(CN) — Meta Platforms inched closer to preliminary approval of its record $725 million settlement of a class action over allowing political consulting firm Cambridge Analytica to mine Facebook users' private information.
U.S. District Judge Vince Chhabria said at a hearing Thursday that the proposed settlement was reasonable and that he had no significant concerns about the agreement. The judge didn't give preliminary approval yet because, he said, he wanted to give a little more thought to whether the notice to class members should spell out that participating in the settlement may impact their ability to recover in similar lawsuits brought against Facebook by state attorneys general.
The issue came up after a last ditch bid to intervene in the litigation by New Mexico, which has its own case against Facebook over the Cambridge Analytica scandal. According to Corban Rhodes, a lawyer for the state, Facebook hasn't been forthcoming about whether and how the proposed settlement with consumers will undermine New Mexico's claims against the social-media behemoth.
New Mexico filed a motion to intervene just two days ago, prompting Chhabria to ask Rhodes why it took so long to raise this issue if it was such a big concern, given that the consumer class action had been pending for years and the proposed settlement was announced months ago.
"You have an action that seeks to recover money for Facebook users," Chhabria told Rhodes. "This is an action that seeks to recover money for Facebook users. That's all you need to know to understand that this action might effect your action, but where have you been? Where have you been all those years?"
Rhodes said New Mexico was prompted to intervene because while the language of the proposed settlement says it wouldn't extinguish claims outside the class action, Facebook told New Mexico the settlement would affect the state's claims for restitution and that Facebook would reserve its rights as to how the settlement may also affect the state's other claims.
According to the judge, nothing in the class action settlement would preclude New Mexico from seeking fines and an injunction against Facebook, but it could preclude the state from recovering restitution for Facebook users who participate in the settlement.
Lawyers for both Meta and the consumers objected to the idea that the notice class members will receive to invite them to participate in the settlement should include additional language that spells out that, if they share in the class action settlement, it may affect their right to participate in a future settlement between Facebook and a state over the same privacy violations.
Derek Loeser, co-lead counsel for the Facebook users, told the judge that such additional language may just end up confusing class members and could even jeopardize the settlement if many of them opt out in the speculative hope of getting more money from their attorney general's settlement.
"I worry about confusing class members with this because it's not like there is an attorney-general action that has obtained some relief and you're being asked to choose between two buckets of relief," Loeser told the judge. "You're giving up a bird in the hand, and a really outstanding result, for something that might happen."
Meta's lawyer Rosemarie Ring said she had never seen this issue come up and that it would apply in every case involving tech companies because more often than not there are government investigations beyond class actions by users.
The judge said he understood their concern about including language about parallel government investigations and lawsuits in settlement notices, but added he wanted to think it through more carefully.
"The idea that an attorney-general action could recover more money for a Facebook user than what the Facebook user could get through this settlement seems pretty fanciful," Chhabria said.
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