Perrin Davis v. Meta Platforms, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: February 21, 2024
• Docket: 22-16903
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS FEB 21 2024 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

In re: FACEBOOK, INC. INTERNET No. 22-16903 TRACKING LITIGATION, D.C. No. 5:12-md-02314-EJD ------------------------------

PERRIN AIKENS DAVIS; BRIAN K. MEMORANDUM* LENTZ; CYNTHIA D. QUINN; MATTHEW J. VICKERY,

Plaintiffs-Appellees,

SARAH FELDMAN; HONDO JAN,

Objectors-Appellants,

v.

META PLATFORMS, INC., FKA Facebook, Inc.,

Defendant-Appellee.

In re: FACEBOOK, INC. INTERNET No. 22-16904 TRACKING LITIGATION, D.C. No. 5:12-md-02314-EJD ------------------------------

PERRIN AIKENS DAVIS; BRIAN K. LENTZ; CYNTHIA D. QUINN;

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.

Panel MATTHEW J. VICKERY,

ERIC ALAN ISAACSON,

Objector-Appellant,

Appeal from the United States District Court for the Northern District of California Edward J. Davila, District Judge, Presiding

Argued and Submitted February 7, 2024 San Francisco, California

Before: R. NELSON, FORREST, and SANCHEZ, Circuit Judges.

Objectors Sarah Feldman, Hondo Jan, and Eric Alan Isaacson (collectively,

the “Objectors”) appeal the district court’s order approving a class-action

settlement between Plaintiffs and Defendant Meta Platforms, Inc., formerly

Facebook, Inc. We have jurisdiction following entry of final judgment under 28

U.S.C. § 1291 to review an objecting class member’s timely appeal from the

district court’s order approving a class-action settlement as to all parties and

2 claims. See Allen v. Bedolla, 787 F.3d 1218, 1220 (9th Cir. 2015). We affirm.

1. In 2011, Facebook users began suing Facebook for tracking their

online activities without their consent, stating common law and statutory causes of

action in contract and tort. These lawsuits against Facebook were consolidated in a

multidistrict litigation proceeding. Ultimately, the parties entered into a settlement

agreement under which Facebook agreed to pay $90 million into a settlement fund,

then the seventh-largest amount in a privacy class-action settlement. Facebook

further agreed to search for, collect, sequester, and delete “all cookie data” it

improperly received or collected between April 22, 2010 and September 26, 2011.

Class counsel sought $26.1 million in attorneys’ fees, as well as service awards of

$3,000 to $5,000 for each of the seven named Plaintiffs. Following a fairness

hearing, the district court overruled the Objectors’ objections and granted final

approval of the class-action settlement along with associated fees and awards.

2. A district court must decide after a hearing whether a class-action

settlement is “fair, reasonable, and adequate,” considering the factors set forth in

Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998). Lane v. Facebook, Inc.,

696 F.3d 811, 818–19 (9th Cir. 2012) (quoting Fed. R. Civ. P. 23(e)(2)). “Parties

seeking to overturn the settlement approval must make a ‘strong showing’ that the

district court clearly abused its discretion.” Campbell v. Facebook, Inc., 951 F.3d

1106, 1121 (9th Cir. 2020) (citation omitted). The Objectors argue that the district

3 court abused its discretion by incorrectly using disgorgement as the measure of

actual damages when the court should have analyzed the settlement by aggregating

statutory damages at $10,000 per violation under the Electronic Communications

Privacy Act (“Wiretap Act”), 18 U.S.C. §§ 2510–2523.

In its final order approving the settlement, the district court applied the

correct legal standard under Federal Rule 23 of Civil Procedure and the Hanlon

factors. With 124 million potentially affected Facebook users in the United States,

the district court properly rejected the $1.24 trillion in statutory damages proposed

by Objectors as an unreasonable baseline that would violate due process. See

Wakefield v. ViSalus, Inc., 51 F.4th 1109, 1121–22 (9th Cir. 2022). The district

court did not clearly abuse its discretion in accepting class counsel’s estimate that

$900 million represented a “best-day-in-court” verdict, and by determining that the

$90-million settlement—in conjunction with injunctive relief benefitting the entire

class—was fair and reasonable. See Rodriguez v. W. Publ’g Corp., 563 F.3d 948,

965 (9th Cir. 2009) (concluding that ten percent of the class’s estimated damages

was a fair and reasonable settlement award). Nor did the district court

impermissibly apply a “presumption of fairness” to the settlement. See Saucillo v.

Peck, 25 F.4th 1118, 1131 (9th Cir. 2022). The district court merely noted that the

“absence of a large number of objections to a proposed class action settlement

raises a strong presumption that the terms . . . are favorable to the class members.”

4 Consideration of the class’s reaction to the proposed settlement is one of the

factors the district court should consider in evaluating a settlement proposal. See

Hanlon, 150 F.3d at 1026.

3. The district court did not abuse its discretion in using the percentage-

of-the-fund method in finding the proposed attorneys’ fees of $26.1 million (29%

of the settlement fund) reasonable. The court cited class counsel’s creation of new

law in the Ninth Circuit and its attainment of substantial monetary and injunctive

relief for the class as grounds for the upward departure of four percentage points

above the 25-percent benchmark. See In re Facebook, Inc. Internet Tracking

Litig., 956 F.3d 589 (9th Cir. 2020). The district court also conducted a “cross-

check of the percentage-of-the-fund [method] using the lodestar method” and

found that the requested attorneys’ fee award represents a multiplier of 3.28 from

the post-multidistrict consolidation lodestar. See In re Bluetooth Headset Prods.

Liab. Litig., 654 F.3d 935, 944 (9th Cir. 2011). That is well within the permissible

bounds of this Circuit’s decisions. See Vizcaino v. Microsoft Corp., 290 F.3d

1043, 1051 n.6 (9th Cir. 2002) (noting the range of multipliers applied in most

common fund cases is 1.0 to 4.0). Awarding modest service awards of $3,000 to

$5,000 each to seven named Plaintiffs was also not an abuse of discretion. See In

re Apple Inc. Device Performance Litig., 50 F.4th 769, 785–87 (9th Cir. 2022).

4. Finally, class notice of settlement comported with Rule 23 and

5 constitutional due process by “describ[ing] the action and the plaintiffs’ rights in

it,” as well as describing how to participate in or object to settlement. Phillips

Petroleum Co. v. Shutts, 472 U.S. 797, 812 (1985). Objector Isaacson contends

that the district court erroneously authorized material redactions of Plaintiffs’

complaints and sealed exhibits, but he never moved to unseal the complaints or

exhibits, and he fails to explain why a class representative or absent class member

would need to know this information to evaluate the settlement or “protect the

interests of the class.” Fed. R. Civ. P. 23(a)(4).

AFFIRMED.