Can A Court Resolve a Dispute By Providing No Relief Whatsoever?

In this privacy lawsuit, three plaintiffs sued Google on behalf of 129 million people for alleged privacy violations.  The Plaintiffs’ lawyers negotiated an $8.5 million settlement which was distributed as follows:  (1) $3.2 million for attorney’s fees, incentive payments for the three named plaintiffs, and other costs; and (2) $5.3 million to six  third-party organizations (the cy pres recipients).   The cy pres recipients included all three Plaintiffs’ lawyers’ alma maters and organizations that Google already supported.  Google was thus able to get rid of a lawsuit brought by 129 million class members by paying each of them $0.00 and making no material changes to its practices.  Google could continue causing the harm alleged by the class action Plaintiffs by simply paying the Plaintiffs’ lawyers and making an additional contribution to groups it supported anyway.`

Issue Areas:

Individual Liberty, Limited Government

Case:

Theodore H. Frank v. Paloma Gaos, No. 17-961 (Supreme Court) (petition stage)

Read the Amicus Brief:
Question(s) Presented:

Is it fair for a class action settlement to provide no relief whatsoever to class members?


Additional Background:

Article III “confines the federal courts to adjudicating actual ‘cases’ and ‘controversies’”.  Allen v. Wright (1984) (citing Valley Forge Christian College v. Americans United for Separation of Church and State, Inc. (1982)).  To determine whether there is an actual case or controversy, courts look to the standing doctrine to see “whether the plaintiff has ‘alleged such a personal stake in the outcome of the controversy’ as to warrant his invocation of federal-court jurisdiction to justify exercise of the court’s remedial power on his behalf.”  Warth v. Seldin (1975)Baker v. Carr (1962).  Standing will only be found if “[plaintiff] can show that he himself has suffered or will suffer injury whether economic or otherwise.”  Sierra Club v. Morton (1972).  Injury alone, however, is not sufficient.  The plaintiff must also show that a favorable ruling by the court will actually redress the injury.  Sprint Communications Co., L.P. v. APCC Servs., Inc. (2008).  Relief that does not remedy the injury suffered cannot bootstrap a plaintiff into federal court; that is the very essence of the redressability requirement.  Steel Co. v. Citizens for a Better Env’t (1998).  The Court has recognized standing in some instances where the plaintiffs themselves will not receive any financial relief.  In Friends of the Earth, Inc. v. Laidlaw Environmental Services (2000), the Court ruled that a plaintiff had standing to sue for civil penalties that would be paid to the federal government if such a sanction “effectively abates … [the] conduct and prevents its recurrence.”

ALF’s Amicus Brief:

In an amicus brief the ALF argues that the class action settlement approved by the Ninth Circuit did not involve the exercise of the court’s remedial power on “behalf” of unnamed class members, because it provided no relief to them.  Indeed, the settlement in this case permitted defendants to continue to engage in the conduct complained of in the complaint and precluded the plaintiff class from bringing a complaint against the defendant under federal law in the future.  Private parties were using the federal courts to preclude those injured from taking advantage of the remedy Congress provided and immunized conduct Congress sought to prohibit. As Northwestern University Law Professor Martin Redish had observed, the distribution of the cy pres awards to nonparties transforms the “judicial process from a bilateral private rights adjudicatory model to a trilateral model”.  Martin H. Redish, et. al. Cy Pres & the Pathologies of the Modern Class Action: A Normative and Empirical Analysis, Florida Law Review (2010).  We also argued that the redirection of settlement funds from the class members to third parties violated the first amendment rights of the class members who might disagree with viewpoints advocated by those third parties.

Status:

Vacated and remanded in a per curiam opinion on March 20, 2019 to address the Plaintiff’s standing in light of Spokeo, Inc. v. Robins

Date Originally Posted: July 13, 2018

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