Supreme Court Hears Google Class Action Appeal
The US Supreme Court recently considered whether, in a class-action lawsuit, lawyers for the plaintiffs should be able to reap millions in fees while their clients get nothing.
As the New York Times reported,
The case arose from an $8.5 million settlement between Google and class-action lawyers who said the company had violated its users’ privacy rights. Under the settlement, the lawyers were paid more than $2 million, but members of the class received no money.
That settlement was the result of a case over Google’s disclosure of search terms to websites. The Supreme Court Justices were divided over whether those disclosures actually harmed any of the plaintiffs.
The Ninth Circuit earlier upheld the settlement, which involved a class comprised of about 129 million people who used Google search in the US between October of 2006 and April of 2014.
As the court noted, Google processes more than one billion search requests every day, and
When a user visits a website via Google Search, that website is allegedly privy to the search terms the user originally submitted to Google Search. This occurs because, for each search results page, Google Search generates a unique “Uniform Resource Locator” (“URL”) that includes the user’s search terms. In turn, every major desktop and mobile web browser (including Internet Explorer, Firefox, Chrome, and Safari) by default reports the URL of the last webpage that the user viewed before clicking on the link to the current page as part of “referrer header” information.
The plaintiffs complained that their search terms were being shared with the websites without their knowledge.
As part of the settlement, Google agreed to update its website terms to explain how users’ search terms are shared with third parties.
Instead of making payouts to affected Google users, the company agreed to make donations of $5.3 million to organizations dealing with privacy on the Internet, including AARP (formerly known as the American Association of Retired Persons) and centers at Chicago-Kent School of Law, Harvard, and Stanford.
As the 9th Circuit noted, this is what’s called a “cy pres” distribution:
Cy pres, which takes its name from the Norman French expression cy pres comme possible (or “as near as possible”), is an equitable doctrine that originated in trusts and estates law as a way to effectuate the testator’s intent in making charitable gifts. … In the class action settlement context, the cy pres doctrine permits a court to distribute unclaimed or non-distributable portions of a class action settlement fund to the “next best” class of beneficiaries for the indirect benefit of the class.
During oral arguments, Justice Alito commented that these might not be organizations the plaintiffs liked, and that might not ever benefit them.
A “Little Bit Fishy”
Chief Justice John Roberts suggested that it was a “little bit fishy” that one of the organizations selected for a contribution was one that Google had contributed to in the past.
The newest Justice, Brett M. Kavanaugh, expressed his concern about “the appearance of favoritism,” given that some of the donations went to law schools the lawyers for the plaintiffs had attended.
However, Justice Ruth Bader Ginsburg countered that paying money to class members wasn’t always practical, as the cost of distributing small amounts might not justify it.
In this case, the individual payments would have been about four cents.
Justice Ginsburg suggested that the plaintiffs could at least get an indirect benefit from the donations.