Facebook Sponsored Stories Class Action Settlement Challenged by Father

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The Facebook class action lawsuit settlement that accused the social media giant of improperly using pictures of children in their ads has been challenged in the Ninth Circuit.

The Ninth Circuit upheld the decision earlier this month, deciding in a 2 to 1 decision that the lower court did not abuse its discretion when it approved the Facebook settlement agreement which authorized distribution of unclaimed funds to charitable organizations.

One Ninth Circuit judge did not agree with the majority opinion, stating that the payment made to the 600,000 Class Members should be increased “to avoid giving a huge windfall to the charities identified as cy pres recipients.”

In his petition for a full court hearing, Michael Depot, father of one of the unnamed class action plaintiffs, asked the Ninth Circuit to revisit their decision. The petitioner argued that the Facebook class action settlement amounts to a waiver for Facebook to use millions of minors’ posts and pictures to the social media site without authorization and in violation of California state constitutional law.

According to the petition with the Ninth Circuit, “[The settlement] allows capture of their postings (including photos) by Facebook, editing and republication to potentially large numbers of friends and strangers — without prior consent or even notice to the child or parent.”

“That blank-check expropriation occurs notwithstanding technology for electronic notice and consent instantly, and at virtually no cost to Facebook,” the petition further stated.

Depot argues further that this “categorical consent” violates an explicit privacy provision guaranteed by California’s state constitution as well as a provision that does not allow children to assign property or delegate their rights to a third party. The petitioner argues that the Ninth Circuit ignored these issues in its first order upholding the Facebook class action settlement.

“The settlement agreement purports to delegate to Facebook unfettered power to take information posted by a child, package it, and transmit it in any form and to potentially millions of recipients and for any commercial purpose, as Facebook determines,” states the petition that challenges the settlement agreement that would end litigation in the Facebook sponsored stories class action lawsuit.

The petition also argues that Facebook strong armed class action plaintiffs into the settlement agreement by threatening them with $10 million in defense fees. Under California law, defense fees can be shifted to plaintiffs who lose their cases. According to the petition, “[t]he threatened risk of financial obligation weighed heavy on the mind of class (and also subclass) counsel.”

The lower court approved the settlement agreement in 2013. Under the terms of the settlement, class members who file a claim will get $15. Additionally, Facebook will be required to inform users about how it uses their names and pictures in their ads, also called “Sponsored Stories.”

Class Members are represented by Jonathan Davis, Robert Arns and Steven Weinmann of the Arns Law Firm and Jonathan Jaffe of Jonathan Jaffe Law.

The Facebook Sponsored Stories Class Action Lawsuit is Fraley, et al. v. Facebook Inc., Case No. 13-16918, in the U.S. Court of Appeals for the Ninth Circuit.

UPDATE: On Nov. 17, 2016, Top Class Actions readers who submitted timely and valid claims for the Facebook settlement started receiving checks worth as much as $15. Congratulations to everyone who got PAID!