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Earlier this year, Google debuted the ill-fated Google Buzz feature.In case you missed it, Buzz was Google’s attempt to get into the social networking game by integrating a Facebook-like status posting mechanism (amongst other things) with Gmail inboxes. One of the problems was that the moment Google introduced Buzz, a flurry of information that users thought would be kept private was now on the Internet for all to see.
So what happens when millions of users suddenly “may” have had private information cast up on the web without consent? Well, class action lawsuits, that’s what. Indeed, a class action has been granted preliminary approval by the Northern District of California, notice has been sent out to the putative class, and a settlement appears to be on the table.
Now, before getting to the particulars of the horribly inadequate settlement (hint: the class gets nothing), we should probably run through a quick primer on class action settlements. The Buzz suit is what we call an “opt-out” class action that was brought under FRCP 23(b)(3). Hence, everyone in the nation who may have been harmed by Buzz’s disclosure of private information is in the class unless they elect to get out: if they don’t opt-out, they’re precluded from filing suit in the future on res judicata grounds. Basically, Google gets global peace in return for a settlement, and only the people who “opt-out” live to fight another day.
The settlement process in a (b)(3) class action is a little different than your average settlement. Since the settlement will have preclusive effects, courts have to offer people the chance to object to the settlement as being unfair, or to object to final certification if the requirements of FRCP 23 are not met.
The Buzz settlement is such a bad deal that someone needs to object. In return for getting all class claims settled, Google is putting $8.5 million into a fund. The plaintiffs’ lawyers will get about $2.5 million of that, and the rest will be disbursed as cy pres distributions to groups dedicated to educating people on Internet privacy issues. Take home for the class members: zero dollars and zero cents. Let’s repeat that: Lawyers get millions, Google gets peace, Non-Profits get millions, Class Members get zero.
In addition to the really horrible settlement terms, there are also some lingering questions about whether the class should even be certified. For you aggregate litigation types out there, it looks like there may be a Shutts-style choice of law problem, as well as some related commonality and predominance concerns that would be troubling if this thing wasn’t being certified for settlement purposes only.
In other words, the Google Buzz Settlement appears to be vulnerable to objections as the deal struck is completely unfair to the class members. Hence, someone out there should get to writing up an objection: they’re due on January tenth.
– Sean Wlodarczyk
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