Docket numbers: No. 15-15858 (9th Cir.), appeal from No. 10-cv-04809-EJD (N.D. Cal.)
In the underlying case, Gaos v. Google, plaintiffs sued Google seeking trillions of dollars in statutory damages for alleged federal privacy violations over their search engine. The Center for Class Action Fairness objected to the class action settlement negotiated by the plaintiffs’ lawyers in Gaos v. Google because it provided $0 to class members and $8.5 million to be divided between the plaintiffs’ lawyers – who received $1000/hour on this case – and cy pres recipients. Cy pres recipients included organizations that were not parties in the litigation, including class counsel’s alma maters, and several organizations that Google already supports through donations.
The U.S. District Court for the Northern District of California approved the settlement in Gaos v. Google over CCAF’s objection. CCAF appealed the settlement approval to the Ninth Circuit, and oral argument was heard on March 13, 2017. On August 22, 2017, the Ninth Circuit affirmed the district court’s order approving a cy pres only settlement. On September 5, 2017, CCAF requested a rehearing.
CCAF has been a pioneer of protecting consumers and shareholders from the abusive practice of cy pres, winning landmark appellate decisions on the question in 2011, 2013, 2014, and 2015. The Ninth Circuit court’s decision on this case could affect future class-action settlements, especially the use of cy pres awards.
On September 5, 2017, CCAF requested a rehearing, but the Ninth Circuit denied motions for rehearing and rehearing en banc October 5, 2017. CCAF petitioned the U.S. Supreme Court to review the case on January 3, 2018. The Court has previously expressed interest in addressing cy pres issues.
Watch the March 13 oral argument below or on YouTube.
On April 30, 2018, the U.S. Supreme Court agreed to review CCAF case in Frank v. Gaos. For the filings and more information related to the Supreme Court case click here.
Oral argument occurred on October 31, 2018, and Ted Frank joined the very small group of litigators to have argued his own case before the Supreme Court.
On March 20, 2019, the Supreme Court issued a per curiam opinion vacating and remanding the case to lower courts to decide the issue of whether plaintiffs even had standing to sue in the first place.
Justice Thomas dissented from the remand, opining that standing for the underlying complaint exists. Justice Thomas would have reversed approval of the settlement, finding that the “cy pres-only arrangement failed several requirements of Rule 23” suggesting that counsel did not adequately represent the class and that such settlement was not “‘superior to other available methods for fairly and efficiently adjudicating the controversy’ when it serves only as a vehicle through which to extinguish the absent class members’ claims without providing them any relief.”
The Ninth Circuit remanded the case to the district court for further proceedings, and the Ninth Circuit in turn remanded to the district court.
With the settlement vacated, the parties resumed litigation and the district court denied Google’s motion to dismiss in part on June 5, 2020. On October 6, 2021, the parties advised that an agreement in principle had been reached and requested to stay the litigation pending execution of the settlement, which occurred in 2022. The district court granted preliminary approval of the new settlement in May 2023, and scheduled October 12, 2023 for the final fairness hearing.
On October 16, 2023, the district court granted final approval to the improved settlement. The court found that the CCAF objectors’ “litigation ultimately led to a substantial increased benefit for the Settlement Class as a whole.” The new settlement provided an increased common fund of $23 million, with over $16 million directly distributed to the class – compared to the $0 they would have received under the original $8.5 million all-cy pres settlement.
This case was originally brought by the Center for Class Action Fairness. From October 2015 to January 2019, it was a project of the Competitive Enterprise Institute. The case is being actively litigated by the Hamilton Lincoln Law Center.
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