Google Inc. has agreed to a $5.5 million class-action settlement in the United States District Court for the District of Delaware over allegations that the company violated federal privacy laws by circumventing privacy settings of Apple’s Safari browser, allowing advertisers to set up third-party cookies on the browsers of unknowing users.
While the Court preliminarily approved the settlement in August, the Competitive Enterprise Institute’s Center for Class Action Fairness (“CEI”) is arguing against final approval of the settlement on behalf of objector and class member, Theodore H. Frank.
In their objection, CEI points out that the allegations against Google amounted to billions of dollars in statutory damages; the $5.5 million settlement would constitute only a fraction of the alleged damages, about $2.5 million of which is being sought by class counsel for fees and expenses. CEI believes that class counsel’s fee request is excessive and unjustifiable. CEI further argues that the settlement is fundamentally unfair, because “class members will see not one penny.” Instead, the entire net settlement fund is to be paid to third party cy pres recipients, several of which allegedly have preexisting relationships with class counsel or Google. CEI claims this is an improper conflict of interest and undermines the value of the settlement. CEI cites to previous Third Circuit law, arguing that settlements must provide “sufficient direct benefit” to class members and that “cy pres awards should generally represent a small percentage of the total settlement funds.
CEI suggests that a settlement could be paid to class members directly or through a claims-made process or a sampling lottery. However, CEI further argues that if such a distribution is impossible, class certification should not be maintained as class members could not be adequately represented through the class action.
Class counsel responded on Wednesday, arguing that the settlement should be presumed fair and reasonable. They point to the fact that only one out of millions of potential class members objected, claiming CEI and Frank are serial objectors. They contend that the settlement was hard fought, negotiated at arms length and resulted in assurances that the complained of conduct has been terminated. Google has also suffered substantial governmental fines for their conduct. Class counsel argues the cy pres distributions are proper and the organizations’ missions are in line with the nature of the settlement. They emphasize that many courts have ruled that cy pres distributions effectively and indirectly compensate class members, especially where direct distributions are economically infeasible, impractical or burdensome, as they would be here. Class counsel further claims that their request for attorney’s fees is reasonable, as it provides for a negative lodestar multiple.
The final fairness hearing is scheduled for January 11, 2017.
The case is: In re: Google Inc. Cookie Placement Consumer Privacy Litigation, Docket No. 1:12-md-02358-SLR
Counsel Financial provides working capital credit lines up to $5 million exclusively for the plaintiffs' bar in all states except California, where credit lines are issued by California Attorney Lending.
