Online Privacy Organizations Get “Buzzed” on Millions from Google Lawsuit Settlement

Cross-posted by Forbes.com at On the Docket

In a Legal Pulse post last November, What’s that Buzz? It’s the Sound of Class Action Lawyers Celebrating their Impending Fees, we discussed the settlement of a lawyer-driven lawsuit alleging Google violated various federal and state laws by not sufficiently protecting customers’ privacy in its “Buzz” networking service.  Judge James Ware of the Northern District of California has since been weighing objections to the settlement; what amount of attorneys’ fee he should reward; and which “organizations focused on Internet privacy policy or privacy education” would receive a portion of the settlement funds through the cy pres process. Judge Ware issued his final order yesterday, one which makes the plaintiffs’ lawyers and a number of well-funded activist groups richer, but provides no monetary benefit to any class members (other than the “class representatives,” who each got a whopping $2,500).

It’s no surprise, of course, that no damages were awarded since, as the class counsel pointed out in arguing for the cy pres distribution in the settlement, 

[N]one of the objectors identifies a single class member who suffered out-of-pocket damages from the release of Buzz. Indeed, not one of the objectors had shown any specific individual harm due to the operation of Buzz. 

Quite a racket, these class actions: Uninjured plaintiffs + a defendant anxious to settle = millions in attorneys’ fees and donations to activist groups (which in turn = more litigation).

The attorneys had asked for $2.55 million in fees; the judge awarded them $2.13 million. No surprise there. There were some surprises, however, among the cy pres award recipients. A total of 77 organizations applied for the available $6.1 million, which were whittled down to 12 groups by the counsels for both sides. One advocacy group that applied but didn’t make the cut, the Electronic Privacy Information Center (EPIC), complained loudly to the court, lodging accusations that the selection process was biased in favor of groups “that are currently paid by [Google] to lobby for or consult for the company.” Judge Ware didn’t comment on the validity of that claim, but he nonetheless decided that there was “no good cause to exclude EPIC” from the list, and awarded them $500,000.

Other recipients range from advocacy and educational powerhouses like the ACLU ($1 million); Brookings Institution ($165,000); Electronic Frontier Foundation ($1 million); and Berkeley Law School (combined $700,000); to smaller groups such as “Youth Radio” ($50,000) and YMCA of Greater Long Beach ($300,000).

The most interesting recipient, however, was an organization nominated directly and independently (as he can under his inherent judicial authority) by Judge Ware: the Markkula Center for Applied Ethics at Santa Clara University. Judge Ware is listed as a Lecturer at Santa Clara law school.  He awarded the Center $500,000.

There are few better cases to illustrate what’s wrong with the cy pres process and the easy abuse of the class action device than the Google Buzz settlement. Why were these lucky 14 settlement fund recipients chosen and not others? What criteria were used to choose them? How will the $6.1 million provide an “indirect benefit” (as the judge put it) to the faceless, nameless plaintiffs in the suit? What amount of scarce federal budgetary dollars were spent adjudicating this shakedown? Questions, we think, which are worthy of further inquiry but ones we know won’t be answered any time soon.

7 thoughts on “Online Privacy Organizations Get “Buzzed” on Millions from Google Lawsuit Settlement

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