Google headquarters
SAN FRANCISCO — Google can pay $42 million to mostly left-wing political organizations to settle a class action lawsuit supposedly brought on behalf of hundreds of millions of Americans whose privacy rights Google allegedly violated by surreptitiously tracking their locations, while paying nothing to the people allegedly harmed by the company, a federal appeals panel ruled.
On Aug. 26, a split three-judge panel of the U.S. Ninth Circuit Court of Appeals upheld the settlement that would power down a class action lawsuit launched in 2018 against tech giant Google.
In the new 2-1 decision, the panel majority said the payment to organizations including the American Civil Liberties Union; online civil liberties and "justice" organization, the Electronic Frontier Foundation; and environmental justice organization, the Rose Foundation, was merited because such groups advocate for consumer privacy rights and the settlement.
And the judges said that would essentially be good enough in a settlement that would otherwise pay hundreds of millions of Americans only about 25 cents each.
The lawsuit accused Google of misleading users into believing they had the ability to use the settings on their devices to turn off the ability of Google to track them geographically. However, the lawsuit, which was based on journalistic investigations, asserted Google continued to track their devices without their knowledge.
The lawsuit was lodged on behalf of named plaintiffs Napoleon Patacsil, Michael Childs and Noe Gamboa by attorneys from the firms of Ahdoot & Wolfson PC, of Burbank; and Lieff Cabraser Heimann & Bernstein, of San Francisco and New York.
After years of proceedings in San Francisco federal court, U.S. District Judge Edward J. Davila granted approval of a deal to end the lawsuit in 2024.
Under the deal, Google agreed to make changes to its location history and user tracking practices and policies, allegedly to satisfy the concerns spelled out in the lawsuit. The company further agreed to pay $62 million into a so-called non-reversionary fund, meaning none of the money could revert back to Google.
However, unlike other privacy class action settlements, none of the money would be paid to Google users who allegedly were harmed by the practices. Rather, all of the money would go to either pay lawyers, cover the costs of the settlement or to help a series of about two dozen non-profit entities allegedly help consumers enforce the portions of the settlement addressing privacy rights.
Such an arrangement, known legally as "cy pres" - Latin for, "as near as possible" - typically steers money to charities or non-profit organizations, in the name of those harmed.
Such arrangements, however, have also come under increased scrutiny in recent years, and have become the target of objectors, challenging such settlements as little more than backscratching deals designed to give trial lawyers a result to present to judges to justify multi-million dollar fee requests, when they supposedly can't secure significant money to be paid to class members directly.
Under the deal, attorneys are slated to receive $18.6 million in attorney fees, or one-third of the settlement.
The cy pres portion of the settlement, however, drew objections, including from attorney Ted Frank, of the Hamilton Lincoln Law Institute Center for Class Action Fairness, of Washington, D.C.
Frank has built a reputation for decades, objecting to class action settlements, most of which greatly benefit trial lawyers, while providing little relative relief for class members. According to his bio, his work has generated "tens of millions of dollars for consumers and other plaintiffs." The American Lawyer Litigation Daily has called Frank “the indefatigable scourge of underwhelming class action settlements.”
In this instance, Frank filed objections on behalf of named objectors John Andren, Matthew Lilley and Joseph S. St. John.
The objections asserted the $42 million cy pres payments couldn't be justified and would go to organizations that are little more than left-win political policy organizations whose primary objectives are to push for left-wing political causes, such as "racial justice" or to promote abortion.
The objectors assert millions of likely class members whose locations were allegedly tracked by Google would be "shocked" to learn that money supposedly obtained in their name would now be turned over to political activist organizations advocating on behalf of causes with which they may strongly disagree, with the blessing of the court.
Frank and the objectors instead urged the court to scrap the cy pres arrangement and divide the money among Google users through a class action claims process.
Since the settlement does not provide any direct relief for class members, Frank and the objectors asserted the lawyers who secured the deal also should receive nothing from it, either.
Judge Davila, however, approved the settlement.
Attorney Ted Frank
Frank and the objectors appealed.
However, at the Ninth Circuit, the majority said the cy pres arrangement marked the best possible outcome for such a relatively small settlement when weighed against the massive size of the group that could be owed payment.
The judges said they believed the payment to the advocacy groups sufficiently addressed the privacy concerns raised in the lawsuit.
The decision was authored by Judge Richard Clifton, with concurrence from Judge Jay Bybee. Both judges were appointed by former President George W. Bush.
"Because the pro rata distribution here would be ... miniscule, the district court (Davila) did not abuse its discretion in approving the parties’ proposed settlement," Clifton wrote.
Judge Danielle J. Forrest dissented.
She said the majority decision allowed the parties to scoot past the requirement to first determine if the money can't be feasibly distributed to the people actually allegedly harmed by the company's misconduct.
"What is at stake is more than the distribution of what, I readily admit, is often a very small sum per individual class member," Forrest wrote. "Relaxing the requirements for cy pres distribution threatens to sideline focus on the property rights of those for whose benefit the litigation was brought in the first place, which runs headlong into due-process problems.
"Cy pres is an extraordinary tool for extraordinary cases. The record does not establish that this is such a case where there has been no attempt at distribution and there is no obvious reason to think that distribution would be ineffectual."
In response to those concerns, however, the majority said the courts must examine settlements to determine if they benefit the most possible class members, "not just the tiny number who filed objections and not just the tiny fraction of the class that might be expected to file financial claims."
Forrest's reasoning, they said, "would elevate the noisy few over the interests of all class members."
Following the decision, Frank said he intended to appeal the matter to the U.S. Supreme Court.
In an email responding to questions from The Record, Frank said:
"In 2018, the Supreme Court granted review of an all-cy pres Google settlement approved by this judge and vacated the Ninth Circuit’s affirmance for other reasons. As a result, the class got $17 million instead of zero.
"This settlement is worse, and we look forward to seeking Supreme Court review."
