice systems in the US are, obviously, not focused on compensation. But the civil justice systems are much more focused on compensation.

Using an example drawn from the former to say that the "(US) legal system" is not focused on restitution in response to a discussion about the latter is not particularly useful.

Other people have commented on the size of the lawyer / court costs vs plaintiff's award, but the thing that concerns me is the limited scope of the judgment. Since it was brought in WA, the issue of backers outside the state aren't of any concern to those involved, but of course they were equally wronged.

The defendant here probably doesn't have $50k, let alone $2.5mm (if suits in all 50 states are brought and result in identical verdicts).

If any money is actually paid, it will likely go towards a partial payment of the amount owed to the WA case, and then the defendant will be bankrupt. No one from any other state will receive anything. Meanwhile, if the matter had been handled differently, more of the backers could have received some partial refund.

I think this is a situation that Kickstarter could have improved, if they participated in projects post-funding. Binding arbitration between parties, controlling payments based on milestones, and so on.