CEI Fights Facebook Settlement that Pays Consumers Nothing, Lawyers Get Nearly $4 Million


Today, the Competitive Enterprise Institute’s Center for Class Action Fairness (CCAF) filed its opening appellate brief opposing a Facebook class action settlement that provides $3.9 million for attorneys, while class members receive nothing more than a vague 22-word addition to Facebook’s “Help Center.”

“We are asking the Ninth Circuit to hold the line against lawyer-driven settlements that disproportionately favor lawyers at the expense of the class,” said CEI’s Director of Litigation and CCAF founder Ted Frank. “This settlement has all the warning signs the court previously has identified, with class counsel negotiating millions in fees for themselves while leaving the class with a worthless 22-word disclosure.” ​

CEI argues the district court was wrong to approve the settlement because the only relief it provides to class members is the 22 words. All other changes were already in place before the settlement, and Facebook isn’t even required to keep those changes.

“I’m asking the Ninth Circuit to protect class members from an unfair settlement that selfishly favors only our attorneys,” said class member and CEI attorney Anna St. John.

The settlement is a result of a privacy class action over Facebook’s treatment of URLs in internal messages between Facebook users and was approved by the U.S. District Court for the Northern District of California.

>> Read the brief and more about the case here.

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, and courts.

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.