21 F.4th 1102
9th Cir.2021Background
- From 2007–2010 Google Street View cars collected Wi‑Fi network data, including unencrypted "payload" (emails, passwords, files); plaintiffs estimated the class at ~60 million people.
- Multiple putative class actions were consolidated; a special master conducted a three‑year forensic review to test standing for 18 named plaintiffs.
- In June 2018 parties settled: Google created a $13 million fund, agreed to injunctive relief (destroy payload data, restrain future collection without notice/consent, privacy program, education), and directed remaining money (after fees, costs, and awards) to cy pres recipients (privacy organizations); no direct payments to absent class members.
- District court certified the class for settlement purposes under Rule 23(b)(3), approved the settlement and $13M fund allocation to cy pres, and awarded class counsel 25% of the fund.
- Objector David Lowery appealed, arguing (inter alia) that direct distribution was feasible, that cy pres‑only monetary relief is improper, that certification was improper if distribution was infeasible, that cy pres recipients and fee awards were conflicted or excessive, and that cy pres grants compelled speech in violation of the First Amendment.
- The Ninth Circuit affirmed: it found distribution to class members infeasible given verification burdens and costs, upheld class certification and the settlement (injunctive + cy pres), rejected the First Amendment compelled‑speech challenge, and affirmed the fee award and cy pres recipient approvals.
Issues
| Issue | Plaintiff's Argument (Lowery) | Defendant's Argument (Google / Plaintiffs) | Held |
|---|---|---|---|
| Permissibility of cy pres‑only monetary relief | Cy pres‑only monetary relief is improper; absent class members should receive direct payments | Cy pres is an established tool for non‑distributable funds and may be appropriate where direct distribution is infeasible | Ninth Circuit: cy pres‑only (or cy pres‑heavy) settlements are permissible where they satisfy established nexus and fairness standards and fund is non‑distributable |
| Feasibility of distributing fund to class members | Distribution feasible via claims process or self‑identification/lottery; court applied wrong feasibility test | Verifying individual claims requires technical proof (unencrypted network during period; vehicle proximity; payload captured) that is costly and impractical; special master process shows complexity | Ninth Circuit: district court did not err—self‑identification would be speculative and meaningful forensic verification is prohibitively costly/time‑consuming; distribution infeasible |
| Class certification under Rule 23(b)(3) if funds are non‑distributable | If funds cannot be distributed, certification fails because class device is not a superior method to provide relief | Infeasibility of distribution does not foreclose certification because cy pres can provide an indirect benefit and Rule 23 factors still satisfied | Ninth Circuit: infeasibility of direct distribution does not preclude certification; cy pres can provide an indirect, cognizable class benefit when closely tethered to the claims |
| First Amendment compelled‑speech challenge to cy pres recipients | Approving cy pres payments to advocacy groups forces class members to subsidize speech they may oppose; settlement approval is state action | Settlement approval is not necessarily state action; in any event class members can opt out to avoid subsidization | Ninth Circuit: did not decide whether approval is state action; held no compelled speech because class members can opt out and thus avoid subsidizing recipients |
| Conflicts, fiduciary duties, and attorneys’ fees | Proposed cy pres recipients had prior affiliations/received funds from counsel/defendant; 25% fee benchmark was applied blindly; counsel favored third parties over class | Parties selected recipients tethered to privacy interests; district court considered circumstances, risks, lodestar and class benefit; benchmark is a starting point and may be adjusted | Ninth Circuit: no abuse of discretion—recipients’ prior affiliations did not disqualify them here; court reasonably applied 25% benchmark after considering benefits and lodestar; no showing of fiduciary breach by counsel |
Key Cases Cited
- Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012) (approved cy pres distribution tied to class interests; cy pres can be the "next best" distribution)
- Nachshin v. AOL, LLC, 663 F.3d 1034 (9th Cir. 2011) (cy pres permissible but recipients must be tethered to the lawsuit and class interests)
- In re Google Referrer Header Privacy Litig., 869 F.3d 737 (9th Cir. 2017) (upheld cy pres‑only distribution where fund was non‑distributable; explained standards)
- Frank v. Gaos, 139 S. Ct. 1041 (U.S. 2019) (Supreme Court vacated and remanded Google Referrer on standing—left cy pres standards unsettled at highest level)
- Joffe v. Google, Inc., 746 F.3d 920 (9th Cir. 2013) (interlocutory issues and standing in Street View litigation context)
- Briseno v. ConAgra Foods, Inc., 844 F.3d 1121 (9th Cir. 2017) (discussion of ascertainability and limits on feasibility arguments at certification)
- Campbell v. Facebook, Inc., 951 F.3d 1106 (9th Cir. 2020) (injunctive relief can have value to class even if modest; evaluate relief in context of claims strength)
- Six (6) Mexican Workers v. Ariz. Citrus Growers, 904 F.2d 1301 (9th Cir. 1990) (early recognition of cy pres as option for unclaimed or non‑distributable funds)
- Molski v. Gleich, 318 F.3d 937 (9th Cir. 2003) (cy pres can be used for portion of settlement where distribution is impracticable)