Google’s $5.5M Settlement Fails to Benefit Class Members, Objector Says

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An objector to a Google class action settlement says the funds should go to Class Members, not third-party organizations.

Class Member Theodore Frank filed his objection to the Google class action settlement on Dec. 20, with help from the Competitive Enterprise Institute’s Center for Class Action Fairness.

Frank is challenging the distribution of millions in settlement funds among several public interest organizations that focus on privacy rights and technology issues, instead of among Class Members who may have actually been affected by Google’s actions.

The Google class action settlement arose out of litigation that began in 2012. In what ended up as a consolidation of two dozen separate Google lawsuits, plaintiffs accused Google and other companies of circumventing the privacy features built into Apple’s Safari and Microsoft’s Internet Explorer web browsers.

The alleged software workaround supposedly allowed Google to use cookies to track users’ browsing habits without their knowledge or consent, the plaintiffs claimed.

Under terms of the Google class action settlement, Class Members would receive none of the $5.5 million settlement fund. The money is instead destined for a list of third-party public interest organizations, known in class action legal terminology as “cy pres” recipients.

Organizations that would receive payments under the Google class action settlement would include the Berkeley Center for Law & Technology, the Berkman Center for Internet and Society at Harvard University, the Privacy Rights Clearinghouse, public interest law firm Public Counsel, and the Stanford Center for Internet and Society.

Frank argues that distribution of all, or even just most, of the settlement funds to cy pres recipients violates Third Circuit case law.

He cites prior court decisions that say settlements must provide “sufficient direct benefit” to Class Members. Cy pres shares should generally comprise no more than a small fraction of settlement awards, he argues.

Frank also points out that Google has a history of making corporate contributions to many of the organizations that would receive cy pres shares under this Google class action settlement.

Therefore, in directing Google to donate to these organizations, the settlement is not compelling the company to do anything significantly different from what it already planned to do, Frank argues. These cy pres payments would not drive a change in corporate behavior but merely a change in accounting entries, he says.

Frank also alleges several of the proposed cy pres recipients have prior relationships with the plaintiffs’ attorneys, creating what he says is an improper conflict of interest.

Parties submitted the proposed settlement for court approval in August 2016, then moved for final approval earlier this month.

The plaintiffs justified the cy pres distribution of funds as an appropriate resolution, given that Class Members would number in the millions and that Class membership would be extremely difficult to determine. The costs of settlement administration alone could exceed any recovery Class Members could expect to receive, the parties said.

The plaintiffs are represented by Brian R. Strange of Strange & Butler LLP; James P. Frickleton, Mary D. Winter and Edward D. Robertson Jr. of Bartimus Frickleton & Robertson PC; Joseph Malley of the Law Office of Joseph H. Malley; and Stephen G. Grygiel of Silverman Thompson Slutkin White.

The Google Web User Tracking Class Action Lawsuit is In re: Google Inc. Cookie Placement Consumer Privacy Litigation, Case No. 1:12-md-02358, in the U.S. District Court for the District of Delaware.

UPDATE: On Aug. 6, 2019, a $5.5 million settlement resolving allegations that Google circumvented users’ privacy to secretly track their online activity was rejected the Third Circuit Court of Appeals.

UPDATE 2: On Jan. 3, 2020, Google users argued that a revised $5.5 million Google privacy class action settlement should be approved after the original settlement was dismissed by an appeals court.