Class Actions: Ninth Circuit Affirms 25% Class Action Fee Award Based On Cy Pres Payments/Injunctive Relief Settlements

Majority Author Affirms The Settlement, But—In A Concurrence—Writes It Is Time To Reconsider The Practice Of Cy Pres Awards.

            In In re Google Inc. Street View Electronic Communications Litig., Case No. 20-15616 (9^th Cir. Dec. 27, 2021) (published), the Ninth Circuit affirmed a district judge’s approval of a settlement in a 60-million member class action alleging that Google illegally collected members’ Wi-Fi data through its Street View program.  The parties reached a settlement involving injunctive relief, cy pres payments totaling $13 million to 9 Internet privacy advocacy groups, attorney’s fees to class counsel amounting to 25% of the settlement fund, and class representative service awards—but no direct monetary payments to class members based on the difficulty in determining distribution of funds to such a large class and the technical challenges to verifying class members’ claims.  The district judge approved the settlement, which was affirmed by the Ninth Circuit in a majority opinion authored by Circuit Judge Bade, who also penned a concurring opinion.

            The Court of Appeals rejected the argument that the district judge “blindly applied” a 25% benchmark for the fee award, determining cy pres payments could be considered a tangible settlement value and augmented by the tangible benefit from the injunctive relief.  However, Judge Bade in a concurrence did indicate that the Ninth Circuit should revisit the propriety of cy pres awards based on commentary indicating that it does not provide an indirect benefit to class members and that it is rife with conflicts between class members, class counsel, and the third party beneficiaries of the actual monetary distributions.