SAN FRANCISCO (CN) — The Ninth Circuit agreed Tuesday that Google can settle privacy claims by giving $8.5 million to six nonprofit privacy organizations instead of class members, despite ties between the organizations, Google and class counsel.
The three-judge appeals panel found that U.S. District Judge Edward Davila did not abuse his discretion by approving the cy pres settlement, almost half of which went to the alma maters of class counsel, and another chunk to organizations to which Google regularly donates or which received Google settlement funds in the past.
“A prior relationship or connection between the two, without more, is not an absolute disqualifier,” U.S. Circuit Judge M. Margaret McKeown wrote for the panel.
Cy pres, legal French for “as near as,” is an equitable doctrine by which a court reforms a contribution as closely as possible to the donor’s intention.
McKeown said multiple factors, including the nature of the relationship and the circumstances of the selection process also “play into the analysis.” She called the two objectors’ allegation by two objectors that Davila abused his discretion “unfair and untrue.”
But Senior U.S. Circuit Judge J. Clifford Wallace dissented in part, suggesting in a scathing 5-page opinion that the circumstances surrounding the choice of recipients was “unseemly.”
Lead plaintiff Paloma Gaos accused Google in 2010 of violating its own privacy policy by sharing users’ search terms with third-party websites without telling users or asking their permission, in violation of the Stored Communications Act and California law.
The search terms were included in referrer headers, which identify the page containing the link that the user clicked on to request the webpage. Some of the information can identify users, the plaintiffs said.
Under a 2015 settlement, Google agreed to establish an $8.5 million settlement fund, but none of the money went to class members. Instead, $5.3 million went to six cy pres recipients proposed by the settling parties to fund internet privacy initiatives. The remaining $3.2 million went to covering attorneys’ fees, costs, and $15,000 in incentive awards for three named plaintiffs.
The recipients are Carnegie-Mellon University; the World Privacy Forum; Chicago-Kent College of Law Center for Information, Society, and Policy; the Stanford Law School Center for Internet and Society; the Berkman Center for Internet & Society at Harvard and the AARP Foundation.
The Center for Class Action Fairness at the Competitive Enterprise Institute objected to the settlement on behalf of two class members, arguing that “the class members will not see one penny.”
On appeal, the objectors argued that a cy pres settlement was inappropriate and that the $8.5 million should have been used to fund a claims process or lottery distribution to class members.
They took particular issue with the relationships some of the recipients have with class counsel and Google: Class attorney Michael Aschenbrener attended Chicago-Kent, and class attorney Kassra Nassiri attended Stanford and Harvard. Google donates to the Berkman Center, the Stanford Center, AARP, and Chicago-Kent.
Though Davila expressed discomfort with the proposed settlement, he approved it. The judge reasoned that the recipients had a substantial connection to the interests of the class members, and that there was no evidence that the parties’ preexisting relationships factored into the selection.
The Ninth Circuit agreed Tuesday, calling the objectors’ argument “a barebones allegation that class counsel graduated from schools that house the internet research centers that will receive funds.”