Facebook Settlement Illustrates the Worst of Lawyer-Driven Class Actions
This week, CEI’s Center for Class Action Fairness (CCAF) argued against a cynical Facebook class action settlement that provides $3.9 million in fees and expenses to the plaintiffs’ attorneys and only a vague 22-word addition to Facebook’s “Help Center” of information already disclosed on the site for the class members. 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 on Wednesday.
“We had hoped the court would recognize that this settlement exemplifies the worst of lawyer-driven class actions and should not be approved under existing law,” said CCAF director Ted Frank about the decision. “The class relief is entirely illusory and yet the attorneys claim they are entitled to millions of dollars in fees.”
According to CCAF, not only are the class members receiving worthless injunctive relief while their lawyers walk away with millions, but no one even notified class members of the settlement. This poorly-noticed settlement is clearly unreasonable because Facebook could have inexpensively notified the class through the platform since all of the class members are Facebook users, and Facebook already conveys 60 billion personal messages per day. Read about the case here.
Related: Seven Reasons to Object in Campbell v. Facebook
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.