Settlement in watershed case is among the ten largest data privacy class action settlements in U.S. history
SAN JOSE – Meta (NASDAQ: FB), the parent company of Facebook, has agreed to pay $90 million to settle high-profile, long-running data privacy litigation over its use of tracking “cookies” in 2010 and 2011 to track subscribers’ internet use even after they had logged off the Facebook platform. The settlement, submitted for approval late yesterday in the U.S. District Court for the Northern District of California, will rank as one of the ten-largest data privacy settlements in U.S. history, in a case that had already established important precedent for future data privacy litigation. As part of the settlement, Facebook also agreed to sequester and delete all the data at issue, which is believed to be unprecedented in a data privacy class action. The agreement is subject to Court review and approval.
Filed in 2012, the case focuses on Facebook’s use of proprietary plug-ins to track users’ internet browsing on third-party sites. Facebook obtained consent to track subscribers while logged in but promised to stop the tracking once the subscriber logged out. The class action alleged that Facebook continued to track users’ browsing activity even after they had logged off the social media platform.
Even before today’s settlement, the case had already created significant law favoring consumers in future data privacy actions. In a 2020 opinion in this litigation, the U.S. Court of Appeals for the Ninth Circuit held that the unlawful copying and monetization of personal data creates “economic harm,” even if the value of the data in plaintiffs’ hands does not diminish as a result. The finding of economic harm is vital to plaintiffs seeking monetary damages. Lower federal courts had been split on the critical issue, with some requiring a showing that the value of the data in question diminished. The Ninth Circuit also ruled that Facebook was not a party to the communication that it allegedly intercepted for purposes of the Wiretap Act, meaning that its data collection required actual user consent. Facebook appealed the rulings to the U.S. Supreme Court, which, last year, declined to review the case, allowing the Ninth Circuit’s decision to stand.
“We are grateful to the Ninth Circuit for its watershed ruling, and to Facebook for negotiating this resolution in good faith. This settlement not only repairs harm done to Facebook users but sets a precedent for the future disposition of such matters,” said David Straite, co-lead counsel for the plaintiffs and a New York-based partner at DiCello Levitt Gutzler. “I’ve been involved in more than a few data privacy matters in which the defendant would only consider monetary relief or window-dressing injunctive relief. We applaud Facebook’s willingness to also delete the user data that we alleged was improperly collected.”
Today’s settlement sets a new bar for data privacy lawsuits. Plaintiffs believe the $90 million settlement fund, no part of which will revert to Facebook, represents at least 100% of any unjust profits earned on the data at issue. The injunctive relief, meanwhile, requires Facebook to sequester and eventually delete all data that the plaintiffs alleged was wrongfully collected during the class period. The agreement to delete data is the “gold standard” for non-monetary relief in data privacy class actions of this kind.
This marks DiCello Levitt’s second top-ten settlement among all data privacy and data breach class actions. In 2019, partner Amy Keller served as plaintiffs’ co-lead counsel in the Equifax data breach litigation, helping secure a $505.5 million common fund settlement, with an additional $1 billion in injunctive relief, which remains the largest data breach settlement in U.S. history.
Top 10 Data Privacy and Data Breach Class Action Settlements
In the Facebook case, Straite and DiCello Levitt were joined by co-lead counsel Stephen G. Grygiel of Grygiel Law LLC and Jason “Jay” Barnes of Simmons Hanly Conroy LLP.
“It’s been an honor co-leading this action with David and his colleagues at DiCello Levitt on a case of such monumental importance to U.S. consumers,” Grygiel said. “It’s truly a wake-up call for internet and advertising companies who collect user data and use advanced browser tracking.”
A copy of the settlement agreement is available upon request, and Straite is available for media interviews. The case is In re: Facebook Internet Tracking Litigation, case number 5:12-MD-2314-EJD, in the U.S. District Court for the Northern District of California, San Jose Division.
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