This week, 13 state attorneys general filed an amicus brief in support of the Competitive Enterprise Institute’s Center for Class Action Fairness (CCAF) and its objection to a consumer privacy class action settlement involving Google because it provides millions of dollars to attorneys and zero dollars to the class.
CCAF attorneys argue that the settlement is also improper and unfair because it gives funds to class counsel’s favorite, third-party organizations through cy pres, when it’s feasible to distribute the funds to class members through a claims process. The cy pres payments also create a clear conflict of interest due to pre-existing relationships since Google regularly donates to four of the six organizations, and class counsel is the chairperson of the board of a fifth.
The state attorneys general agree with CCAF that the feasibility of distributing funds depends on whether it’s impossible to distribute funds to some class members, not whether it’s possible to distribute to all class members. According to CCAF director and senior attorney Ted Frank, this is an important distinction that helps prevent nearly every class-action settlement from turning into an abusive cy-pres-only settlement, which harms class members.
“This case is an important test of whether courts will stand up against abusive cy pres settlements,” said Frank. “It is gratifying to have a coast to coast bipartisan coalition of state attorneys general to stand with us on the important principles here.”
In re: Google Inc. Cookie Placement Consumer Privacy Litigation is a class action where plaintiffs sued Google for alleged federal privacy violations over Google’s circumvention of Safari browser users’ privacy settings. The case is currently before the U.S. Court of Appeals for the Third Circuit. Ted Frank originally objected to the settlement approval, cy pres recipients, class certification, and fee request on December 20, 2016.
Note: This release was updated on July 11, 2017, to reflect that two additional state attorneys general signed onto the brief after the original filing date.
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.