WHERE DO WE GO FROM HERE: ARTICLE III STANDING AND CY PRES-ONLY SETTLEMENTS IN PRIVACY CLASS ACTIONS IN THE WAKE OF FRANK V. GAOS
By Bethany Caracuzzo1
This term, the Supreme Court heard argument in Frank v. Gaos.2The case involves an objector appeal to a class settlement reached in multi-district litigation against Google, in which plaintiffs allege the internet search engine violated users’ privacy by collecting and disclosing their internet search terms to owners of third-party websites. The lead objector and petitioner, Theodore Frank, founder of the Competitive Institute’s Center for Class Action Fairness (CCAF), and a frequent opponent of class action settlements, obtained certiorari to a challenge of the settlement, which took the form of an "all cy pres3 settlement" providing for $5.3 million in charitable contributions to several non-profits, including the law schools of lead plaintiff’s counsel, in lieu of any monetary or other compensation to an estimated 129 million unnamed class members.4
As everyone braced for what the high court had in store for cy pres settlements,5 a funny thing happened. At oral argument on October 31, 2018, the justices devoted much of their questioning6 to the issue of whether plaintiffs had suffered an "injury-in-fact" sufficient to confer Article III standing as required by the Supreme Court’s 2016 ruling in Spokeo, Inc. v. Robins.7 Justices Gorsuch and Kavanaugh, who joined the Court after Spokeo was decided, were active in the hearing debate on this issue.8 Indeed, the standing question, which had not been formally briefed previously, was of such significance that the Supreme Court ordered the parties to provide post-argument supplemental briefing directed solely to that issue.9 That briefing concluded in late December 2018.