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Facebook Jurist 'Blown Away' By Record Reply To $725M Deal

Law360 (September 7, 2023, 10:04 PM EDT) By Bonnie Eslinger — A California federal judge considering final approval of Facebook’s $725 million deal to end allegations of data impropriety lauded the high rate of class participation, saying on Thursday he’s “blown away” that over 17.7 million valid claims have been submitted in what may be the largest response to a U.S. class action.

U.S. District Judge Vince Chhabria made the comment after hearing from a lawyer for the plaintiffs that while claims are still being processed, the preliminary number of validated claims to date is more than 17.7 million

“There were many more filed claims than that, but through the fraud review process, a number of claims were rejected, [and] there’s still several million to be processed,” said Derek Loeser of Keller Rohrback LLP.

The number of validated claims to date, Loeser added, “is the most we’ve ever seen, and as far as I’m aware the most that’s ever been submitted in a class action.”

If you divided up the settlement equally, that works out to about $30.18 per class member, the lawyer said.

“Of course, there’s a wide range of what class members will receive because of the way the plan of allocation works, which is based on months on the platform,” Loeser told the court. “Some people will receive multiples of that, some people will receive fractions of that.”

That $30 average seems a little lower that what might have been expected, Judge Chhabria observed.

“It’s because such an incredibly large number of people made claims in this case,” the judge added. “I was kind of blown away by how many people made claims.”

Altogether, there’s been more than 28.6 million claims filed, but about 2 million are duplicates, and about 8 million appear to be fraudulent, Lesley Weaver of Bleichmar Fonti & Auld LLP, another lawyer for the plaintiffs, told the court.

During Thursday’s hearing, Judge Chhabria also asked the lawyers for the class to tell him the dollar amount they are seeking from the settlement for their work on the case, noting that the total had not been stated in their motion for attorney fees.

“Is that an accident that you didn’t say the number out loud on the brief?” the judge asked.

Loeser began with a bit of humor.

“We’re just not good at math” the lawyer told the judge before calling the missing number an “oversight.”

If the 25% cut is awarded, the total amount of the fee award will be nearly $180.5 million, he said.

Then, it was the court’s turn to joke.

“So Nick Bosa money?” Judge Chhabria quipped, referencing a player for the San Francisco 49ers football team who has reportedly agreed to a five-year, $170 million contract extension.

Class counsel announced the $725 million settlement last December, following years of litigation in which Facebook parent company Meta Platforms Inc. was accused of failing to prevent third-party entities — like the political consultant Cambridge Analytica — from obtaining user data without consent.

While the claims rate has been strong, a number of objectors have come forward in recent months to argue that the plaintiffs should have pushed for greater compensation, to disparage the payout criteria as unfair, and to request more clarity on the deal.

On Thursday, Judge Chhabria gave the objectors each two minutes to argue their cases.

Objector Sarah Feldman’s lawyer argued that the settlement is too small, contending that the potential damages in the case is $6.25 billion, based on the statutory award available under the Video Privacy Protection Act.

That argument ignores the litigation risks of such a claim, Loeser told the court and “just does the math on what the total statutory reward could be.”

The proceedings began in March 2018 after it was revealed that a third-party app developer had taken the personal information of roughly 87 million unsuspecting Facebook users and subsequently sold their data to Cambridge Analytica. The United Kingdom-based political consulting firm was hired by former President Donald Trump’s campaign ahead of the 2016 election.

Cambridge Analytica filed for bankruptcy shortly after the scandal came to light.

Last year, a company spokesperson said the $725 million settlement is in “the best interest of our community and shareholders,” adding that Meta is looking forward to “continuing to build services people love and trust with privacy at the forefront.”

The putative class, encompassing Facebook users between May 2007 and December 2022, asked a San Francisco federal judge to approve the deal earlier this month, noting that such large agreements typically have a very low claims rate. Fewer than 50 objections were filed at that point, according to class counsel, which said only 19,500 people had opted out of the settlement.

In an Aug. 4 filing, the plaintiffs told the court that the settlement has proven remarkably popular and allows for an equitable distribution of financial relief.

The putative class is represented by Lesley E. Weaver, Anne K. Davis, Matthew S. Melamed and Joshua D. Samra of Bleichmar Fonti & Auld LLP, and Derek W. Loeser, Cari Campen Laufenberg, David Ko, Adele A. Daniel, Benjamin Gould, Emma M. Wright, Daniel Mensher, Michael Woerner, Matthew Gerend, Christopher Springer and Eric Fierro of Keller Rohrback LLP.

Meta is represented by Rosemarie T. Ring, Orin Snyder, Deborah Stein, Heather Richardson, Joshua S. Lipshutz, Kristin A. Linsley, Martie Kutscher and Russell H. Falconer of Gibson Dunn & Crutcher LLP.

The case is In re Facebook Inc., Consumer Privacy User Profile Litigation, case number 3:18-md-02843, in the U.S. District Court for the Northern District of California.

–Additional reporting by Lauren Berg and Allison Grande. Editing by Kristen Becker.

Update: This story has been updated with additional counsel information for the plaintiffs.

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