Campbell v. Facebook, Inc., No. 17-16873 (9th Cir. 2020)
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An objecting class member appealed from the district court's approval of a settlement between Facebook and a nationwide class of its users who alleged that Facebook routinely captured, read, and used website links included in users' private messages without their consent, and that these practices violated federal and California privacy laws. The district court found that the settlement was fair and approved it, granting in full class counsel's request for fees and costs.
The Ninth Circuit held that the district court had Article III jurisdiction to approve the settlement and that this panel had jurisdiction to evaluate the fairness of the settlement. In this case, plaintiffs identified a concrete injury that the Electronic Communications Privacy Act and the California Invasion of Privacy Act protect; plaintiffs established standing to seek injunctive relief; and post-filing developments did not moot this case.
The panel rejected the merits of objector's contentions that the district court abused its discretion by approving the settlement. The panel rejected the argument that the settlement was invalid under Koby v. ARS National Services, Inc., 846 F.3d 1071, 1081 (9th Cir. 2017). Rather, the panel held that, given how little the class could have expected to obtain if it had pursued claims further based on the facts alleged here (and, correspondingly, how little it gave up in the release), it was not unreasonable that the settlement gave the class something of modest value. The panel rejected objector's argument that the settlement was invalid under In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935 (9th Cir. 2010), and held that the district court did not abuse its discretion in concluding that none of the warning signs weighed against approval of the settlement.
Court Description: Objector / Class Action Settlement. In an appeal brought by an objecting class member, the panel affirmed the district court’s approval of a settlement between Facebook and a nationwide class of its users who alleged that Facebook routinely used website links in users’ private messages without their consent in violation of federal and California privacy laws. Facebook acknowledged in the settlement agreement that it had already made several changes to the practices challenged in this action, and it agreed to add a disclosure to a Help Center page on its website for a year. The district court, over the objector’s challenge, found the settlement to be fair and approved it; and granted in full class counsel’s request for $3.89 million in fees and costs. As a threshold matter, the panel held that the plaintiff class had Article III standing to bring the case. First, the panel held that the plaintiffs identified a concrete injury. Specifically, the panel concluded that the plaintiffs identified a concrete injury by claiming that Facebook violated the federal Electronic Communications Privacy Act and the California Invasion of Privacy Act when it intercepted, catalogued, and used without consent URLs that users had shared in private messages. Second, the panel held that the CAMPBELL V. ST. JOHN 3 plaintiffs established standing to seek injunctive relief, and post-filing developments did not moot this case. The panel concluded that the district court had jurisdiction to approve the settlement, and the panel therefore had jurisdiction to review the merits of that decision. The panel rejected the objector’s challenges to the substantive fairness of the settlement. First, the panel rejected the argument that the settlement was invalid because the class received only “worthless injunctive relief.” Koby v. ARS National Services, Inc., 846 F.3d 1071, 1081 (9th Cir. 2017). The panel held that the district court did not clearly err in finding that the settlement’s injunctive relief had value to absent class members. Moreover, the class did not need to receive much for the settlement to be fair because the class gave up very little. Second, the panel rejected the objector’s argument that the settlement was invalid under In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935 (9th Cir. 2010), because it prioritized class counsel’s interests over those of their clients. The panel held that the district court looked at the Bluetooth warning signs of possible collusion between class counsel and Facebook, and the district court did not abuse its discretion in concluding that none of the warning signs weighed against approval of the settlement. The panel concluded that applying the Bluetooth framework did not demonstrate that the settlement in this case was unfair. 4 CAMPBELL V. ST. JOHN
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