When class members are owed a few pennies from a settlement, how hard must you try to make sure they get paid?
That's the question before the U.S. Court of Appeals for the Third Circuit in a petition to reverse a $5.5 million settlement with Google Inc. over privacy claims that gives money to the plaintiffs' attorneys and six nonprofit organizations but nothing to the class. On Wednesday, attorneys general from 11 states filed an amicus brief insisting that the Delaware judge who approved the settlement didn't go far enough in attempting to put class members above the use of cy pres, a controversial practice used to distributed unclaimed funds in a settlement to third parties.
The same issue has come up in other cases, particularly those involving millions of internet users whose payouts are considered too small to be worth distributing.
"The proposed settlement releases millions of consumer claims related to Google's electronic 'cookie' placement practices in exchange for $5.5 million from Google, and yet it diverts the class members' $3.5 million portion of the settlement to cy pres charities when that money could be feasibly distributed to class members," wrote Oramel Skinner, an attorney at the Arizona attorney general's office.
The case involves multidistrict litigation challenging Google's practice of overriding cookie blockers on Apple's Safari and Microsoft's Internet Explorer to gain access to user information. In 2012, Google paid $22.5 million to the Federal Trade Commission to resolve similar claims; a year later, it settled complaints by 28 state attorneys general for $17 million.
In 2015, the Third Circuit partially reversed dismissal of the multidistrict litigation.
In her Feb. 2 approval of the settlement, U.S. District Judge Sue Robinson found that delivering money to the class would have been "logistically burdensome, impractical, and economically infeasible, resulting (at best) with direct compensation of a de minimus amount." She also reduced a $2.4 million request for attorney fees to about $1.9 million.
In its June 28 opening brief, objector Ted Frank, founder of the Washington, D.C.-based Competitive Enterprise Institute's Center for Class Action Fairness, alleged that four of the cy pres recipients in the case, including Harvard University's Berkman Klein Center for Internet & Society and Stanford University's Center for Internet and Society, have conflicts of interest because they have accepted donations and other benefits from Google. In addition, the chairman of another recipient, Public Counsel, the nation's largest pro bono organization, is Brian Strange, one of the plaintiffs' attorneys in the case.