Frank v. Gaos
139 S. Ct. 1041
| SCOTUS | 2019Background
- Plaintiffs (Gaos and others) sued Google under the Stored Communications Act (SCA), alleging Google transmitted users' search terms to visited sites via HTTP referrer headers.
- Named plaintiffs sought to represent a class of users who clicked Google search-result links; Google moved to dismiss for lack of Article III standing multiple times.
- The district court initially relied on Edwards ( Ninth Circuit precedent) to find a statutory violation sufficient for standing; Google withdrew its standing challenge after Edwards was dismissed for certiorari review.
- Parties reached a classwide settlement: Google would add certain disclosures to webpages and pay $8.5 million; no payments to absent class members—most funds were allocated to cy pres recipients, fees, and costs.
- Objectors challenged the cy pres-only settlement as unfair, unreasonable, and conflicted; the district court and a Ninth Circuit panel approved the settlement without resolving standing post-Spokeo.
- The Supreme Court granted review of whether cy pres-only settlements satisfy Rule 23(e)(2) and—because Spokeo imposes a concreteness requirement for injury—vacated and remanded for the lower courts to resolve whether any named plaintiff has standing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a cy pres-only class settlement can be "fair, reasonable, and adequate" under Rule 23(e)(2) | Settlement provides indirect public-benefit relief and counsel negotiated reasonable terms | Settlement acceptable because it funds privacy-related organizations and provides disclosures | Court did not decide merits; remanded because standing unresolved |
| Whether named plaintiffs had Article III standing to pursue SCA claims after Spokeo | Plaintiffs relied on asserted statutory injury (disclosure of search terms) and prior district findings | Google argued plaintiffs failed to allege a concrete, particularized injury post-Spokeo | Court vacated and remanded for lower courts to address standing in light of Spokeo |
| Whether lower courts may approve class settlements without addressing jurisdictional standing of named plaintiffs | Plaintiffs and lower courts treated standing as resolved earlier or waived | Government and Google urged resolution of standing before settlement approval | Court held it must assure Article III standing before approving class settlements and remanded for that inquiry |
| Whether this Court should resolve merits on cy pres adequacy now | Objectors asked Court to decide and vacate approval as inconsistent with Rule 23 | Respondents urged remand or resolution on the merits | Court remanded for first-instance consideration of standing; expressed no view on cy pres adequacy |
Key Cases Cited
- DaimlerChrysler Corp. v. Cuno, 547 U.S. 332 (2006) (courts must assure Article III standing)
- Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167 (2000) (standing principles requiring concrete and particularized injury)
- Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26 (1976) (no jurisdiction where no named plaintiff has standing)
- Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997) (settlement terms can bear on adequacy of representation under Rule 23)
- Cutter v. Wilkinson, 544 U.S. 709 (2005) (federal courts are courts of review, not first view)
- Edwards v. First American Corp., 610 F.3d 514 (9th Cir. 2010) (held statutory violation alone can establish standing under Ninth Circuit precedent at the time)
- In re Google Referrer Header Privacy Litigation, 869 F.3d 737 (9th Cir. 2017) (Ninth Circuit panel affirmed settlement approval without addressing Spokeo)
