Facebook User Pushes High Court To Nix ‘Beacon’ Pact

Law 360 reports on CCAF's work to challenge cy pres awards which do not benefit class members in their objection to the Facebook privacy settlement.

The other circuits' decision have all recognized that cy pres awards may open the door to collusion between the parties and "may provide little or no benefit to class members," and that these types of pacts should be avoided "when any reasonable opportunity remains to compensate class members directly for their injuries," according to the petition.

By contrast, the Ninth Circuit's opinion "brushed aside all such concerns," Marek alleged. Instead, the appellate court held that the fairness of the settlement hinged on whether the cy pres award bore a "substantial nexus" to the interests of the class members, a requirement that the appellate court found was fulfilled by the creation of the charity organization.

"If allowed to stand, the circuit split created by the Ninth Circuit's decision creates an enormous incentive for forum-shopping by plaintiffs' attorneys seeking to sue and settle nationwide class actions like this one," the petition said. "Bringing suit within the Ninth Circuit's footprint now guarantees that minor things like compensating class members for their injuries, holding defendants liable to the extent the law allows, and preventing defendants from injuring class members in the exact same manner will not stand in the way of reaching a quick settlement."

Read the full article at Law 360.