Fraley v. Facebook

Fraley, et al. v. Facebook, Inc., et al. was a class action lawsuit against Facebook in 2011 alleging the company used Facebook users’ names, pictures, and identities without their knowledge or consent to sell products or services via Facebook advertisements called “Sponsored Stories”. Facebook and class members reached a settlement (first settlement) in 2012, which was denied preliminary approval at the district court level in August 2012 by Judge Richard G. Seeborg, who relied relying heavily on CCAF’s Bluetooth victory, singling out the self-dealing “clear sailing” and kicker provisions of the settlement. The parties revised the settlement—removing the “clear sailing provision—and it was approved in December 2012.

The Center for Class Action Fairness objected to this settlement in May 2013, as it would pay attorneys $7.5 million, and give some class members the opportunity to claim up to $10 from a net fund of about $9 -$10 million. However, if the number of claims was too high, the money would go to a selection of nonprofits instead, precluding any class distribution at all. CCAF objected to the excessive attorneys’ fees request, argued that the valuation of injunctive relief based on the cost to the defendant was invalid, and urged the court to increase the disbursements to class members rather than dispersing unclaimed funds to cy pres recipients.In August 2013, the district court approved the final settlement and adopted some of CCAF’s arguments on injunctive relief, attorneys’ fees, and increased the class-member award to $15 from $10, making several million dollars more available for the class by reducing the attorneys’ fees. In September 2013, CCAF moved for an award of attorneys’ fees for the objector, Sam Kazman, and credit for the modifications made to the settlement as a result of his objection. Kazman asked for his award to be deducted from the class counsel’s award, so that the class members were not double-billed. The court denied this request in February 2014, saying the court had either already contemplated the arguments made in Kazman’s objection or they were commonsense.

In March 2014, Kazman appealed the court’s decision arguing his successful objection resulted in a modification in the final settlement that increased the disbursements to class members by more than $3 million and the settlement fund via cy pres for nonprofits by $2.8 million—rather than these dollars going to class counsel. No other objectors claimed responsibility for these results, and for the court to say it would have implemented these changes anyways puts objectors in an impossible position. It means the settlement was either frivolous to begin with or requires objectors to read the minds of judges in order to avoid making superfluous objections.

The court denied Kazman’s request and the arguments made by several others objecting to the settlement in its decision in, Jo Batman v. Facebook, on January 6, 2016.

Case Documents