In Re: Google Inc. Cookie Plac v.
934 F.3d 316
| 3rd Cir. | 2019Background
- Google’s DoubleClick cookies allegedly bypassed Safari/IE privacy settings and tracked users; consolidated consumer suit asserted privacy claims under California law and sought injunctive and monetary relief.
- After partial dismissal on appeal (only California constitutional and intrusion-upon-seclusion claims remained), parties negotiated a settlement: Google would stop the cookie practice on Safari and pay $5.5 million covering fees, incentive awards, and cy pres; no direct monetary payments to class members.
- The settlement defined a nationwide class of Safari/IE users and included a broad release of all claims (including damages) “that did or could stem from” the litigation’s subject matter.
- Six cy pres recipients (privacy/research organizations) were selected by agreement of the parties and required to use funds for browser-privacy work; several recipients had prior ties to Google or class counsel.
- The district court certified the class under Rule 23(b)(2), found individual distributions infeasible, approved the settlement summarily, and overruled the sole objector, Theodore Frank.
Issues
| Issue | Plaintiff's Argument (Frank) | Defendant's Argument (Google & class) | Held |
|---|---|---|---|
| Whether cy pres-only monetary relief can satisfy Rule 23(e)(2) fairness | Cy pres should not supplant direct distributions when some class members could be compensated; fund belongs to class members | Cy pres furthers class-wide injunctive purposes and deterrence; direct payouts would be infeasible or ineffective | A cy pres-only (b)(2) settlement can in some cases be proper, but approval requires careful scrutiny; not per se invalid |
| Whether the district court adequately evaluated settlement fairness and certification | District Court’s analysis was perfunctory and failed to justify bypassing (b)(3) safeguards and broad releases | Parties relied on infeasibility of individual distributions and (b)(2)’s focus on injunctive relief | Vacated and remanded: district court’s cursory findings were insufficient for appellate review |
| Whether a Rule 23(b)(2) settlement may include a class-wide release of monetary claims without (b)(3) protections | Broad damages release improperly sidesteps (b)(3) notice/opt-out protections and requires direct compensation or heightened scrutiny | Release is part of negotiated settlement tied to injunctive relief and cy pres; (b)(2) certification was appropriate | Court questioned permissibility of such a release in a (b)(2) settlement and directed district court to reconsider and make explicit findings; remand required |
| Whether prior relationships between cy pres recipients and parties/counsel taint selection | Prior affiliations (donations, board memberships) create conflict and risk that recipients were chosen for convenience, not merit | Parties selected recipients tied to browser/privacy work; affiliations not shown to have controlled choice | Remanded: district court must investigate prior affiliations, require parties to justify selection process, and increase scrutiny if conflicts exist |
Key Cases Cited
- In re Baby Prods. Antitrust Litig., 708 F.3d 163 (3d Cir.) (cy pres appropriate for excess funds and where direct distributions are infeasible)
- Girsh v. Jepson, 521 F.2d 153 (3d Cir.) (factors for assessing class settlement fairness)
- In re Prudential Ins. Co. Am. Sales Practice Litig., 148 F.3d 283 (3d Cir.) (additional factors for settlement review when relevant)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011) (characterization of Rule 23(b)(2) as for indivisible injunctive/declaratory relief)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (clarified concreteness requirement for Article III standing)
- In re Nickelodeon Consumer Privacy Litig., 827 F.3d 262 (3d Cir.) (tracking of browsing data can constitute concrete injury for standing)
- In re Nat'l Football League Players Concussion Injury Litig., 821 F.3d 410 (3d Cir.) (class notice and due process constraints on settlement procedures)
- In re Payment Card Interchange Fee & Merchant Discount Antitrust Litig., 827 F.3d 223 (2d Cir.) (reversing approval of (b)(2) settlement with broad release)