AG Calls For Supreme Court Oversight on Class Action Lawsuits

By Claire Caulfield
Published: Thursday, February 8, 2018 - 4:47pm

Attorney General Mark Brnovich filed a brief Wednesday urging the United States Supreme Court to implement oversight on class action settlements.

Brnovich, joined by the attorneys general of 15 other states, filed an amicus brief calling for the Supreme Court to set limits on so-called “cy pres” agreements. A settlement is considered “cy pres” when majority of the funds are distributed to charities, nonprofits and other organizations instead of directly to consumers.

“It's unfair when the plaintiffs’ lawyers are getting all the money and the companies get to divert money to their favorite pet causes and consumers are basically left holding the bag,” Brnovich said.

The brief focuses on the Google Referrer Header Privacy Litigation class action settlement. Google recently settled a consumer privacy case after disclosing search history of 129 million Americans to third party websites from 2006 to 2014. Google’s parent company settled the suit for $8.5 million in August 2017.

The settlement, which was approved by the 9th U.S. Circuit Court of Appeals allotted more than $2 million to the plaintiffs’ legal fees and $5 million toward outside consumer privacy education and research programs.

“The fact alone that 47 percent of the settlement fund is being donated to the alma maters of class counsel raises an issue which, in fairness, the district court should have pursued further in a case such as this,” wrote 9th U.S. Circuit Judge J. Clifford Wallace in a partial dissent to the settlement.

Carnegie Mellon University, the World Privacy Forum, Chicago-Kent College of Law Center for Information, Society and Policy, the Stanford Center for Internet and Society, the Berkman Center for Internet and Society at Harvard University and that the AARP Foundation will all receive funds.

“So [the 9th Circuit] is allowing companies like Google to divert money to universities and think tanks that support research that ultimately helps them and that doesn’t help consumers in any way possible,” Brnovich said.

“The Supreme Court has never blessed the way the 9th Circuit is doing these 'cy pres' actions,” he said. “So we need to come up with a formula that makes sure that's only used as a last resort instead of a first resort.”

Brnovich is joined by the attorneys general from Alabama, Alaska, Arkansas, Colorado, Idaho, Indiana, Louisiana, Mississippi, Nevada, North Dakota, Oklahoma, Rhode Island, South Carolina, Texas, and Wyoming.

Google did not respond to request for interview.

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