Supreme Court To Hear Challenge To Google Privacy Settlement

The Supreme Court agreed Monday to decide whether Google should have been allowed to settle a class-action privacy lawsuit by agreeing to pay more than $5 million to nonprofits.

The settlement, cleared last year by the 9th Circuit Court of Appeals, resolved a 2010 lawsuit alleging that Google violated users' privacy by including their search queries in "referer headers" -- the information that's automatically transmitted to sites that users click on when they leave Google. Some queries, like people's searches for their own names, can offer clues to users' identities. (Google no longer transmits search queries when people click on links in the results.)

The deal requires Google to donate $5.3 million to six nonprofits -- Carnegie Mellon University, World Privacy Forum, Chicago-Kent College of Law, Stanford Law, Harvard's Berkman Center and the AARP Foundation. The settlement also requires Google to pay more than $2.1 million to the attorneys who brought the lawsuit, with the remainder of the $8 million-plus settlement fund going to court costs.



Theodore Frank, an activist who founded the Center for Class Action Fairness, previously urged the 9th Circuit Court of Appeals to scrap the deal on the grounds that it doesn't compensate Google users. Frank argued that some of the nonprofits had prior relationships with Google as well as the lawyers representing the consumers. Two of the plaintiffs' lawyers were alumni of three schools slated to receive funds (Stanford, Harvard and Chicago-Kent College of Law), and Google already donates money to Harvard, Stanford, AARP and Chicago-Kent, Frank contended.

That court rejected Frank's arguments, ruling that any prior relationships between the nonprofits and Google, or between the nonprofits and class counsel, don't bar the settlement from proceeding. "Given the burgeoning importance of Internet privacy, it is no surprise that Google has chosen to support the programs and research of recognized academic institutes and nonprofit organizations," Circuit Judge Margaret McKeown said in a written ruling.

In January, Frank asked the Supreme Court to hear his challenge. A "class action settlement that awards absent class members no relief at all in exchange for their claims -- no money, no alteration of the defendant’s allegedly injurious conduct, not even coupons -- is not 'fair, reasonable, and adequate' by any measure," Frank's lawyers at the firm BakerHostetler wrote in a petition seeking review.

Sixteen state attorneys general supported Frank, arguing against settlements that call for donations to nonprofits.

The Center for Class Action Fairness has challenged other class-action settlements involving tech companies, including Facebook. The organization recently asked the 9th Circuit to vacate a deal that requires Facebook to pay almost $4 million to class-action attorneys, but nothing to users (other than $5,000 each to the two people who served as plaintiffs in the case). That matter stemmed from allegations that Facebook violated the federal wiretap law by by intercepting users' messages to each other and scanning them in order to determine whether users sent their friends links to outside sites.

Five years ago, the Supreme Court declined to review a separate privacy settlement stemming from Facebook's rollout of the Beacon ad program, which told users about their friends' ecommerce activity. That settlement, approved in 2010, required Facebook to pay around $6.5 million to create a new privacy organization.

One Facebook user who objected to that deal, Megan Marek -- represented by the Center for Class Action Fairness (and BakerHostetler) -- asked the Supreme Court to hear a challenge to the deal. Even though that request was rejected, Chief Justice John Roberts indicated that the court might agree to take up a future settlement that required payments to nonprofits, not class members. “In a suitable case, this Court may need to clarify the limits on the use of such remedies,” Roberts wrote in 2013,

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