Consumer Watchdog disclosed that it joined the Electronic Privacy Information Center (EPIC) and three other public interest groups on Aug. 22 in opposing a proposed $8.5 million settlement in a class action suit against Google for privacy violations in the way it handled users' search data because of at least "three obvious deficiencies" in the proposal.
In a letter to Judge Edward J. Davila, the groups wrote that the proposed settlement should be rejected because: "(1) it fails to require Google to make any substantive changes to its business practices; (2) it provides no monetary relief to the class; and (3) the proposed cy pres allocations do not meet the Ninth Circuit's requirements for alignment with the interests of class members."
The letter from EPIC, Consumer Watchdog, the Center for Digital Democracy, Patient Privacy Rights, and Privacy Rights Clearinghouse concluded:
"The absence of a benefit to the class combined with the proposed allocation of awards to institutions not aligned with the interests of class members is not accidental. Proposed class counsel, seeking to settle the matter and obtain their fees, have prioritized their own personal financial interests above the interests of the Class. It may serve their interests to have the preliminary settlement approved; it serves the putative Class members not all. For these reasons, the preliminary settlement agreement should be rejected."
A copy of the public interest groups' letter is available at: http://is.gd/x1j1HJ
"Bad settlements seriously undermine the effectiveness of class action suits in protecting consumers against corporate wrongdoing," said John M. Simpson, Consumer Watchdog's Privacy Project director. "They do nothing but fatten the pockets of the attorneys."
The suit charges that Google shared search queries with third parties without the searchers knowing about it or giving them permission to do so.
A copy of the proposed settlement is available at: http://is.gd/GBRluq
The letter noted that the suit was brought under laws that provide statutory damages of as much as $1,000 per violation. "Given the mpotential statutory damages at stake, the omission of any monetary mrelief to class members is a glaring deficiency," the letter said.
Cy pres awards are a "next best" way of distributing settlement funds when it would be difficult to distribute the money to class members, but the recipients should further the interests of the class. "In fact, of the seven organizations that would receive the cy pres funds under the Parties' preliminary proposal, only one of these organizations — the World Privacy Forum — has the protection of privacy as a mission and is aligned with the interests of class members," the groups wrote.
Besides the World Privacy Forum, the settlement proposes giving money to Carnegie-Mellon, Chicago-Kent College of Law Center for Information, Society, and Policy, Berkman Center for Internet and Society at Harvard University, Stanford Center for Internet and Society, MacArthur Foundation, and AARP, Inc.
Commenting on the choice of the cy pres recipients the groups wrote:
"It may be significant that several of the proposed recipients of cy pres funds are favored charities of defendant Google, which routinely provides funding to these organizations for the benefit of Google. As the Ninth Circuit has stated, 'it seems somewhat distasteful to allow a corporation to fulfill its legal and equitable obligations through tax-deductible donations to third parties.' Furthermore, in terms of deterrence, the Ninth Circuit considers such schemes a 'paper tiger.' We also note a disturbing amount of overlap between the proposed cy pres recipients and the alma maters of the counsel in this matter: proposed class counsel Michael J. Aschenbrener (J.D., Chicago-Kent College of Law) and Kassra P. Nassiri (M.A., Stanford; J.D., Harvard); and defense counsel Eric Butler Evans (A.B., A.M., Harvard University). That such ties exist does not preclude the award of cy pres funds to these institutions, but they clearly cannot properly provide the basis."
The groups recommended the court use a cy pres application process to protect the interests of the class. "We also note that in other similar matters, courts have asked parties to set up an objective application process that provides a basis to select cy pres recipients to ensure that the interests of the class are served and to protect against conflicts of interest. For example, in In re Google Buzz Privacy Litigation the court established a formal application process and asked each organization to provide detailed information that would justify the cy pres award," they wrote.
A hearing on the case, In re Google Referrer Header Privacy litigation, Case 5:10-cv-04809-EJD, was scheduled before Judge Edward J. Davila at 9 am Friday, Aug. 23, in Federal District Court in San Jose, CA.