Coding Cloud Heroku May Face Lawsuit Over Bait-and-Switch Claims

Seeing that there is a website/lawfirm[1] threatening legal action, I can bet Heroku/Salesforce lawyers jumped on that ASAP and let all their employees that are allowed to talk publicly not to comment on the issue anymore.

The US legal system is setup that if a company admits fault in something like this, it makes defending yourself much more difficult. Meaning if a lawsuit is brought about, it's not about proving innocence anymore, it's about mitigating the damages you will have to pay. Your lawyer is going to want to have as many options available to him/her to deal with your case during it's lifespan, and admitting fault before the lawsuit even begins will limit the lawyers options when it comes to negotiations and what tactics they can use in the courtroom.

[1] http://herokuclassaction.com/

What makes this proposed class action suit possible is that Heroku did admit[0] that their service didn't match up with what their documentation and website claimed, that they messed up, and would be fixing it. And it wasn't something like "our documentation and site could have been misinterpreted", they actually admitted the website and documentation were inaccurate with metrics which were incorrect. It's like a class action lawyer's wet dream of culpability on the part of the defendant.

[0] https://blog.heroku.com/archives/2013/2/16/routing_performan...

Sadly, the US legal system does not reward heartfelt, honest statements, particularly in these situations.

Which is why fine print almost always makes even the nicest company sound like a jerk.

There's a middle ground; it is better to fess up and try to square things with your customers in a situation where you've done wrong, but at the same time you don't want to be exploited by unscrupulous plaintiffs in turn. Most of those customers just want what they paid for or to recover their actual losses (what are called economic damages in law) but a few may see a lawsuit as an opportunity to enrich themselves. The court system is supposed to prevent that, and overall it works moderately well, but once papers are filed it's better for the arguments to take place in court rather than outside.

They have made public statements on their blog, and hopefully that will continue. In this situation, I think it is the right move to avoid getting involved with this shameless law firm trying to incite drama for their own gain.

> Yes, admitting wrongdoing may open you up to legal liability. But it seems to me that, in the long run, it's far better to take your licks and own up to your mistakes than to hide behind the shield of pending litigation.

This is an admirable, well-intentioned perspective, but it is one that won't net you much benefit, not even in the long run.

Filing legal papers -- or, in this case, raising the banner for a class-action -- is serious business. By the time it happens, the time for defusing the situation and calling a truce is long past. The only opinion that matters is that of the judge and/or jury. And let's face it, being the loser in court is going to have far more impact on the public's opinion of the defendant than any honest-from-the-heart statement or outreach.

So with that said, there is nothing of substance that the defendant can say that will help them in court. The opposing attorney is not going to say, "Well, I was going to grill you, but I've had a change of heart ever since reading that impassioned, honest, salt-of-the-earth statement you released pre-trial". The judge won't care either. And the jurors aren't supposed to even be aware of it.

I think a civil trial is not much different than the situation portrayed in the famous "Don't talk to police" video:

http://www.youtube.com/watch?v=6wXkI4t7nuc

The people you're facing in court don't care that you've made an effort, post-lawsuit-filing, to be upfront and friendly. Anything you say will not help you, it can only hurt you. In this case, Heroku's reticence in speaking their mind outside of court is the right one.

This is normal, once legal threats are issued "we can't comment on legal issues...but customers are #1...blah blah" is the standard answer.

A mea culpa right now might haunt you in the long term.

I think the matter is if random distribution is what is documented, no one will raise an eyebrows. I believe the Heroku claimed intelligent routing based on server loads to route traffic to idle servers. That threw people off.

I dont know, but I would assume it has to deal with the fact you can't predict how long a job will take to complete, and a random selection would have more resources-more free-more often, verses FIFO where a group of really large tasks could halt everything.

I think you are supposed to take least busy of two random nodes.

> If Heroku wasn't providing enough performance for their money (regardless of technical cause), then why did they stick around so long?

We didn't know how bad the performance was because Heroku's tools (logs and New Relic) reported incorrect performance data (i.e., they said requests weren't queuing when they were actually spending a ton of time queuing)

EDIT:

> Would Rap Genius still have sued if the documentation had been 100% correct and instead the problem was just plain old slow I/O on Heroku's side?

To be clear, we have no official association with http://herokuclassaction.com/ or the lawyer behind it – I actually found out about the site from the article's author when he interviewed me for the story.

(But I do think Heroku owes its customers a refund)

> I don't see any obvious or intentional fraud.

Fraud is usually a criminal matter.

This is a civil matter. Probably under torts law, especially if there's anything in California/US torts law that resembles Australia's tort of "misleading and deceptive conduct".

Fraud and torts are different. And to forestall the next obvious point: torts and contracts are different.

> I don't really understand what Rap Genius hopes to gain here.

A refund.

Heroku's selling pitch is linear scalability. Rent 1 dyno, get ~ (1 dyno / Σ dynos) improvement in performance. Rap Genius demonstrated that they were getting exponentially worse increments of added performance per dyno added.

> If Heroku wasn't providing enough performance for their money (regardless of technical cause), then why did they stick around so long?

This is orthogonal to the question of whether Heroku acted in a legal way.

> Would Rap Genius still have sued if the documentation had been 100% correct and instead the problem was just plain old slow I/O on Heroku's side?

Courts don't worry their heads with strawman hypotheticals.

(IANAL, TINLA)

> "I don't really understand what Rap Genius hopes to gain here."

Rap Genius isn't the ones doing the suing. Rap Genius wrote about it, which caused Heroku to come clean. I think Rap Genius already got what they hoped to get (i.e., exposure, official comment, etc).

> "I don't see any obvious or intentional fraud."

You don't need intent to be sued - you only need to have caused damages to the plaintiffs. What Heroku has effectively done was:

1 - misrepresented their product in a substantial way.

2 - "overcharged" their customers substantially by giving them less performance than they paid for.

Both of these are material damages, and there's a more than reasonable case for Heroku's customers to recover this money.

This isn't a criminal case here, there doesn't even have to be fraud (as defined in the criminal law context).

I think after reading the article, it is pretty clear they did not notice the routing issues until they noticed slowed down performance and till their consumers complained. That makes perfect sense, you don't really dig deep into routing until you hit a bottleneck, specially when you are unable to monitor it, and specially when your provider is lying to you about how they route.

A civil suit doesn't mean "you're a bad person." It means "we're not square." If you sold something with certain parameters and delivered less, even if you did it on accident you're not square with your customers, and even if your customer didn't notice you're not square with them.

Ianal stands for I am not a lawyer, so "a lawyer" in "IANAL a lawyer" is redundant.

Rap Genius isn't suing.

The problem is not that they provide random routing, the problem is they said in their documentation that they provided intelligent routing, a design choice they backed off of when they switched stacks.

Customers still have a problem, but Heroku doesn't from a legal / class action-y perspective.

I'm sorry, did I miss something since aphyr's analysis? http://aphyr.com/posts/278-timelike-2-everything-fails-all-t...

Why is Heroku "in the wrong" exactly?

Um, why? I was one of many plaintiffs in a class action lawsuit against EA (which was settled in our favor). That did not help EA's image at all :)

It looks pretty bad when your customers complain about problems that are hidden by your own monitoring tools, and then you tell them to buy more crap to fix it! It's not a small amount either -- as mentioned the queuing time was larger than the request time. And on top of it you're paying out the nose for this crappy monitoring tool.

While I agree this sways me to Heroku's side, I don't think this is their marketing ploy.

Rap Genius says they aren't involved either, so this is probably a single-person law firm looking to create some buzz for himself. He should threaten to sue Amazon next for all the times they haven't held their end of the bargain. That'll get him a ton of publicity.

Class action lawyering usually sound ambulance chasey, because any given person doesn't lose that much in a given instance and so the actual people harmed have little incentive to sue.

At the same time, it's an edge case in the economy. If you harm a large number of people a small amount, they won't sue you to recover for their injury.

It's not really ambulance chasing if all he's after is a partial refund.

From the article:

As for Lehman, he wants some of the $20,000 his company pays Heroku each month returned. “We deserve some sort of refund here,” he says.

EDIT: I re-read the article, and it's not even clear that Rap Genius is part of this. Looks like a lawyer trying to drum up support.

I don't believe any decision was made to misrepresent the product. The product just evolved and the product documentation didn't. The end result is the same — the product was advertised with inaccurate claims — but this appears to be more a case of neglect than a deliberate misrepresentation.

It would have been an issue for the acquirer before or during acquisition, if it were present at the time, of course. Some, perhaps many, investors into startups also insist on liability insurance.

But the founders of Heroku have no more liability than the company in control of its assets, which in almost all cases would be some sort of Limited Liability vehicle.

But you can bet money will be intelligently routed to their pockets

>It really disgusts me how quick people are to bite the hand that feeds them.

Really? Because it really disgusts me when a company:

    * Misrepresents their product (saying it's A when it's actually B)
    * Privately acknowledges this misrepresentation under the radar
    * Makes large and ridiculous amounts of bank on this misrepresentation (since you have to throw more dynos at the app to mitigate the lag caused by the misrouting.. and Heroku may be many things, but economical it isn't)
    * And on that note, provides very expensive monitoring and performance analysis tools that further perpetuate the misrepresentation!
    * And then force you to resort to litigation to get some portion of this huge mis-spent investment refunded. (Looking at the suit, this is all that's being asked for)

This wasn't a mistake on Heroku's part, this was calculated. And even if you accept that it was a mistake, the fact of the matter is that their negligence in this matter made them a hell of a lot of money.

This is definitely grounds for a suit.

> As unlikely as it is, I hope that Heroku terminates the account of anyone that joins the class action against them.

It would be hard to give worse legal advice than this.

If you're going to tldr; an article you should really read it. Rap genius isn't suing. No one, in fact, is actually yet suing.

RapGenius just recently raised $15m from Andreessen Horowitz; they hardly need to make 'painful attempt[s] to remain relevant.'

And they're not even involved with this lawsuit.