WILMINGTON, Del. (Legal Newsline) - A public-interest law firm that represents class members against unfair class action procedures and settlements has filed an objection to a $5.5 million settlement with Google Inc. over allegations that the search engine giant circumvented web browser privacy settings.
The Competitive Enterprise Institute’s Center for Class Action Fairness filed its objection in the U.S. District Court for the District of Delaware late last month.
The center argues in its filing that class members “will see not one penny.”
“This settlement exemplifies the problem of class action attorneys behaving as if they have no clients other than the general public,” CEI Attorney Adam Schulman said in a statement. “It is unacceptable to propose a settlement that waives class members’ rights yet provides them absolutely nothing in return.”
Plaintiffs in the class action sued Google for alleged federal privacy violations over the company’s circumvention of Apple’s Safari browser users’ privacy settings -- in particular, that Google circumvented the web browser’s default privacy settings without consumers’ knowledge and consent to allow advertisers to set third-party cookies on their browsers.
According to the center’s filing, class counsel negotiated a settlement that provided zero dollars to class members and $5.5 million to be divided between class counsel and third-party charities.
One of those charities, the center argues, is a nonprofit with direct ties to class counsel. Several others are charities to which Google routinely donates, the center points out.
“The entire net settlement fund will go third-party ‘cy pres’ recipients, even though it would be possible to allow class members to recover through a claims-made process and/or a sampling lottery method,” attorneys for the center wrote in the motion, filed Dec. 20. “Under Third Circuit law, this arrangement is unacceptable.”
Under terms of the proposed settlement, Google will make cy pres payments to the Berkeley Center for Law and Technology, the Berkman Center for Internet and Society at Harvard University, the Center for Democracy and Technology, Public Counsel, Privacy Rights Clearinghouse and the Stanford Center for Internet and Society.
According to a motion filed by class counsel Dec. 7, counsel is seeking $2,497,000 in fees and expenses, paid from the settlement fund. It also asked the court to award $1,000 per class representative as an incentive award for their efforts on behalf of the class.
The plaintiffs are represented by Stephen G. Grygiel of Silverman Thompson Slutkin White, Brian R. Strange of Strange & Butler and James P. Frickleton, Mary D. Winter and Edward D. Robertson Jr. of Bartimus Frickleton & Robertson PC, among others.
“Preexisting relationships with the defendant undermine the value of the settlement to the class, because the cy pres then is merely a change in accounting entries rather than a change in conduct,” the center argues in its objection.
“Preexisting relationships with class counsel qualify as improper conflicts of interest. These defects render the settlement substantively unfair.”
But class counsel, in a memorandum filed Dec. 7 along with the plaintiffs’ motion for final approval of the settlement, argue the proposed deal is the result of “extensive, arm’s-length negotiations between experienced counsel.”
“The Settlement confers substantial benefits upon Class Members, particularly in light of the potential recovery provable at trial and given the costs, uncertainties, delays, and other risks associated with continued litigation, trial, and/or appeal,” class counsel wrote.
According to its memorandum, class counsel will respond to any objections by Wednesday. A fairness hearing is set for Jan. 11.
Numerous lawsuits were filed in various federal courts against Google in early 2012, after the company’s alleged actions were made public.
The lawsuits were centralized and transferred to the District of Delaware in June 2012.
In January 2013, Google filed a motion to dismiss all claims against it. In October 2013, the Delaware federal court granted the motion in its entirety.
Plaintiffs appealed the order and in November 2015, the U.S. Court of Appeals for the Third Circuit vacated the dismissal of two of the plaintiffs’ state law claims, affirmed the dismissal of the plaintiffs’ other claims, and remanded the case to District of Delaware for further consideration.
Plaintiffs also filed a petition for a writ of certiorari with the U.S. Supreme Court in March 2016, seeking review of the Third Circuit’s affirmed dismissal of some of the plaintiffs’ claims. Google and the other defendants waived their right to respond to the petition.
In May, the Supreme Court requested that Google and the other defendants respond to the petition -- a rare order from the nation’s highest court.
Google notified the Supreme Court of its settlement with the plaintiffs and of its intent not to respond to the petition unless specifically requested to do so despite its settlement. The other defendants responded to the petition in August.
Ultimately, in October, the Supreme Court denied the plaintiffs’ petition.
Meanwhile, class counsel and counsel for Google participated in mediation before retired Judge Layn R. Phillips.
The plaintiffs and Google agreed to the basic terms of the settlement agreement in June. Judge Sue L. Robinson preliminarily approved the deal in August.
Google, which continues to deny all allegations of wrongdoing, reached a $17 million multi-state settlement over similar allegations in November 2013.
From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.