Fraley v. Facebook
- Supreme Court To Review Fairness of Cy Pres Awards In Class Action Settlements: The Supreme Court today granted certiorari to address for the first time whether a class action settlement that awards cy pres but provides no direct relief to class members is "fair, reasonable, and adequate." The case, Frank v. Gaos, involves a settlement arising from Google's tracking of Internet users by circumventing their browsers' privacy settings. The settlement awarded cy pres funds to several organizations but resulted in no change in Google's business practices nor payments to class members. EPIC objected to the proposed settlement on three separate occasions, arguing that, "The proposed settlement is bad for consumers and does nothing to change Google's business practices. The company will simply revise its notice so that it may continue to engage in the privacy-invading practice that class counsel claimed at one time provided the basis for class action certification and monetary relief." EPIC has routinely opposed class action settlements that fail to compensate class members or change business practices. In 2013, Chief Justice John Roberts wrote that the Court would soon need to address "fundamental concerns" surrounding the use of cy pres in class action settlements. EPIC has proposed an objective basis to evaluate cy pres awards. (Apr. 30, 2018)
- EPIC Challenges Facebook Privacy Settlement: EPIC has filed an amicus brief with a federal appeals court urging the court to reject a proposed class action settlement over Facebook's practice of scanning private messages. EPIC challenged the settlement because it did not require Facebook to stop scanning private messages. In fact, the company can continue scanning messages by simply burying a notice on its website. Also, there was no compensation to Internet users for the prior violation of federal and state laws. EPIC is dedicated to class action fairness in privacy cases and has objected to many similar settlements that failed to provide actual benefits to Internet users. EPIC recently opposed a settlement with Google that allows the company to continue tracking web users. EPIC also opposed a settlement with Facebook in 2014 that allowed the company to continue an unlawful practice. (Feb. 2, 2018) More top news »
This case addresses the question of whether Facebook violated the rights of its users by incorporating their names and likenesses in advertisements called “Sponsored Stories.” Sponsored Stories showed a user's name and profile picture to their friends when they liked pages belonging to commercial companies, brands, products, organizations, and other similar pages. The implication was that the user had endorsed the page in question and would recommend it to their friends.
This case was filed as a class action in California superior court and was removed to the United States District Court for the Northern District of California on March 11, 2011. After its motion to dismiss the case was affirmed in part and denied in part, Facebook reached an initial settlement with the proposed class. The settlement allocated $10 million to various non-profit groups, though did not provide any relief to actual class members. EPIC opposed this proposed settlement on the grounds that it did not follow the doctrine of cy press, a doctrine which allows a court to distribute non-distributable portions of a class action settlement fund to the “next best” class of beneficiaries. The proposed settlement did not follow this doctrine because it excluded organizations that represented the silent class members who have sought stronger privacy protections for Facebook users and routinely represented class members before federal and state agencies.
The case was reassigned after the presiding judge recused herself and the initial settlement was rejected in August of 2012. A revised settlement was proposed in which users were given some control over their appearance in sponsored stories by individual advertisers and allows parents of minors to opt their children out of all advertising. Additionally, users were able to file a claim for up to $10 from a settlement fund of $20 million. The proposed settlement was preliminarily approved on December 3, 2012. On January 2, 2013, notices of the proposed settlement were sent out to the 125,000,000 potential class members.
EPIC continues to oppose the proposed settlement and will be supporting Public Citizen's efforts to appeal the settlement by filing an amicus brief in support of that appeal.
EPIC is interested in this case for three reasons. First, EPIC and a coalition of consumer privacy organizations are responsible for the 2011 consent order between the Federal Trade Commission and defendant Facebook concerning the protection of consumer privacy that is impacted by this settlement. Second, EPIC has routinely advised courts in consumer privacy class actions to ensure that the settlement is aligned with the purpose of the litigation and that the cy pres allocations advance the interests of class members. Third, in Marek v. Lane, a case that bears a striking similarity to the matter currently before this court, Chief Justice John Roberts expressed concerns that reflect views EPIC and others have routinely expressed about class action settlements in consumer privacy cases.
United States Court of Appeals for the Ninth Circuit
- Notice of Appeal of Proposed Settlement, June 28, 2013.
- Opening Brief of Appellants Schacter et al.
- Amicus briefs in support of Appellants
- Brief of Federal Trade Commission
- Brief of EPIC
- Brief of Center for Digital Democracy,
- Campaign for a Commercial-Free Childhood Letter Rejecting Fraley Settlement, February 12, 2014.
- Amicus Briefs in Support of Neither Party
- Answering Brief of Appellees Mainzer et al.
- Answering Brief of Appellees Facebook
- Reply Briefs
United States District Court for the Northern District of California
- Final Judgment
- Preliminary Approval of Class Settlement and Provisional Class Certification Order
- Amended Settlement Agreement and Release
- Joint Motion for Preliminary Approval of Revised Settlement
- Second Amended Class Complaint for Damages
- EPIC, Letter to Judge Seeborg Objecting to finalized Settlement, August 20, 2012.
- EPIC, Letter to Judge Koh Objecting to Settlement Because of Inadequate Relief for Class Members, July 12, 2012.
- EPIC, et al Opposition to Proposed Settlement, July 11, 2012.
- EPIC, Comments to the Federal Trade Commission In re Facebook, Dec. 27, 2011.
- EPIC, Supplemental Complaint, In re Facebook, Inc., Jan. 14, 2010.
- EPIC et al., Complaint, In re Facebook, Inc., Dec. 17, 2009.
- EPIC: In re Facebook
- Court Documents for Fraley v. Facebook, Inc.
- Chief Justice Roberts Statement Regarding Denial of Certiorari in Marek v. Lane, 134 S.Ct. 8 (2013)
- McArthur Foundation Withdraws from Fraley Settlement (September 19, 2013).
- Fed. Trade Commission, Protecting Consumer Privacy in an Era of Rapid Change (2012). This report recognizes that teens are a sensitive group, owed extra privacy protections.
- Letter from Donald S. Clark, Secretary, FTC, to Marc Rotenberg, Director, EPIC (July 27, 2012).
- Federal Trade Commission Press Release, Facebook Settles FTC Charges, November 29, 2011.
- Federal Trade Commission, Proposed Settlement, November 29, 2011.
- Federal Trade Commission, Eight Count Complaint, 2011.
- Letter from David Vladeck, Director, FTC Bureau of Consumer Protection to Marc Rotenberg, Director, EPIC (Jan. 14, 2010).
- Facebook Made My Teen Into an Ad. What Parent Would Ever 'Like' That?, The Guardian (February 15, 2014).
- Facebook Deal on Privacy Is Under Attack, The New York Times (February 13, 2014).
- Parents Resume Privacy Fight vs. Facebook over use of Children's Images in Ads, The Washington Post (February 13, 2014).
- Facebook Social Ads Settlement Under Fire from Children's Advocates, The LA Times (February 13, 2014)
- Facebook Advertising Settlement Challenged by Consumer Group, Businessweek (February 13, 2014)
- Facebook Faces Opposition to Privacy Settlement, Associated Press (February 13, 2014)
- Objections to class-action deal over Facebook “Sponsored Stories” flare, Ars Technica (February 13, 2014)
- Why privacy settlements like Facebook's "Sponsored Stories" lawsuit aren't working Gigaom, (September 19, 2013).
- MacArthur Foundation to Decline Facebook Settlement Funds Bloomberg, BNA (2013).
- Why We Turned Down $290,000, Campaign for a Commercial-Free Childhood (February 13, 2014).