U.S. Supreme Court

Facebook settlement that awarded zilch to class members is challenged in cert petition


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A cert petition before the U.S. Supreme Court seeks to overturn a settlement agreement in which Facebook agreed to pay about $6.5 million to establish a new foundation to protect privacy rights.

The cy pres settlement is being challenged by objectors who include Ted Frank of the Center for Class Action Fairness, the New York Times reports. The deal resolved a challenge to Facebook’s former Beacon program, which displayed information about users’ activity on participating websites, including their video rentals and purchases.

Facebook agreed to pay $6.5 million to the new foundation, which it would partly control, and to pay plaintiffs’ lawyers about $2.3 million.

The cert petition says the settlement does not satisfy the requirements of the Federal Rules of Civil Procedure. “A $9.5 million class action settlement that awards absentee class members no relief at all—no money, no guarantee that defendants will not injure them in the exact same manner, not even coupons—is not ‘fair, reasonable, and adequate’ by any measure,” the cert petition says.

The case is Marek v. Lane. According to the Times, the court has restricted class actions in recent decisions and the justices “may decide it is time to consider settlements that critics say leave plaintiffs worse off than when they started.”

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