In Facebook Privacy Case, Lawyers Gain Millions, while Plaintiffs get Nothing

Wednesday, August 14, 2013

A lawsuit settlement between Facebook and users of the social media website resulted in the plaintiffs’ lawyers collecting millions of dollars while their clients got nothing.


The plaintiffs sued Facebook claiming it had violated their privacy rights. The defendant agreed to settle the case for nearly $9 million—with $2.3 million going to the plaintiffs’ legal team and $6.5 million going to establish a new foundation that Facebook would partially control.


The plaintiffs appealed to the Ninth Circuit Court of Appeals, asking a three-judge panel to toss out the settlement. But the justices ruled 2-1 that the agreement was legal, writing that it was “fair, adequate and free from collusion.”


The lone dissenter, Judge Andrew J. Kleinfeld, wrote: “They do not get one cent. They do not even get an injunction against Facebook doing exactly the same thing to them again.”


He added: “This settlement perverts the class action into a device for depriving victims of remedies for wrongs, while enriching both the wrongdoers and the lawyers purporting to represent the class.”


The plaintiffs also wound up relinquishing their right to sue Facebook and its partners in a program called Beacon, “which automatically, and alarmingly, displayed their purchases and video rentals. The program has been shuttered, but its legal legacy lives on,” wrote Adam Liptak of The New York Times.


The judges voting in favor of the settlement were Proctor Hug Jr. and William A. Fletcher. Hug was appointed by President Jimmy Carter and Fletcher by Bill Clinton. Kleinfeld was appointed to the Ninth Circuit by President George H.W. Bush.


The plaintiffs haven’t given up, and have asked the U.S. Supreme Court to review the case. But it is uncertain whether they will find a friendly majority of justices there, either, given the court’s recent history of restricting other aspects of class actions.

-Noel Brinkerhoff


To Learn More:

When Lawyers Cut Their Clients Out of the Deal (by Adam Liptak, New York Times)

Facebook User Pushes High Court To Nix 'Beacon' Pact (by Allison Grande, Law 360)

McCall v. Facebook (Ninth Circuit Court of Appeals) (pdf)


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