Sponsored stories: where Facebook publishes a user's "like" of an item without their permission to others, without compensation, notification, or an ability to opt-out.
The short story: a lawsuit ensued, a settlement was reached, that settlement was rejected by U.S. District Court Judge Richard Seeborg (who also heard the previous Facebook privacy class action), as the proposed amounts were "plucked out of thin air," and then, once again, a settlement was reached. Now, according to Courthouse New Service, the Ninth Circuit will be asked to take a second look.
'Untested Claims' and Arms-Length Negotiation
The terms of the "Sponsored Stories" settlement are very different from the "Beacon" class action, which provided no relief to the actual Facebook users. Here, 615,000 users have filed claims, and will be awarded $15 each, while millions more will be given to nonprofits and the attorneys, reports CNS.
That settlement was approved by Judge Seeborg, who called the plaintiffs' claims "largely untested," and who emphasized the fact that the new settlement was reached after months of "good faith, arms-length" negotiations in front of a "renowned retired federal magistrate judge."
The Children's Advocacy Center and the Center for Public Interest Law are the parties petitioning the Ninth Circuit for review of the settlement.
Will SCOTUS Review the "Cy Pissed" Beacon Settlement?
Earlier this year, we reported on the Ninth Circuit's denial of en banc rehearing in the other major Facebook privacy class action settlement. Six judges passionately dissented from the denial of rehearing, arguing that not only were the aggrieved users themselves not compensated, but the charity chosen to receive the cy pres settlement funds (the newly-created Digital Trust Foundation) was woefully inadequate:
"The DTF can teach Facebook users how to create strong passwords, tinker with their privacy settings, and generally be more cautious online, but it can't teach users how to protect themselves from Facebook's deliberate misconduct. Unless, of course, the DTF teaches Facebook users not to use Facebook. That seems unlikely."
Cy pres settlements are controversial for obvious reasons. Injured parties aren't compensated, while lawyers who represent them are, as are charities chosen by the lawyers. There is no one watching out for the interests of the injured parties, while the non-injured parties divide the bounty.
The appeal was taken to the Supreme Court, and according to the court's docket, they will consider the petition for certiorari during their October 11 conference.