Facebook Seeks $700K From Users Who Lost Lawsuit

A court in Berlin ruled this week that Facebook violated users' rights with its Friend Finder feature, which drew on members' email contacts to suggest friends. But in the U.S., Facebook not only won a potential class-action lawsuit related to Friend Finder but is now seeking to recover more than $700,000 in attorneys' fees from the five users who brought the lawsuit, court papers reveal.

The U.S. lawsuit -- brought by Robyn Cohen, Shannon Stoller, Christopher Marshall, Bryan Siglock and Debra Lewin -- alleged that Facebook's Friend Finder tool violated a California law that bans companies from using names or photos in ads without people's consent. 

Friend Finder searches people's email contacts to determine which ones are on Facebook and then suggests them as friends. The users alleged that Facebook wrongly promoted Friend Finder by displaying members' names and photos in ads to their friends. Facebook's ads for the feature said that the members found other friends by using the tool, and suggested that people "give it a try." 

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U.S. District Court Judge Richard Seeborg dismissed the case last October on the theory that Cohen and the other users had not shown they were injured by Friend Finder. Absent some tangible harm, the users did not have "standing" to proceed in federal court, the judge ruled. Seeborg never reached the substantive question of whether the tool violates California's misappropriation law.

Shortly after Seeborg threw out the lawsuit, Facebook quietly filed a motion seeking reimbursement of $706,950 for its attorneys' work on the case. Facebook says the amount is "reasonable" given that users sought more than $100 million in damages. (California's misappropriation law provides for damages of $750 per incident.)

Facebook says that attorneys from its outside law firm Cooley, as well as contract attorneys, worked for almost 1,500 hours on the case. One of the Cooley partners working on the case, Michael Rhodes, bills at $930 an hour, while some of the associates bill at more than $500 an hour, Facebook says in its court papers.

In most situations, winners in litigation are not entitled to reimbursement for their legal bills. But the California misappropriation statute at the center of the U.S. lawsuit specifically says that the prevailing party is entitled to recover attorneys' fees.

The users who brought suit are now challenging Facebook's claim that it "prevailed" on the misappropriation claim. They say that Facebook did not win on that issue because the judge dismissed the case before deciding whether the feature violated California's law.

Seeborg last month asked both sides to file additional papers just addressing that argument. Facebook did so late last month and the consumers did so last week.

Facebook declined to comment on its efforts to obtain attorneys' fees.

In the German matter, a Berlin court reportedly said in a preliminary ruling issued on Tuesday that Facebook did not adequately inform users that it would draw on their email contacts to suggest friends. A Facebook spokesperson said the company will "take a close look into the details" of the court decision once it is available. "Facebook Ireland Ltd, which provides our service to people in Germany, is committed to adhering to European data protection principles," the company added.

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