Judge Considers Final Approval of Facebook Sponsored Stories Class Action Settlement

By Anne Bucher  |  July 8, 2013

Category: Legal News

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UPDATE: A federal judge granted final approval to the Facebook Sponsored Stories class action settlement on August 26, 2013.

UPDATE 2: On Jan. 6, 2016, the 9th U.S. Circuit Court of Appeals upheld the lower court’s approval of the Facebook Sponsored Stories class action settlement.

UPDATE 3: 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!

A federal judge from the U.S. District Court of the Northern District of California will make a final decision about whether to approve the terms of a class action settlement involving Facebook’s Sponsored Stories.

The Sponsored Stories class action lawsuit was initially filed in 2011 after Facebook placed users’ names and profile pictures in “Sponsored Story” advertisements without permission. In one instance, Tennessee resident Kim Parsons realized that something was wrong after neighbors informed her that her teenage daughter’s image had been posted next to an advertisement for an ice cream store. Her daughter had never visited that store or given permission for Facebook to use her image. She had simply clicked a “like” button.

Because Parson’s daughter had clicked the “like” button on Facebook more than 200 times, her image was frequently used in advertisements. Parsons felt powerless to stop her child’s image from being used for commercial purposes.

On June 28, 2013, U.S. District Judge Richard Seeborg heard arguments that minors should not have their Facebook content shared with advertisers. While these issues are important in the realm of social media, Judge Seeborg reiterated that his role at this time is to determine whether the terms of the Facebook class action settlement are fair.

In January, Facebook sent a legal notice to around 125 million people to let them know about how to file a claim for the Sponsored Stories class action settlement. Less than 615,000 of these Facebook users completed the form to be eligible for a piece of the settlement.

The plaintiffs listed in the class action lawsuit will split $37,500 from the settlement, while the 615,000 other eligible class members will receive $15.

Last month, Facebook announced that it will no longer utilize the Sponsored Stories feature on the social networking site. Instead, the company will make it easier for advertisers to purchase ad space that meets their objectives, whether it is simply to get users to “like” their company or to convince users to install a mobile app.

In December 2011, a federal judge rejected Facebook’s motion to dismiss the class action lawsuit, finding that the Sponsored Stories feature may violate California law. In June 2012, Facebook settled the class action lawsuit, agreeing to pay $10 million to charities and to give its users more control over how their personal information.

Later that summer, Judge Seeborg expressed concerns that the members of the class action lawsuit would not receive any money from the settlement. After rejecting the settlement, Judge Seeborg granted preliminary approval to an amended settlement agreement that would pay class members a total of $20 million.

The plaintiffs in the class action lawsuit are represented by Robert Arns and Jonathan Davis.

The Facebook Sponsored Stories Class Action Lawsuit case is Fraley et al v. Facebook, Case No. 11-CV-01726-LHK in the U.S. District Court for the Northern District of California.