Yesterday, the U.S. Court of Appeals for the Third Circuit voided Google’s $5.5m ‘cookie’ privacy settlement that paid nothing to consumers. The settlement was meant to resolve the case against Google for violating user privacy by installing cookies in their browsers. This comes after the decision was challenged by the Center for Class Action Fairness (CCAF), an institution representing class members against unfair class action procedures and settlements.
What this Google ‘cookie’ case was about
The class-action case accuses Google of creating a web browser cookie that tracks a user’s data. It mentions that the cookie also tracked data of Safari or Internet Explorer users even if they properly configured their privacy settings. The plaintiffs claim that Google invaded their privacy under the California constitution and the state tort of intrusion upon seclusion.
In February 2017, U.S. District Judge Sue Robinson in Delaware ruled that Google will stop using cookies for Safari browsers and pay a $5.5 million settlement. This settlement will cover fees and costs of the class counsel, incentive awards for the named class representatives, and cy pres distributions. This did not include any direct compensation to class members. The six cy pres recipients were data privacy organizations who agreed to use the funds for researching and promoting browser privacy.
Cy pres distributions, which means “as near as possible” allows the court to distribute the money from a class action settlement to a charitable organization. This is done when the settlement becomes impossible, impracticable, or illegal to perform.
Some of the cy pres recipients had pre-existing associations with Google and the class counsel, which raised concern. “Through the proposed class-action settlement, the purported wrongdoer promises to pay a couple million dollars to class counsel and make a cy pres contribution to organizations it was already donating to otherwise (at least one of which has an affiliation with class counsel),” the Circuit Judge Thomas Ambro said. He noted that John Roberts, the U.S Chief Justice has previously expressed concerns about cy pres. Many federal courts also are quite skeptical about cy pres awards as they could prompt class counsel to put their own interests ahead of their clients’.
Ambro further mentioned that the District Court’s fact-finding was insufficient. “In this context, we believe the District Court’s fact-finding and legal analysis were insufficient for us to review its order certifying the class and approving the fairness, reasonableness, and adequacy of the settlement. We thus vacate and remand for further proceedings in accord with this opinion.”
CCAF objection to this settlement was overruled by U.S. District Court for the District of Delaware on February 2, 2017. Ted Frank, CCAF’s director, who is also a class member in this case, filed a notice of appeal on March 1, 2017. Ted Frank believes that the money awarded to the privacy groups should have been instead given to class members.
The objection is also being supported by 13 state attorneys. “The state attorneys general agree with CCAF that the feasibility of distributing funds depends on whether it’s impossible to distribute funds to some class members, not whether it’s possible to distribute to all class members,” wrote CCAF. Now, the case is returned to the Delaware court.
You can read more about Google’s Cookie Placement Consumer Privacy Litigation case on Hamilton Lincoln Law Institute.