Objectors to the settlement of class claims charging that Facebook violated members’ privacy rights by gathering and publicly disseminating information about their online activities without permission have sought U.S. Supreme Court review of a Ninth Circuit Court of Appeals ruling upholding the settlement; a response is due August 30, 2013. Marek v. Lane, No. 13-136 (U.S., cert. petition filed July 26, 2013).
The issue on appeal, whether the cy pres remedy is fair, generated strong dissenting opinions and has drawn significant online commentary. Under the settlement, class members take nothing, the plaintiffs’ lawyers will be paid some $2.3 million and Facebook will provide approximately $6.5 million to fund a new foundation that it would, in part, control. Apparently, Facebook’s director of public policy would have a seat on the foundation’s board of directors. Finding this structure “an unremarkable result of the parties’ give-and-take negotiations,” the Ninth Circuit also observed that cy pres funds need not be distributed to an already-existing organization to survive a fairness review.
Quoting the foundation’s mission statement, the Ninth Circuit jurist who dissented from the decision not to rehear the matter en banc, opined, “That the DTF [Digital Trust Foundation] is committed to funding ‘programs’ regarding ‘critical issues’ says absolutely nothing about whether class members will truly benefit from this settlement; it simply promises that DTF will do some ‘stuff’ regarding some more ‘critical stuff.’ If fashioning an open-ended, one-sentence mission statement is all it takes to earn cy pres settlement approval in our court, we have completely eviscerated the meaning of our previously controlling case law.”
He further stated, in relation to claims brought under laws “preventing the unauthorized access or disclosure of private information, … [that] the DTF’s sole stated purpose is to ‘educate users, regulators[,] and enterprises’ on how to protect Internet privacy ‘through user control.’ Plaintiffs’ claims, however, have nothing to with users’ lack of ‘education’ or ‘control.’ Instead, they relate to misconduct by Internet companies that wrongfully expose private information in ways that even educated users cannot anticipate, prevent, or direct.”