*1 Hunker; Megan Lynn Hancock, tipped jury govern- in the “could have a mi by through by nor, parent further undercut [sic] ment’s favor” her Rebec Complaint Holey; Muhs; the fact and Owens’ ca Austin Catherine completely Harris; testimony upon Herrera; Maryam bore different Mario Hos seiny, Ow- Specifically, individually elements the crime. and on behalf of testimony primarily concerned wheth- ens’ similarly themselves and all others Bailey, er bona fide services to provided situated, he Plaintiffs-Appellees, Complaint narrowly offered v. Bailey purpose proving FACEBOOK, INC., corpora a Delaware illegal unregistered it was issue knew tion; Blockbuster, Inc., a bona Delaware receiving stock without fide services corporation; Fandango, Inc., a Dela return. corporation; Hotwire, Inc., ware a De presented ample The Government docu- corporation; Inc., Travel, laware Sta mentary, testimonial and demonstrative corporation; Delaware Over evidence, testimony, in addition to Owens’ stock.com, Inc., corpora a Delaware showing Bailey unregis- issued the tion; Zappos.com, Inc., a Delaware the purpose generating tered for funds corporation; Gamefly, Inc., a Dela Aspen Pepper pur- for the Cove and Lane corporation, Defendants-Appel ware proving chases. evidence that series lees, events, by testi- corroborated Owens’ by mony, was unaffected the state of mind Ginger McCall, Member, Class Thus, by Complaint. I issues raised Objector-Appellant. probable would hold that it is more than jury not that the have would reached Lane; Sheikha; Sean Mohannaed Sean Complaint same verdict had been Martin, individually, and on behalf of introduced. similarly themselves and all others situated; Sammour; Ali Mohammaed
CONCLUSION Zidan; Karrow; Colby Henson; Sara Hunker; Sheikha; Denton Firas Has indicated, For the I af- reasons would Sheikha; Stewart; sen Linda Tina firm the district court’s admission of Tran; Smith; Parnell; Matthew Erica 404(b), Complaint, Bailey’s under Rule Conway; Phillip Huerta; John Alicia conviction. Hunker; Lynn Hancock, Megan a mi nor, through parent her Rebec Holey; Muhs; ca Austin Catherine Harris; Herrera; Maryam Mario Hos seiny, individually and on behalf of similarly themselves and all others situated, Plaintiffs-Appellees, LANE; Sheikha; Sean Mohannaed Sean v. Martin; Sammour; Ali Mohammaed Zidan; Karrow; Colby Henson; Facebook, Inc., corporation; Sara a Delaware Hunker; Sheikha; Blockbuster, Inc., corpora Denton Firas Has a Delaware Sheikha; Stewart; Hotwire, Inc., tion; corpo sen Tina Linda Delaware Smith; Tran; Parnell; ration; Inc., Fandango, Matthew Erica a Delaware Conway; Phillip Huerta; Travel, Inc., corporation; John Alicia Dela Sta *2 Overstock.com, corporation; ware corporation; Zap
Inc., a Delaware corporation; Inc., a Delaware
pos.com, Inc., corpora
Gamefly, a Delaware Defendants-Appellees,
tion, Marek; Trotter, Benjamin
Megan Objectors- Members,
Class
Appellants. 10-16380, 10-16398.
Nos. Appeals, Court of
United States
Ninth Circuit. 12, Oct. 2011.
Argued and Submitted Sept.
Filed *5 Page, Litiga-
Michael H. Public Citizen Washington, D.C.; tion Group, F. Steven Helfand, Offices, Law Helfand San Fran- cisco, CA, objectors-appellants. for the Kamber, LLC, Law, Scott A. Kamber York, NY, New for the plaintiffs-appellees. Rhodes, LLP, Cooley Michael G. San Francisco, CA, the defendants-appel- lees. about with friends information
to share Internet. do elsewhere on the what program operated by updating The cer- personal profile to reflect member’s HUG, JR., Before: PROCTER taken on actions the member had tain KLEINFELD, and J. ANDREW companies that had belonging to websites FLETCHER, A. Circuit WILLIAM participate Facebook to contracted with Judges. Thus, example, program. the Beacon HUG; through by if a member rented movie by Judge Dissent Opinion Blockbuster.com, website participating Judge KLEINFELD. information Blockbuster would transmit Facebook, Face- the rental OPINION about in turn that informa- book would broadcast HUG, Judge: Circuit online everyone in the member’s tion question presented is whether per- to his or her publishing network ap- its discretion district abused profile. sonal parties’ million settlement proving $9.5 Although initially designed Facebook “fair, reasonable, ade- give op- Beacon members program employ- either quate,” because portunities prevent broadcast organization on ee sits the board information, required private never distributing cy pres funds or because *6 a re- affirmative consent. As members’ too hold amount was low. We settlement sult, many that Bea- complained members did not. causing publication con was of otherwise information about their outside private I personal their profiles web activities to network Facebook an online social is knowledge their or Fa- approval. without personalized (and web develop where members responded these complaints cebook information profiles interact and share negative coverage) accompanying media The of informa- type with other members. by privacy intend- releasing first control considerably, varies tion members share to allow out of the opt ed its members headlines, photo- can and it include news program fully, ultimately and Beacon then stories, videos, activi- graphs, personal and by discontinuing operation program of the generally publish ty updates. Members altogether. to share to their they
information want responses, with these Unsatisfied profile, personal and information group plaintiffs putative filed a nineteen thereby to the members’ on- broadcasted against class action in federal district court (i.e., in their line “friends” other members Facebook a number of other and entities network). online operated websites participating com- program. In Facebook Beacon The class-action November alleged had vio- plaint “Beacon.” that the defendants program launched new called privacy of the lated various state federal purpose Facebook described plaintiffs’ of the program allowing Beacon its members statutes.1 Each Act, (1986); Privacy Specifically, 18 plaintiffs allеged violations Video Protection Privacy (1988); § of the Electronic Communications U.S.C. California’s Consumer 2710 Act, (1986); 1750; Computer Act, § § 18 U.S.C. 2510 Legal Cal. Remedies Civ.Code Act, § Fraud and 1030 Abuse U.S.C. allegation that decision general centered on the to distribute settlement funds violated participants Beacon had Facebook through grant-making a new organization, by gathering members’ privacy rights rather simply give than the funds to an publicly disseminating information about existing organization, at the suggestion of permission. their online without activities private overseeing mediator their ne- plaintiffs sought damages The and a vari- gotiations. Neither Facebook’s nor the ety equitable alleged for the remedies plaintiffs’ class counsel comfortable privacy violations. with selecting any particular advance non-profit non-profits or to receive the en- liability
Facebook denied filed tirety fund, so settlement ac- motion to dismiss the claims. ceded to the suggestion mediator’s Before the district court ruled on- Face- Facebook motion, up entity set a new whose sole book’s elected to at- parties purpose was to fund tempt settling through private designate recipients case their initial consistent with parties’ promote mediation. The settlement DTF’s mission to impasse privacy talks reached an over whether the interests of online and securi- ty. Facebook should terminate the Beacon program pеrmanently, but after two me- According to Articles of Incorpo- DTF’s diation sessions and several months of ration, DTF run would be a three- negotiations, plaintiffs and the member board of directors. The initial agreement. arrived at a settlement In three Larry directors were Magrid, a September 2009, plaintiff Sean Lane government’s member of the federal On- parties’ submitted the finalized settlement Safety line Technology Working agreement pre- court for the district Group and several online safety other or- liminary approval. ganizations; Hoofnagle, Chris director of terms of the settlement Privacy the Information Programs at the provided permanent- that Facebook would Berkeley Center for Law and Technology *7 ly program pay terminate the Beacon and and former an director for office of the a total in exchange million for a $9.5 Center; Electronic Privacy Information release of all the class plaintiffs’ claims. here, and most Timothy relevant Sparapa- Of the pay-out, approximately million $9.5 ni, Facebook’s Policy Director Public pay attorneys’ million would be used $3 and former the counsel for American Civil fees, costs, and administrative incentive Liberties Union. Articles of Incorpo- The payments representatives. to the class ration provided further that all of DTF’s Facebook the remaining would use $6.5 funding supported by decisions had to be million or so in funds to up settlement set at leаst two the members of three-member charity a new organization Digi- called the board of directors that the plan for (“DTF”).
tal Trust Foundation The stated required succession of directors unanimous purpose of DTF be would to “fund and approval. Finally, Incorpo- the Articles of sponsor programs designed to educate provided ration strictly that DTF would be users, regulators!,] enterprises and re- a grant-making organization and could not garding relating critical to protec- issues engage in lobbying litigation. or tion of identity personal and information control, online The through pro- provided user and the settlement also for tection of users threats.” the creation a of Legal from online The of Board Advis- parties’ DTF, ors respective counsel arrived at the within would which consist of Law, Computer §
and California’s Crime Cal. Pen.Code approval a final Following and settlement plaintiff both the class counsel the court heard hearing which district The Board purpose Facebook. Objectors, parties from the and the both be to advise Legal Advisors would certifying entered an order district court that it con- DTF to acted ensure monitor class approving the settlement the mission as articulated sistently with its class The court dis- settlement. district agreement. the settlement action consis- missed the class the district court certi- hearing, After a agreement, tent the settlement with plaintiff pur- class settlement fied jurisdiction implemеnta- maintained over par- preliminarily approved poses tion of The district court the settlement. The settlement proposed settlement. ties’ attorneys’ also class awarded counsel fees all Facebook members consisted of class in a order. amount of separate The the website a Beacon had visited who $2,322,763 attorneys’ fees was calculated at transmitted information that participant method, meaning under the “lodestar” that activity to the members’ Facebook about multiplied the court the number of hours period. during the relevant The district reasonably class on the case spent counsel identify all court ordered Facebook hourly That reasonable rate. amount to send the class notifi- class members and with for a total attor- combined costs Following that cation of settlement. neys’ $2,364,973, rep- award of which fees 3,663,651 order, class Facebook identified full resented less than one-third of the $9.5 members, it provided to whom notice of million settlement amount. ways. prin-
the settlement several Objectors appeal, contending now an cipal method was to send e-mail to discretion in district abused its posted members. Facebook also parties’ approving settlement. We in the “Updates” notice of settlement jurisdiction pursuant have U.S.C. ac- personal of members’ section § and we affirm. published separate counts and notice the newspаper the national edition of USA II All notice Today. forms of directed class approval A district of a court’s members to website and toll-free number accompa class-action settlement must be contained information about the set- finding nied by a the settlement tlement. “fair, reasonable, and adequate.” Fed. *8 23(e). Appellate R.Civ.P. review of the district pursuant Also to the court’s or- district court’s fairness determination is der, notice to class members informed limited,” “extremely will set and we aside right opt their out of them of to the lawsuit only upon “strong determination settlement, and and to file written that the court’s decision showing district objections or with the district comments of was a clear abuse discretion.” See before final At approval. court the conclu- 1011, Chrysler Corp., Hanlon v. 150 F.3d the 108 period, sion of notice class mem- (9th Cir.1998) (holding 1026-27 dis settlement, opted had out of the and bers trict court should have broad discretion objections. four had filed written The four exposed litigants, it “is the because and members decided to remain in class who (in strategies, positions proof’) their objections to the lawsuit but file the settle- omitted). ternal quotations McCall, Marek, Ginger Megan were ment Trotter, Benjamin and Patricia the Burleson Both district court this (collectively of a set- “Objectors”). must evaluate the fairness
819
whole,
assessing
stage
certification,
as a
rather than
before formal class
tlement
the
id. at 1026.
components.
effectively
individual
See
court “cannot
its
monitor
clear,
precedents
collusion,
settlements,
have
the
As our
made
individual
buy-offs
(where
whether a settlement
funda-
question
individuals
ac-
some
use the class
meaning of Rule
mentally fair within the
tion
to benefit
device
themselves at the
23(e)
abuses”).
from
wheth-
question
absentees),
is different
the
expense of
and other
the
perfect
settlement is
estima-
er the
when
Accordingly,
reviewing a district
id. at
reviewing
tion
the
court. See
of a
approval
court’s
class settlement
Although Rule
strict
imposes
23
certification,
formal
reached before
class
requirements
approval
on the
procedural
affirm
we will not
if it
the
appears that
settlement,
of a class
a district court’s
district court did not evaluate the settle-
in reviewing the
of that
role
substance
sufficiently ment
account for
possi-
the
“fair,
is to
it is
settlément
ensure that
bility
representatives
that class
their
adequate, and free from collusion.” See
counsel have sacrificed the
ab-
interests of
id.
sent class members for their own benefit.
guide
A number of factors
the
The settlement in this
pro
case
in making
district court
that determina
cy pres
vides for a
remedy. A cy pres
tion, including:
remedy, sometimes
recovery,”
called “fluid
case;
strength of
the
the
Fleet Mortg. Corp.,
v.
356 F.3d
Mirfasihi
risk, expense,
likely
complexity, and
du-
(7th
781,
Cir.2004),
784
is a settlement
litigation;
ration
further
risk of
structure wherein class members receive
maintaining
through-
class action stаtus
(usually
an indirect benefit
through defen
trial;
out the
the amount
set-
offered
dant donations to a third party) rather
tlement;
discovery
the extent of
com-
monetary payment.
than a direct
weAs
pleted
stage
proceedings;
and the
recognized,
recently
“cy
pres doctrine
counsel;
experience
and views of
allows a court
distribute
or
unclaimed
governmental
of a
presence
participant;
portions of a class action
non-distributable
the reaction of the
members to
class
settlement fund
the ‘next
best’ class
proposed
settlement.
AOL, LLC,
Nachshin v.
beneficiaries.”
(hereinafter
(9th
1034,
Cir.2011).
1026
the “Hanlon fac
1036
Id. at
663 F.3d
For
here)
tors”).
(as
Additionally,
purposes
cy
doctrine,
pres
when
a class-
place
takes
formal class
fund
settlement
before
action settlement
is “non-distributa
certification,
requires
settlement
ble”
approval
proof
when “the
of individual claims
“higher
standard of
See id.
fairness.”
would be burdensome or distribution of
costly.”
exacting
damages
The reason
more
review of
See
at
(quoting
id.
settlements
formal
class
reached before
Six Mexican Workers v. Ariz. Citrus
Growers,
(9th
certification is to
that class
ensure
904 F.2d
Cir.
*9
1990)).
do
representatives and their counsel
not
The district
a
court’s review of
“at
disproportionate
cy
secure
the
class-action settlement that
benefit
calls for a
pres
of the
who
is not
expense
plaintiffs
remedy
substantively
unnamed
different
any
duty
represent.”
сounsel had a
to
from that
other
class
of
class-action settle
1027;
at
see
Gen. Mo ment
that the court
except
See id.
also In re
should not find
fair,
Corp.
adequate,
Tank
Pick-Up
tors
Truck Fuel
the settlement
and reason
(3d
cy pres remedy
F.3d
787
Litig.,
“aecount[s]
Prods. Liab.
55
able unless the
Cir.1995)
lawsuit,
less in
of the
the
(explaining
plaintiffs’
for the nature
“[w]ith
early
objectives
statutes,
the underlying
formation about the class” at the
of
and
“reasonably
the silent class mem
that class counsel had
conclud-
of
the interests
” Nachshin,
the
represent-
at
ed that
immediate benefits
....
663 F.3d
bers
outweighed
pos-
the
the
ed
Settlement
obtaining
Ill
sibility perhaps remote —of
—
(7)
trial”;
no government
better result at
challenge the district court’s
Objectors
objections or
an-
agencies voiced
otherwise
in this case
that the settlement
conclusion
arising out of
nounced actions
Facebook’s
reasonable,
“fair,
and
with-
adequate”
was
(8)
program;
Beacon
and
four class
23(e).
Rule
district
of
meaning
in the
objected
than
“slightly
members
and
more
after
at that determination
court arrived
from a
opted
100”
class of over 3.6 million
Objectors’
statements
written
considering
the
out of
settlement.
hearing
a fairness
where
holding
Objectors
two issues in opposition
raise
Objectors an
to be
provided
opportunity
findings.
to the district court’s fairness
accompanied
court
its
heard. The district
agree-
The first relates to the settlement
fact,
of
findings
fairness conсlusion with
provision
cy pres remedy.
ment’s
application of
which included the court’s
The second
to the
amount
relates
overall
parties’
factors
the
eight
the
Hanlon
Objectors
the
of the settlement.
also raise
agreement.
settlement
ancillary argument
that notice to class
factors,
the district
Weighing those
concerning
members
the
was
settlement
that the settlement should be
found
inadequate. We address each of these
(1)
of
approved
following:
on the basis
the
issues
turn.
un-
legal
on
theories and
reliance
novel
the
clear
factual
issues undermined
(2)
case;
the
strength
plaintiffs’
of the
Objectors’
strongest objection
first
complex nature of the
of
goes
to the settlement
structure
expense
increased
of further
the risk
DTF,
organization
that would distrib-
(3)
litigation;
the class
could be
action
cy pres
ute
funds under the settlement
time,
“generally
decertified at
which
agreement. Objectors
contend
settlement”;
weighs
approving
favor of
presence
Sparapani,
of Tim
Di-
Facebook’s
(4)
light
litigation
risks and
“[i]n
[the]
Policy,
rector
Public
on DTF’s board
involving
the context of settlement claims
conflict
unacceptable
an
directors creates
infringment
privacy rights,”
of consumers’
prevent
of interest
that will
DTF from
recovery
the class’s
million
“sub-
was
$9.5
acting
Citing
in the
interests of
class.
purpose
stantial” and “directed toward a
Workers, Objectors
Six Mexican
claim
closely
interests
related to Class Membеrs’
that the settling parties’ decision to dis-
(5)
parties
in this
had en-
litigation”;
through
organi-
burse settlement funds
an
in-
gaged
significant investigation and
zation with such structural
does
conflicts
research,
discovery and
which in
formal
provide
“next best
distribution”
addition
information about Beacon
those funds
thus is
an
categorically
already publicly
known enabled
cy pres remedy.
use
improper
plaintiff
to “make an informed deci-
settlement,
respect
Objectors’ argu
sion with
even
disagree.
We
though
discovery”
yet
cy
formal
pres
had not
been ment misunderstands
doctrine
(6)
completed;
“only
that a
principle
the settlement was
and the
from our case law
*10
provide
achieved
“next
protracted
cy pres remedy
after
intense and
must
the
monetary
in
arm’s-length negotiations
a
conducted
best distribution” absent direct
collusion,”
faith
from
do
good
payment
and free
absent class members. We
require
part of that
doctrine that
are unrelated to the class’s interests or
settling parties
cy pres recipient
select a
because their geographic scope is too limit-
that the court or class members
Workers,
would find ed. See Six Mexican
904 F.2d
contrary,
1308; Nachshin,
ideal.
the
such an
On
intrusion
at
at
663 F.3d
1040. The
private parties’ negotiations
into the
cy pres remedy
would
settling
the
parties here
devised,
improper
disruptive
be
to the settle-
have
bears a direct and substantial
Hanlon,
process.
ment
See
150 F.3d at nexus to the interests of absent class mem-
1027. The statement
in Six Mexican
properly
bers and thus
provides for the
in
Workers and elsewhere
our case law “next best distribution” to the class.
that a cy pres remedy must be the “next
We find no substance in Objec
best distribution” of settlement
funds
tors’ claim that the presence of a Facebook
means
that a district court should not
employee on DTF’s board of directors cat
approve
cy pres
distribution unless it
egorically precludes DTF from serving as
bears
substantial nexus to the interests
entity
the
that will distribute cy pres
that,
of the class
as we stated
members —
funds. As
“offspring
the
of compromise,”
Nachshin,
in
cy pres
remedy “must
Hanlon,
150 F.3d at
settlement
account for the nature of
agreements
necessarily
will
reflect the in
lawsuit,
objectives
underlying
of the
parties
terests
both
settlement,
to the
statutes,
interests of the silent
”
including those of the defendant. Defen
class members....
properly parties’ the furthered by second-guessing remedy and the interests cy pres gotiations fairness review over of its part decision consistent with plaintiffs’ the lawsuit agreement. the settlement we announced Nachshin. principles the Objectors’ claim reject We also settling that the Objectors’ contention cy pres agreement’s that the settlement creating DTF prohibited from parties were the because impermissible is structure merit, cy pres funds is without to disburse grant-mak a new create elected to parties its the court did not abuse and district DTF, give cy pres than rather entity, ing concluding. discretion so privacy online already-existing an funds to citing Mexican Six Again organization.
Workers, that DTF has argue Objectors is of service” and record “no substantial appeal Objectors’ argument second on is cya inherently disfavored as therefore sufficiently court not that the district did never held But we have pres recipient. compare claims and plaintiffs’ evaluate the chari go must to extant cy pres funds with the class’s the value of those claims review, fairness in order to survive ties million recovery the settlement $9.5 agreement provides and a settlement Objectors contend that the agreement. grant-making of a new the formation for claims was in fact value of the subject to a more strin is not organization plaintiffs The reason we million the gent greater fairness standard. than $9.5 Mexican it in Six Workers found relevant for, some large part settled because designated to charity organization that the the class members unidentified number of no cy funds had “substantial pres receive Privacy may have a claim under the Video no that there was record of service” was (“VPPA”). pro- Act The VPPA Protection organization way knowing whether tape provider” service hibits “video of class use the benefit would funds in- disclosing “personally from identifiable Workers, 904 members. See Six Mexican consumers, one of its and formation” about Here, there is no such F.2d at 1308: in the provides liquidated damages worry, the settlement because $2,500 provi- of its amount of violation us Incorporation DTF’s Articles of tell and 2710(b) §§ and sions. 18 U.S.C. “fund exactly how funds will be used—to 2710(c)(2). Objectors contend that the dis- designed to educate sponsor programs and sufficiently mindful of trict court was users, re regulators^] enterprises possibility that the class’s VPPA relating protec garding critical issues trial, yield high recovery at would identity personal information tion of approved not have that the court would control, pro and the through online user paid if it had settlement of million $9.5 As of users from online threats.”4 tection possibility. attention to that proper that mission statement explained, have we Legal supрose that both the Board of son to can be structured both to ensure Facebook's promote (consisting settling par- are not harmed and to interests Advisors of both (which plaintiffs’ general counsel) interests in the causes of ties' and the district security. privacy online jurisdiction implementation of over retained settlement) responsi- would abdicate their Objectors suggest that there is no assurance according bility performs to ensure that DTF perform with that DTF would in accordance agreement. to the settlement document, charter the strictures of its unsupported speculation. no There is rea-
823 matter, reject an initial As we Ob Both before and after the final settlement jectors’ argument insofar as it stands for approval hearing, the district court specifi- proposition the that the district court was cally possibility addressed the the monetary required specific to find value presence of VPPA claims among some corresponding plaintiff to each of the might class members affect the class set- statutory compare class’s claims and the In tlement. its order preliminarily ap- those proffered value of claims to the set settlement, proving the the district court tlement award. aWhile district court notified parties the that “final approval will plaintiffs’ must of course assess the claims require a sufficient showing that terms of in determining the of strength their case reasonable, the settlement arе specifically litigation, relative to the risks of continued light VPPA, the claims under the Hanlon, see at F.3d it need not apparent availability statutory approval include in its specific order a penalties added). thereunder” (emphasis finding potential recovery fact as to the Following instructions, the district court’s plaintiffs’ for each of the causes of action. parties did address VPPA issue only requirement Not would such a be their briefing arguments at the final onerous, it impossible— would often be approval hearing. The district court also aside, statutory liquidated or damages Objectors heard from at that hearing, who (or damages amount of a given plaintiff again argued that the settlement was too plaintiffs) ques class of has suffered is a low in light possibility recovery tion of fact that proved must be at trial. under the VPPA. statutory Even as to damages, questions of rejected The district that argu- pertaining fact to which class members ment. It first Objectors observed that had have under the various causes of “brought not to the Court’s attention recovery action would affect the amount of plaintiffs cases which have been award- trial, making any prediction at thus about ed multiple liquidated damages,” which if recovery speculative contingent. likely available would increase the class’s Relatedly, the district court was potential recovery under the VPPA sub- required among to include findings its (even stantially if only a small number of specific commentary on each of the plain claims). class members had VPPA statutory tiffs’ five claims. All of the district court further bringing noted that plaintiffs’ claims priva arise under similar the VPPA claims to trial would involve statutes, cy correctly and as Facebook significant given risk for the class that the out, points plaintiffs’ likelihood of suc plaintiffs’ legal claims relied on “novel the- regard cess with to each of those claims “vigorously disputed” ories” and factual depends legal on the same basic theories concerning issues the Beacon program. and factual issues. The court act district although And the district court did not properly evaluating ed the strength of approval order, mention it in its par- plaintiffs’ entirety case in its rather presented ties had evidence to the court claim-by-claim than on a basis. See Han Blockbuster, one of the defen- lon, 150 at F.3d might qualify dants that tape “video
Moreover, the provider” record contradicts service subject therefore be Objectors’ general argument VPPA, that the liability dis under the was on the trict court did not meaningfully verge likely account for of bankruptcy, making any claims, potential value of the damages against substantial it annihilative. including any factors, claims under the VPPA. Based on its consideration of these *13 recovery among or the million all class concluded that the $9.5 “$9.5
the district members too low.5 settlement is substan- in offered million tial.” Objectors rely significantly on Molski v. (9th Cir.2003) Gleich, 937, F.3d 949 318 overruled, was abuse not an
That conclusion
grounds
Dukes v.
on other
A
court’s broad discretion.
of the district
Stores, Inc.,
(9th
with this requirement circuit’s that district apply heightened to a review Objectors argue additionally that the no- class-action settlement reached before for- provided tice to class during members mal certification. See id. at 1026. This is opt-out period was insufficient because it particularly manifest that the distriсt did not describe the value of the approval court’s detailed order included statutory claims accurately and “did not specific factual finding that the settle- describe what the class members would agreement ment “was achieved after in exchange receive for the release” of protracted intense arm’s-length nego- Objectors those claims. argue particu- tiations in good conducted faith and free lar that the notice should have included a Objectors from collusion.” have not made statute, description of the VPPA that it any one, showing, “strong” let alone a that should have alerted class that members this or of the district court’s other employee would be on the findings board was erroneous or amounted to a organization distributing cy “clear abuse of pres discretion.” See id. at funds, its reference to Facebook’s more than million or to hold out for $9.5 was mislead- Beacon to terminate promise cy pres particular recipient already dormant. insist on Beacon ing because funds, require disagreement does not provided Notice disagree. We settling par- reviewing court to undo 23(e) “generally must to Rule pursuant The district court private agreement. ties’ the settlement the terms of ] describe! review of limited its substantive properly those with adverse to alert sufficient detail necessary to determine for and to come investigate viewpoints “fair, and free from аdequate, that was Rodriguez v. West heard.” ward and be id. collusion.” See (9th 948, 962 Cir. 563 F.3d Publ’g Corp., AFFIRMED. omitted). 2009) (internal That quotations analysis detailed require standard does KLEINFELD, Judge, Senior Circuit forming of action or causes of the statutes *15 dissenting: claims, class’s plaintiff for the the basis This settlement respectfully I dissent. require an estimate and it does not into a device for perverts the class action id. of those claims. See potential value wrongs, for (notice victims of remedies depriving “expected include value of need not case”). enriching wrongdoers both the while Nor is there fully litigating the represent lawyers purporting to in a requirement that notice any particular class. involving cy pres class-action settlement sitting on the
remedy name the individuals A. The Facts. directors, even cy pres recipient’s board has some associ if one of those individuals “Beacon.” Fi in the case. ation with the defendants themselves to people Millions of connect reject reasons we Ob nally, for the same Face- their “friends” on Facebook. Some promise that Facebook’s jectors’ argument in the tradition- book “friends” are friends illusory, there to terminate Beacon was sense, like. people al we know and Some referencing nothing misleading about contacts, in or are more the nature in the class notice. promise may think acquaintances, people or we agree We with the district peoplе For who post. want to see what we adequately the notice this case communicate, regularly use Facebook all material ele apprised class members of merely their may “friends” be address agreement and ments of the settlement case, plaintiff in this Sean book. The lead complied requirements with the therefore Lane, over 700 Facebook “friends.” had 23(e). of Rule board, so operates like a bulletin that “friends” can see whatever user
y private. post and not make chooses “free,” furnished without Ultimately, Objectors’ find little in Facebook is we company makes subscription price. The opposition to the settlement be- advertising. To make money by selling the out- yond general dissatisfaction with lucrative, Facebook may very such sales more start- come. That well dissatisfaction in Novem- Objectors program ed a called “Beacon” legitimate be insofar as would beacon, pro- an actual differently assumed 2007. Like they have acted had ber something make easier gram light But shone representatives. the role of class case, a user’s “friends” Objectors may vigorously disagree to see: this while bought from see whatever he had representatives’ with decision could companies paid partici- Facebook to surprise wife, stock.com as a for his pate forty companies her, Beacon. Over gave before he it to Facebook ruinеd Beacon, signed up including for Blockbus- surprise by spreading the news to his ter, retailer, Zappos, a movie a shoe and “friends,” over 700 including many alumni retailer, Overstock.com, clothing a dis- college in his Ginger class. McCall states counter. If a Facebook user rented a that her video rentals at Blockbuster were Blockbuster, example, movie from Fa- disclosed to all her “friends.” Of the vast cebook told all his Mends what movie he number people purchases whose were retailers, had rented. Facebook told “Fa- broadcast, no doubt some suffered embar- your cebook Beacon enables brand or busi- rassment, and some damage suffered gain ness to access to viral distribution business, employment, personal or rela- within Facebook. Stories of a user’s en- tionships. Some Blockbuster rentals your with gagement site.... will act as erotica, doubtless included some Over- promotion your word-of-mouth busi- purchases stock.com probably included may ness and be seen friends who are gifts meant to expensive look more than likely your also to be prod- interested were, and some Zappos purchases uct.” probably were extravagant more than pur- spouses chasers’ were aware. Someone
Many objected Facebook users strongly *16 who had told her college classmate that losing privacy purchases. to the of them she could not attend her all, wedding because people ordinarily post After on their she plane could not afford the fare could page only they Facebook what want to lose a friend when Facebook told her they post, and had not elected to tell all classmate that bought she’d shoes. they just $400 their “Mends” what had bought. Mr. complains Lane that his wife asked people buy things Some on the internet him ring purchase about his before he precisely they privacy because want more her, gave it ruining to his gift Christmas to they than would have at a local store. her. might His wife also have been less away privacy, Beacon took their and impressed by ring the than he had hoped, purchases broadcast their people to who since she and all his other friends could users wanted to remain in the dark. click a link and see that he bought had it Worse, Facebook it very made hard for cheaply good advertising Over- — users to avoid these broadcasts. The user stock.com, bad for advertising Mr. Lane’s actively opt had to out. opting And out generosity. required game video skills. The user get pop-up would on asking his screen Many private users’ purchases were ex- out, whether opt he wanted to but the pop- 50,000 posed, complained. and over With- up disappear would in about ten seconds. in a (long few weeks before this lawsuit reading Too slow pop-up clicking the or filed), was opt-out Facebook eliminated the mouse, the all a user’s “Mends” would program. Beacon chаnged Facebook it to exactly know what he bought. had Since an opt-in program, so that users did not pop-up disappeared the so quickly, some- game need to maintain video alertness to looking window, one at another or answer- avoid disclosure to all their In Mends. the ing phone, just attention, the paying or Beacon, opt-in purchases version of made likely would not even be aware of the opt- in private stayed private unless the user option disappeared. out before it expressly publicize allowed Facebook to alleges Plaintiff Lane objectors Sean the com- them. One of the to the settle- ment, plaint bought ring McCall, that he Ginger says from Over- her movie rent- majority that Facebook Beacon had The states even after als were disclosed pro- to promised never revive the Beacon and no changed opt-in, to an supposedly right. this Face- gram, quite is not the have been made on whether findings program, free book remained to revive tricky operate. or to worked was opt-in the cancelled version under which even only opt had seconds to subscriber few The Settlement. only out. The limitation the settlement 2008, August imposed was that Facebook had to call the lawsuit was filed This name. program by Beacon some other opt-out ver- eight months after about agreement said that Facebook would The complaint Beaсon had ended. The sion of Program,” “the and de- terminate Beacon opt-out program challenged program fined “Beacon” mean “the weeks, opt-in for a few not the had lasted by launched Facebook on November then. place version that had been since bearing 2007 and all iterations thereof settled, all be- parties The mediated and ” added). name The (emphasis ‘Beacon’ They agreed fore class certified. term, and judge district asked about this was, Beacon, it then opt-in to end both attorney expressly conceded originally. opt-out as had been was free the same to reinstitute agreement approved The settlement program “[T]he under different name. view) (mistakenly, my the district problem you was when tried to describe changed aspect greatly functionality you preclude Face- First, certify parties agreed case. using functionality going book from purposes the class for of settlement. Sec- forward, it truly problematic becomes ond, agreed beyond it far expand impossible an becomes to reach complaint sought. com- what the had you’re run limiting ability because their *17 damages af- plaint sought only for users day, them business.... At the of the end during they could not reach with defen- fected few weeks when we out, ac- regarding limiting dants their future opt expand- had to but settlement an on corporation.” tions as a That was everyone the class to affеcted ed include injunction the record that the concession during opt-in period. the much longer said, meant as little as it and Facebook got the members of the class no Since free to done remained do what had settlement, money from the the effect of before, in- under different name. The expansion any bar certification was to junctive relief the class received was no have, expanded might claims the all, not on fu- relief at even a restriction provide recompense. to more with people ture identical conduct. exchange for nothing, In class members Facebook, were barred from Block- suing dam- Facebook users who had suffered buster, Overstock.com, other any or ages past exposure purchases from of their any for from or arising nickel, defendants got money, no not a from the defen- Beacon, videos, relating to lim- “including, without Even those rented dants. who had itation, arising arguably statutory from or related to data and were entitled to $2,500 disclosure,1 gathered damages got from Beacon.” each for ("A 2710(b)(1), (c)(1) (2) by any § aggrieved person 1. 18 U.S.C. video in viola- act of — tape provider knowingly bring may service who dis- of this section a civil action tion closes, any person, personally to identifiable in a United States district court. The (A) damages concerning any may information consumer actual but not less award — provider liquidated Any person damage shall in an аmount of such be liable.... than had, counsel, agreement provided on the other The nothing. “privacy Class lawyers millions. Plaintiffs’ and Face- foundation” was to use its millions to got “fund projects that Facebook would not ob- agreed promote initiatives that book ject attorneys’ up safety, fees to one third of cause of online privacy, to and securi- ty” they Facebook-friendly called the “settlement fund.” however its what board $3,166,667. would be a fee of chose. One third fee would come out of the “settlement
The Analysis. B. it, fund” and would not be addition to so Facebook had no economic interest re- designed The class action rule2 was to actually ducing ap- the amount. The fee facilitate lawsuits where individuals’ or $2,322,763 by the district court proved groups’ judgments up small would not add $42,210.58, plus costs of 25% of the “settle- enough money justify lawyers, to hiring payment ment fund.” That million $2.3 judgments large numbers of simi- getting nothing was for their clients and larly situated victims of misconduct would. barring vastly all the claims of a broad- policy very “The at the core of the class ened class. action prob- mechanism is to overcome lem that small recoveries do not provide remaining
Not a cent of the
“settlement
the incentive for
bring
individual to
money
go
fund”
would
to the Facebook
prosecuting
solo action
his or
rights.
her
pur-
on whose behalf class counsel
users
A
problem by
class action solves this
ag-
portedly
exceptions
settled. The
were
grеgating
relatively
paltry potential
$10,000
Lane, $5,000
Mr.
each to two
something
recoveries into
worth someone’s
others,
$1,000
each to the other 19
(usually
attorney’s)
an
labor.”3
$39,000
plaintiffs, amounting
named
people
presum-
the few
in the class who
procedural
This
device has obvious at-
ably
personally agreed
had
to have class
risks,
tendant
because class counsel’s
represent
counsel
them.
“clients” are not clients at all in the tradi-
sense;
tional
they
lawyer,
do not hire the
remaining
go
millions were to
to a
they
him,
agree
new
foundation” that
do not
on a fee with
“privacy
yet
did not
exist. The board of the new foundation
do not control whether he settles
agreed upon
They
position
would be three directors to be
their case.
are in no
*18
counsel,
by
they
prevent
Facebook and
or if
pursuing
class
class counsel from
his
disagreed
by
one chosen
each and the
own
expense.4
interests at
their
The
by
third chosen
two.
plaintiffs,
actually
those
Under the
named
those who
have
agreement, all three directors could come
some chance
directing
lawyers,
their
advertising
typically get
from the Facebook
and sales
amounts of cash without
staff if class counsel and
damages,
Facebook so much relation to their individual
“pri-
chose. The board of directors of this
so their
align
incentives
more with class
vacy
by
foundation” was to be advised
counsel than with their fellow class mem-
lawyer
own
Facebook’s
and class counsel. bers.
$2500;
(B)
(C)
Products,
Windsor,
punitive damages;
reason-
3. Amchem
Inc. v.
521 U.S.
591, 617,
2231,
attorneys’
litigation
able
fees and other
costs
117 S.Ct.
2.Fed.R.Civ.P. 959-60 clients, judges for real because counsel, substitute and class
Defendant beyond the case what in know little about action, to collude incentives have class much lawyers them. That works bet- tell for victims’ claims to bar agreement an different sides victims, lawyers when the are on ter to the compensation or no little on the same side. than when are attorneys’ fee to big enough for a exchange may prob- face an incentive Judges also pur- interests of the betrayal of the induce lem, easily cannot heavy where a docket agree- The defendant’s “clients.” ported weight huge of a the additional withstand for the some amount oppose ment not to Objectors does not settle. lawsuit that pay- incentive as a the same fee creates pro- critically a valuable service provide fight. A to throw prizefighter to a ment knowledge point from a different viding that is may refuse a settlement client real view, that is too often not used but one lawyer, but a his for him but benefits bad sup- is effectively. process Our review individuals lacks class of unknown large of a clаss posed to assure that settlement authority say no. It knowledge or action, incen- despite perverse the risk of saying client imagine real is hard tives, “fair, reasonable, adequate”6 is objection “I have no to the lawyer, his given that notice is “in a reasonable you money paying lot of defendant by bound the set- manner”7 so those nothing to seek exchange for opportunity an to be heard. tlement have individual me.” “The absence of their controlling litigation clients case, process In this has failed. The for collu- opportunities own benefit creates obtained a attorneys for the class have can arrangements in which defendants sive judgment for millions of dollars fees. attorneys plaintiff for the class pay the defendant, Facebook, The has obtained enough money to induce them to settle by judgment millions bars for too little benefit to the class action have people victimized its conduct. So (or attorneys, too much benefit to the class in Beacon. companies the other involved is weak but the risks to the if the claim victims, hand, have ob- on other high).”5 defendants settlement, nothing. Fa- tained Under the preserved right to do the cebook even against these risks protects Rule 23 thing again. to them same traditionally pro- courts have much as the attorneys risks when against tected similar Unfair, 1. The Settlement Unrea- children, estates of deceased represent sonable, Inadequate. persons, persons, by requir- and unknown action evaluating The factors for ing judicial approval Ap- of settlements. review, settlements8 are multifarious and indeter- proval though, are a weak *19 trial; Corp., throughout the amount offered v. Petroleum 192 tus the 5. Zucker Occidental 1323, settlement; (9th Cir.1999). discovery the extent of com- F.3d 1327 stage proceedings; pleted and the of the the 23(e)(2). 6. Fed.R.Civ.P. counsel; pres- experience and views of the participant; governmental and the ence of a 23(e)(1). 7. Fed.R.Civ.P. proposed reaction of the class members to the settlement.”) (citation omitted); See, Chrysler Coip., e.g., 8. Hanlon v. 150 F.3d Officers for 1011, Francis- (9th Cir.1998) Justice v. Civil Serv. Comm'n San ("Assessing 1026 a settle- of co, 615, (9th Cir.1982) (noting F.2d 625 688 proposal requires ment the district court "by that such factors are no means an exhaus- strength a number of factors: the of balance case; risk, tive list of relevant considerations.... expense, com- the degree importance relative of to be attached plexity, likely litiga- duration of further tion; particular depend upon and maintaining factor will the risk of class action sta-
831
settlement,
mínate,
the cases have become less
and courts therefore must
but
be
(cid:127) not
tolerant of settlements
beneficial to particularly vigilant
only
not
for explicit
extremely
used to be
class members. We
collusion, but
signs
also for more subtle
approved
when district courts
deferential
pursuit
that class counsel have allowed
settlements,
Chrysler
as in Hanlon v.
their
own self-interests and
of certain
majority
on
Corp.,9the 1998 case which
negotia-
class members
to infect
17
years
in the last few
relies. We have
tions.”
so,
become much less
as
our recent
likely
Collusion is far more
before certi-
Bluetooth,10
decisions In re
Nachshin v.
fication,
if
exponentially higher
LLC,11
AOL,
Kellogg
and Dennis v.
Co.12
expanded
part
class is
of the settlement.
We still exercise deferential
review
why.
only
Here is
If a lawsuit is
on behalf
discretion,
light
abuse of
do so
plaintiffs,
of named
damages are limited to
Bluetooth, Nachshin,
rejected
what we
receive,
they may properly
what
if
so
a
and Dennis. Review for abuse of discre-
defensible,
reasonably
case is
a defendant
tion has never meant that we will affirm
may
make
sound financial decision to
whatever
district
does.13
certified,
But if a
defend.
vast class is
extremely important qualification
An
then even a
may require
meritless case
“higher
in Hanlon was a
standard of
even
money
defendant to settle or bet all the
fairness”14 when settlement is reached be-
fees,
attorneys’
has or can borrow for
be-
case,
In this
not
fore
class is certified.
very
cause even a
small chance of a very
reached
class
was settlement
before
large
is too much
verdict
to risk. Plain-
certification, but the class certified for set-
certification,
tiffs’ counsel want
to make
was far broader than the
purposes
tlement
damages enough
to be worth the time
the case was filed. The
sought
one
when
expense
litigation.
Defense
“higher
of fairness” mat-
Hanlon
standard
it,
oppose
keep
counsel
the risk down to
dangers
“the
of collusion
ters because of
a level where
can afford the risk of
between class counsel and the defen-
15
litigation. Because certification of a class
emphasizes
dant.”
Bluetooth
the need
may
plaintiffs
turn even a meritless
case
greater scrutiny
precertification
set-
case,
a bet-the-company
of a
into
defendant’s
tlement on behalf
class.16“Collusion
always
usually
of a
may
vigorously oppose
be evident on the face
defendants
claim(s)
1990)
(finding
cy
be dictated
the nature
ad-
that a district court's use of
vanced,
type(s)
sought,
pres to
unclaimed
of relief
and the
distribute
settlement funds
unique
presented by
was an abuse of discretion because it did not
facts and circumstances
case.”).
"adequately target
plaintiff
class and
each individual
provide adequate supervision
fail[ed] to
over
Hanlon,
distribution”).
9.
F.3d 1011.
150
Hanlon,
1026;
10. In re Bluetooth Headset Products Liab. Li-
14.
150 F.3d at
see also Molski
935,
Gleich,
937,
(9th Cir.2011).
(9th Cir.2003),
tig., 654 F.3d
v.
318 F.3d
953
grounds by
overruled on other
Dukes v. Wal-
AOL, LLC,
Stores, Inc.,
(9th Cir.2010).
11. Nachshin v.
663 F.3d
Mart
certification, any of claims of kind from the courts the benefit giving present day. They to the came about time presentations. adversarial they plаusibly that could. as close to as settle, and agree to parties Once class, emphasizes that “clear sail- certify defendant’s inter- Bluetooth to agree attorneys’ on fees are ing” agreements Plaintiffs’ counsel still are reversed. ests important warning signs class of collusion.18 keeping large have an interest class, sailing agree- of a clear certified, larger the the We have version because the not likely be. ment here: Facebook’s to attorneys’ fees are to higher the oppose attorneys’ up an fees claim of to get against if will a bar But the defendant here, $3,166,667. If, claims, of settle- as the defendant always almost a term oppose attorneys’ an fees ment, agrees whose claims are not to people the more claim, will be the having payout The risk of and defendants barred the better. is, high then money gets of same no matter how the fee pay huge out a amount certification, converted, into a cer- both sides have an incentive to make the by class people large enough plaintiffs’ numbers of will be fee to induce coun- tainty that vast plaintiffs’ the defendant. So when sel to sacrifice class interests unable to sue certification, attorneys’ settling class and interests. Bluetooth holds before when, especially necessary as of caution is as agreeing upon part class certification here, settlement, have the same members of the class receive no both sides incentive, money, great make it but class counsel receive a certify the class and deal of it.19 As the amount of the fee to all-encompassing possible. as vast and objection grows, if no will be It is a bonanza for the defendant it can which made if not affect everyone especially bar the claims not of the fee will the cost defendant, complaint, in the but also to the it makes economic sense class described sense) (though larger of a much class on whose behalf not ethical might fight money. different claims have been counsel to throw the for the more and asserted. goes Strikingly, the settlement here settlements, just coupon further than happened
And
what
here.
even
wrongdoing against
get only
where class members
discounts if
complaint
claims
they buy again from defendant claimed
damages
during
to Facebook users
before,
opt-out period
wronged
of “Bea-
to have
them
while their
few weeks
lawyers
purported
get huge
con.” The settlement bars claims of all
amounts of
during
during money.
get
Here the
users
period
the users
all,
longer opt-in period.
nothing
coupons. Every
the much
at
even
When
$9,500,000
settled, Facebook and
counsel shared
nickel of the remainder of the
interest,
cut,
after
the same
as broad
class certifi-
class counsel’s
administrative
costs,
possible. Ideally,
payments
cation as
from both the
and incentive
tо the
(attor-
victims,
point
goes
named
not to the
plaintiffs,
view both sides’ interests
side,
neys’
protection
entity partially
fees for one
from but
to an
controlled
other)
for the
in- Facebook and class
The new en-
the class would
counsel.
world,
tity,
everyone
good
clude
in the
and bar all
dressed to look
old law
Bluetooth,
("[A]
exchange
18.
In re
833 on the inter- people’s purchases privacy “non- award and “cy pres” its French with by information and the use of customer net status, money to spend can profit” Facebook. the in- privacy on about people “educate” vid-
ternet, some instructional via perhaps law tends to to make action- Tort evolve features privacy all the how to use eos on harmful, widely espe- seen as able conduct in Facebook. available willful, it the conduct is as was cially when claims and the risk of here. The if all be done no harm would Arguably, worth mon- of tort law were that evolution users to Facebook wrongdoing claims avoid, cannot for Facebook. We ey to frivolous. program were from the Beacon mil- say thаt a risk worth reasonably $9.5 worthless, no then claims were If their had to Facebook to avoid nevertheless lion claims when those done to them wrong is potential claim- no value whatsoever gets million trans- are barred $9.5 If presented that risk. ants whose they never met and lawyers ferred to some claims, users had no colorable Facebook them. likely to benefit entity a new paid have million why would Facebook $9.5 the claims too denigrate But that would to bar them? that Face- to believe There is reason far. million the shield its needed $9.5
book
does not Meet our
2. The Settlement
com-
got customer
bought.
Facebook
Cy
for
Pres Awards.
Standards
opt-out
from the
publicity
bad
plaints and
number,
million
Even if the $9.5
The class had colorable
program.
Beacon
(cid:127)
fees,
attorneys’
and the absence of
good argument
had a
Facebook
claims.
to class
all
relief whatsoever
members
tape
a “video
service
it was not itself
“fair,
adequate,”
reasonable and
were
statute enti-
under the federal
provider”
satisfy
still not
new foundation would
damages of
liquidated
tling a customer
cy pres awards. We held in
standards
$2,500
videotape
disclosure of what
quoting Staton v.
Kellogg
Dennis v.
Co.24
Blockbuster,20
from
had rented
someone
-
Co.,25
cy pres
Boeing
distributions
of vicari-
a risk of some sort
still had
danger” that “incen
present
particular
“a
ous,
liability.21
joint,
conspiracy”
or “civil
rath
favoring pursuit
self-interest
tives
liable,
deеp pocket target
If found
was
in fact influ
than the class’s interests
er
for which the
damages
punitive
for the
negotiations.”26
enced the outcome of
And at least
provides.22
expressly
statute
traditionally
taken an
a means
Cy pres
court has
was
one federal district
which,
charity
long-
no
tape
say, bequest
is a “video
expansive view of who
making
might
a testator died
be
prohibited
existing
from
er
when
provider”
service
charity doing
given
in the
instead to
similar
alleged
The facts
disclosures.23
bequest
Boys’
to the
work. Thus a
about the
similar
a concern
complaint stimulate
(c)(2).
Lay,
F.Supp.2d
2710(a)(4),
v.
758
23.
LLC
§
20. 18 U.S.C.
Amazon.com
n
1154,
(W.D.Wash.2010).
1167
complaint, Plaintiffs claimed that
In their
11-55674,
Co.,
Kellogg
2012
24. Dennis v.
No.
conspiracy
engaged in a civil
13, 2012).
(9th
July
Cir.
WL 2870128
Privacy
Act. See
the Video
Protection
violate
Equip. Corp. v. Litton Saudi Arabia
Applied
475,
Co.,
(9th
Ltd.,
503,
Cal.Rptr.2d
Boeing
869
Club
the district court
The
Boys’
cy pres
and Girls’ Club.
has must ensure that a
targets
doctrine
award
simply
money
for harm
plaintiff
never meant
class.29 Here it does not. Six
given
would be
to someone else
to someone
Mexican Workers v. Arizona Citrus Growe
by
plaintiffs
and
preferred
defendant
that a
reject
rs30 holds
district court must
attorney
perhaps
the court. We
provide
awards
“no reasonable cer
cautioned in Nachshin v. AOL that “When tainty
any
member will be benefit-t
cy pres
selection of
beneficiaries is not
require
ed.”31 This one does not. We
an
tethered to the nature of the lawsuit and
performance
established record of
by the
members,
the interests of the silent class
charity
people
of acts beneficial to
in the
process may
the selection
answer to the wronged
cy
class.32
pres
award in
parties,
whims and self interests of the
goes
entity
this case
to a new
with
past
no
counsel, or the court.”27
their
performance at all. For all we
it
know will
fund nothing but an “educational program”
judicial
many
The rules of
ethics have in
amounting to an advertising campaign for
years prohibited
forms for over a hundred
Facebook. That
appear
satisfy
would
charities,
judges
endorsing
from
because
Facebook,
the articles and bylaws, and
lawyers
litigants
of the risk that
will
all, together
after
with class counsel and
feel compelled to contribute to them.28
nominees,
their
will run it.
approach
cy pres
Too liberal an
means
order,
may simply
that a court
and not
3. Notice.
merely encourage,
subject
someone
to its
jurisdiction
give
preferred
to a
charity.
novo,
adequacy
We review
of notice de
may
A
prefer
cy pres
defendant
deferentially.33
award to
This is because notice
award,
damages
public
process
relations
is a matter of due
of law.34 If a
larger
cy
award,
benefit. And the
pres
person
claim,
owns a
property,
is
justify
the easier it is to
a larger attorneys’
the owner of the claim constitutionally
fees award. The incentive for collusion entitled not to have it taken from him
may
where,
here,
greater
be even
except
there
with reasonable notice
op-
and an
is nothing
stop
portunity
Facebook and class
to be heard.
Notice
this case
managing
charity
counsel from
inadequate,
to was
obviously
most
because
serve their interests
pay
salaries and
sufficiently
the class was not
informed that
consulting
persons
fees to
they choose.
might
Facebook itself
be in control of the
AOL, LLC,
1034,
27.
v.
Nachshin
663 F.3d
part
receive
donation as
of the settlement.
(9th Cir.2011).
Nachshin,
1039
bylaws purportedly charitable foun- of the online for the class to posted
dation were opt the deadline to
see a week before Those documents
out of the settlement. would on the Sparapani”
said that “Tim be board, failed to mention
three-person was, own
who Faсebook’s Director of he say Nor did the notice Policy. Public KELLER FOUNDATION/CASE counsel, Rhodes, Michael Facebook’s FOUNDATION; ACE USA/ advisory legal would on the foundation’s sit ESIS, Petitioners, would had to board. members have Class v. carefully look at the settlement Rhodes, that Mr. the man figure out Joseph TRACY; Global International designated legal page advisor on Ltd.; Liberty Mutual Offshore Insur agreement, the settlement was twelve of Director, Company; ance Office of man listed as Facebook’s attor- same Compensation Programs; Workers’ ney depen- on five. Class page members Labor, Department Respon U.S. dant would have no idea that on the notice dents. paid wrongs money supposedly Joseph Tracy, Jr., Petitioner, by spent agents
them to be purported wrongdoer. v. Director, Compensa Office of Workers’
Conclusion Programs; Department tion U.S. Labor; International Global Offshore majority approves ratification of a The Ltd.; Liberty Co.; Mutual Insurance class action settlement which class Foundation, Keller Founda Inc./Case get compensation no at all. members USA/ESIS, Co.; Respon tion ACE They They get get one cent. do not do dents. against doing injunction even an Facebook exactly thing again. the same them 11-71703, 11-71800. Nos. lawyers get Their millions of purported Appeals, United States Court gets against any Facebook bar dollars. Ninth Circuit. might claims of them make for breach privacy rights. most we could their Argued May Submitted say cy pres award is in ex- for the 20, 2012. Sept. Filed giving up any they may change for have, exposed get users contributing charity
satisfaction of Facebook, by partially
be con- funded Facebook, by and advised
trolled consisting of coun-
legal team Facebook’s purported
sel their own counsel whom have met. not hire and never did