California Federal Judge Preliminarily Approves Facebook Settlement

by Tara Arick on December 11, 2012 · 0 comments

in social media for lawyers

- From LexisNexis® Mealey’s™ Daily Legal News.

A California federal judge on Dec. 3 granted preliminary approval of a class settlement and issued a provisional class certification order in a suit over a social networking website’s use of users’ personal information in paid advertising (Angel Fraley, et al. v. Facebook, Inc., No. 11-1726, N.D. Calif.).

The amended settlement, reached after the initial settlement was denied in August, adds a $ 10 cash payment in relief to each class member in a suit accusing Facebook Inc. of using the names and photos of users in advertising on the social network without the users’ express permission.

Granting the preliminary approval, U.S. Judge Richard Seeborg of the Northern District of California opined that “[t]he Settlement Agreement appears to be the product of serious, informed, non-collusive negotiations and falls within the range of possible approval as fair, reasonable and adequate.”

Likenesses Used

Lead named plaintiff Angel Fraley of Seattle and several California residents filed a class complaint against Facebook and 100 unnamed Does in the Santa Clara County Superior Court on March 18, 2011. They said Facebook’s alleged unauthorized use of users’ likenesses and personal information in paid advertising on its site violated California’s right of publicity statute and California Business and Professions Code Section 17200 and constituted unjust enrichment.

On April 8, 2011, Facebook removed the lawsuit to the District Court under the Class Action Fairness Act. On May 21, 2012, the parties represented to the court that they had reached a settlement agreement in principle but that it was conditioned on settlement with the plaintiffs in a related case, C.M.D. v. Facebook, Inc. (No. 12-1216, N.D. Calif.). But on May 27, the parties filed a joint status report indicating that a settlement had been reached and that they were moving forward without involving the C.M.D. plaintiffs. According to the June 20 motion for preliminary approval of class action settlement, the parties proposed $ 10 million in cy pres, $ 10 million in attorney fees and a release of all claims, known or unknown, that could have been brought.

The C.M.D. plaintiffs in a June 22 motion sought to intervene.

Oppositions Filed

On July 6, Facebook and the Fraley plaintiffs filed separate oppositions to the motion to intervene. Facebook argued that the proposed intervenors were not truthful about their intent in their motion.

The Fraley plaintiffs argued that the settlement is much more valuable than the $ 20 million the C.M.D. plaintiffs discussed.

On Aug. 17, Judge Richard Seeborg denied the motion for preliminary approval of the settlement. The amended settlement was filed Oct. 5. The amended agreement requires the revision of Facebook’s terms of use, user visibility and control over sponsored stories, a $ 10 cash payment in relief to each class member and cy pres distribution of any remaining funds.

A fairness hearing to determine whether final approval should be granted is scheduled for June 28.

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