Ninth Circuit Puts Brakes on $30B Facebook Privacy Suit

SAN FRANCISCO (CN) – The Ninth Circuit on Tuesday granted Facebook’s emergency petition to stay a $30 billion privacy suit pending appeal just hours after a lower court refused to delay an upcoming trial.

Two Ninth Circuit judges issued their ruling just after 3 p.m. on Tuesday, mere hours after U.S. District Judge James Donato denied Facebook’s motion to stay the case.

In an emergency petition filed Friday, Facebook argued it was being forced to spend money and risk reputational harm notifying users about an upcoming trial, which could become moot if the Ninth Circuit overturns a prior ruling in the case.

“The reputational and economic costs to Facebook will be irreparable, particularly because the court has ordered Facebook to use its own service to notify people about a lawsuit against it,” Facebook wrote in its emergency petition.

Last week, Donato ordered Facebook to use emails, newsfeed posts and jewel notices, or Facebook alerts, to notify millions of Illinois Facebook users about the lawsuit by May 31. Facebook is accused of harvesting users’ facial data for its “Photo Tag Suggest” function without consent and in violation of a 2008 Illinois privacy law. A jury trial was set for July 9.

The social network claims Donato erroneously interpreted Illinois law when he granted class certification in April and denied Faceook’s motion for summary judgment in May.

Facebook also argued that Donato was “prioritizing the July 9 trial date above the due process rights of Facebook and millions of absent class members.”

In his Monday ruling, Donato said Facebook “goes too far” in claiming that alerting users about the suit through its own network would cause “untoward embarrassment.”

“Many cases have held that a defendant’s online channels constitute the best practicable notice to individual class members,” Donato wrote.

Donato also disagreed with Facebook’s argument that the case should be postponed pending the outcome of its appeal challenging his decision to certify the class.

“Facebook has not proffered any evidence indicating that class members would be left in a state of disarray and befuddlement, as it suggests, if developments during trial or post-trial appellate review resulted in a change to or decertification of the class,” Donato wrote.

Donato noted in his conclusion that this case, which started in 2015, has already been heavily litigated with major pre-trial disputes resolved and discovery closed.

“The case is ripe for trial, and Facebook’s last-minute request to derail that is denied,” Donato wrote.

But the Ninth Circuit later granted Facebook’s petition to stay the case. That means the company no longer has to use its own network to alert millions of users about the lawsuit by May 31, and the trial is delayed indefinitely.

Ninth Circuit Judges William Fletcher and Consuelo Callahan issued the one-page ruling granting Facebook’s emergency petition to stay the case.

The two judges also granted an unopposed motion by the U.S. Chamber of Commerce to file an amicus brief in the case.

Earlier on Tuesday, class attorney Paul Geller, of Robbins Geller Rudman & Down in Boca Raton, Florida criticized Facebook for its “wasteful, repetitive efforts to stay the case or delay the trial.”

After the Ninth Circuit handed down its order, Geller said in an email: “We remain confident that our clients will get their day in court. This is just one more hurdle we have to clear.”

Facebook did not immediately return follow-up emails seeking comment on the Ninth Circuit’s decision Tuesday afternoon.

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