Settlements that provide monetary relief only in the form of cy pres payments to third parties may be appropriate where there is a “direct and substantial nexus” to class members’ interests, Judge Bridget S. Bade said.
Bade signed off on the distributions to a number of internet privacy-protection organizations on behalf of the U.S. Court of Appeals for the Ninth Circuit, but she also wrote separately about her concerns over the court’s precedent on charitable awards.
It wasn’t feasible to distribute the money directly to the estimated 60 million people whose personal data was collected, given the difficulty of verifying their claims, Bade said.
Bade also noted that, despite objector David Lowery’s characterization of the settlement, it wasn’t really a “cy pres-only” deal in light of additional injunctive relief. The district court said the court-ordered relief went beyond measures Google was already required to implement pursuant to an earlier agreement to resolve related state-government investigations.
Lowery argued that the impracticality of distributing class funds should have precluded certification. But judicial oversight over the cy pres settlement provisions ensures that the settlement prioritizes class members’ interests, Bade said.
The court also rejected Lowery’s argument that the settlement amounted to compelled speech in violation of the First Amendment.
Without deciding whether a court’s approval of a settlement amounts to “state action” to trigger the constitutional argument, the court said the agreement doesn’t compel speech because class members can opt out.
The court also rejected Lowery’s arguments over counsel’s alleged conflicts of interests, and his challenge to the fee award. There’s no rule that courts have to discount the value of cy pres relief, Bade said.
Despite authoring the court’s opinion upholding the settlement, Bade wrote a separate concurrence expressing reservations about—and urging the court to reconsider—its prior precedent on cy pres settlements.
There is, in Bade’s view, “a compelling argument that class members receive no benefit at all from a settlement that extinguishes their claims without awarding them any damages.”
That’s true as here when the deal directs the money “to groups whose interests are purportedly aligned with class members, but whom they have likely never heard of or may even oppose.”
“Indeed, cy pres settlements arguably benefit opt-outs more than class members because opt-outs reap any positive externalities of the settlement provisions” without releasing their claims, Bade said.
Judges Marsha S. Berzon and Morgan Christen joined the decision.
Lowery is represented by the Hamilton Lincoln Law Center, Center for Class Action Fairness.
The class is represented by Cohen Milstein Sellers & Toll PLLC, Lieff Cabraser Heimann & Bernstein LLP, and Spector Roseman & Kodroff PC.
Google is represented by Wilson Sonsini Goodrich & Rosati PC.
The case is In re Google Inc. Street View Elec. Commc’ns Litig., 9th Cir., No. 20-15616, 12/27/21.