On Wednesday evening, the Competitive Enterprise Institute Center for Class Action Fairness (CCAF) filed its opening brief challenging a class action settlement in a consumer privacy case against Google because it provides millions of dollars to attorneys and zero dollars to the class.
In this case before the U.S. Court of Appeals for the Third Circuit, CCAF argues that even though the law requires class members remain the “foremost beneficiaries” of class action settlements, in this case, the class received nothing while Google gave millions in cy pres payments to its favorite organizations, who are not involved in the litigation. What’s worse is these internet technology and privacy rights institutions are companies that Google has made significant, corporate contributions to in the past. Therefore, this settlement does nothing more than force Google to do what it would have done anyways.
“It's a misuse of the class action system and a breach of fiduciary duty when attorneys take their clients' money and give it to their favorite charities,” CCAF director and class member Ted Frank. “The Third Circuit agreed with us on this issue in 2013, and helped us win $15 million for consumers in that case. We hope they'll reaffirm those principles here.”
According to CCAF, it’s improper and unfair to give funds to third parties through cy pres, when it’s feasible to distribute the funds to class members through a claims process. There are also clear conflicts of interest due to pre-existing relationships since Google regularly donates to four of the six recipients, and class counsel is the chairperson of the board of a fifth.
In re Google Inc. Cookie Placement Consumer Privacy Litigation is a class action case where plaintiffs sued Google for alleged federal privacy violations over Google's circumvention of Safari browser users' privacy settings. Ted Frank originally objected to the settlement approval, cy pres recipients, class certification, and fee request on December 20, 2016.
ABOUT: The Competitive Enterprise Institute’s Center for Class Action Fairness represents class members against unfair class action procedures and settlements. Originally founded by Ted Frank in 2009, the center has won millions of dollars for consumers and shareholders and won landmark precedents that safeguard consumers, investors, courts, and the general public.
Unfair settlements generally serve self-interested lawyers and third parties at the expense of absent class members, the group of people whose rights are traded away to settle a class action. Lawyers have an interest in their fees, defendants have an interest in cheaply disposing of a lawsuit, and the class’s interests can take a back seat in the process. CEI seeks to solve these problems by representing such class members pro bono and presenting judges with the other side of the argument.