In Re Quantcast Advertising Cookie Litigation

Filing 78

RESPONSE IN SUPPORT of MOTION for Attorney Fees and Final Approval of Class Action Settlement #76 Supplement to Plaintiffs' Motion For Final Approval of Class Action Settlement filed by Plaintiff Edward Valdez. (Attachments: #1 Declaration Declaration of Scott A. Kamber)(Kamber, Scott)

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SCOTT A. KAMBER (pro hac vice)
[e-mail]
DAVID A. STAMPLEY (pro hac vice)
[e-mail]
KAMBERLAW, LLC
100 Wall Street, 23rd Floor
New York, New York 10005
Telephone: [phone]
Facsimile: [phone]
Class Counsel
Additional counsel listed on signature page
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
In Re QUANTCAST ADVERTISING
COOKIE LITIGATION, and
In Re CLEARSPRING FLASH
COOKIE LITIGATION

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No. 2:10-cv-05484-GW-JCG
No. 2:10-cv-05948-GW-JCG
[Assigned to the Hon. George H. Wu]
SUPPLEMENT TO PLAINTIFF’S
MOTION FOR FINAL APPROVAL
OF CLASS ACTION SETTLEMENT
Date:
Location:

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Time:

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June 13, 2011
Courtroom 10
312 N. Spring Street
Los Angeles, CA 90012
9:30 a.m.

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Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No. 2:10-cv-05484-GW-JCG
No.2:10-cv-05948-GW-JCG

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I.

INTRODUCTION
This well-publicized settlement of a nationwide class of millions of Inter-

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net users drew just a single objection. That objection should be overruled, and the

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settlement approved, because the objector who filed it misapprehended a basic

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fact of the settlement: Although, at the Court’s specific direction, plaintiffs

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conspicuously identified their proposed recipients of cy pres payments and the

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amounts each recipient would receive, the objector incorrectly complains that the

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cy pres recipients have not been identified. This basic information was provided

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in summary form in the notice, and in detail in the documents provided on the

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settlement website. The objector is an attorney, making his failure to conduct a

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reasonable inquiry before filing his objection inexcusable.1
The Court already is familiar with this case, the issues it presents and the

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appropriate resolution at which the parties mutually arrived. Plaintiffs contend in

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these actions that defendants Quantcast and Clearspring placed Adobe Flash

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Player local stored objects (“LSOs” or “Flash cookies”) on class members’

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computers without adequate disclosure, and then, if users deleted the standard

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browser cookies that Quantcast and Clearspring also implanted for the purpose of

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tracking users’ web browsing history, Quantcast and Clearspring used the infor-

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mation stored in the Flash cookies to regenerate the deleted browser cookies and

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resume the tracking that users believed they had foreclosed. Plaintiffs also sued

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several large customers of Quantcast and Clearspring whose websites Quantcast

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and Clearspring allegedly used to implant these Flash cookies.
All defendants deny liability and initially expressed an intent to defend

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Plaintiffs’ case vigorously. Pursuant to the proposed settlement, however,

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Quantcast and Clearspring promise not to use Flash cookies to regenerate infor-

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In fact, this objector also filed the same objection with the same mistake in
the VideoEgg Settlement as well. He has refused to withdraw either objection
even though his error was brought to his attention.

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Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No. 2:10-cv-05484-GW-JCG
No.2:10-cv-05948-GW-JCG

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mation deleted from browser cookies. As compensation to the class, Quantcast

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and Clearspring further have agreed to pay $2.4 million, the bulk of which (after

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the deduction of notice and administration costs and Plaintiffs’ counsel’s fee) will

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be distributed to groups that conduct research and educate users about important

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internet privacy issues. The customer defendants and their corporate parents,

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referred to in the settlement as the “Undertaking Parties,” have promised to

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modify their website disclosures in ways that will benefit the class, and to use

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their substantial clout to request that the industry rules governing behavioral

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advertising are changed to prevent any company — not just Quantcast and

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Clearspring — from using Flash cookies to “respawn” user-deleted browser

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cookies.

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On March 3, 2011, this Court granted preliminary approval to the settle-

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ment (Quantcast action, Dkt. 72; Clearspring action, Dkt. 49). The Court ap-

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proved a notice plan, pursuant to which the Settlement Administrator caused

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notice of the settlement to be widely distributed in print and online media. Plain-

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tiffs filed their motions for Final Approval of Class Action Settlement and Ap-

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proval of Attorneys’ Fees and Costs and Incentive Awards on April 20, 2011

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(“Final Approval Motion” Quantcast action Dkt 76; Clearspring action Dkt. 53),

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so that anyone contemplating an objection to the settlement could review all this

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information long before the deadline for objections passed. The Court’s prelimi-

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nary approval order then directed plaintiffs to file this final brief responding to

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any objections received.

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Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No. 2:10-cv-05484-GW-JCG
No.2:10-cv-05948-GW-JCG

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II.

THE SETTLEMENT WARRANTS FINAL APPROVAL
Plaintiffs’ prior brief in support of final approval explained the standards

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pursuant to which Ninth Circuit courts should evaluate proposed class action

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settlements. See Quantcast action Dkt 76 at 9-10; Clearspring action Dkt. 53 at

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9-10. Plaintiffs’ final brief addressed seven of the eight factors the Ninth Circuit

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identified in Molski v. Gleich, 318 F.3d 937, 953 (9th Cir. 2003).2 This brief

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addresses the final factor in the Court’s determination of the fairness, adequacy,

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and reasonableness of the settlement: Class members’ reaction to the settlement,

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which has been overwhelmingly positive.

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A.

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Reaction of Class Members
“It is established that the absence of a large number of objections to a

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proposed class action settlement raises a strong presumption that the terms of a

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proposed class action settlement are favorable to the class members.” Nat’l Rural

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Telecomms Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528-29 (C.D. Cal. 2004).

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Here, out of tens of millions of class members, only one person objected to the

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well-publicized settlement, and only one person opted out. This is an extraordi-

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nary result that favors the settlement’s approval. See Churchill Village LLC v.

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Gen. Elec., 361 F.3d 566, 577 (9th Cir. 2004).

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The parties established a dedicated website,

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www.flashcookiesettlement.com, to provide information about the settlement,

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including the full Notice, the Settlement Agreement and all of the important court

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filings in the case. The parties published a summary notice in Parade magazine

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— an insert in millions of Sunday newspapers across the country — as well as

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The Molski factors are: (1)[T]he strength of plaintiffs’ case; (2) the risk,
expense, complexity, and likely duration of further litigation; (3) the risk of
maintaining class action status throughout the trial; (4) the amount offered in
settlement; (5) the extent of discovery completed, and the stage of the proceedings; (6) the experience and views of counsel; (7) the presence of a governmental
participant; and (8) the reaction of the class members to the proposed settlement.
Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No.2:10-cv-05948-GW-JCG

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Computer World, Information Week, and Newsweek. The parties also conducted

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an Internet notice campaign that included banner and text ads placed on websites

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that have the largest number of unique viewers per month on the Google Adwords

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network; and distributed a press release. Articles about the settlement appeared in

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numerous major media. Nearly 10,000 people took the time to visit the settlement

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website, but only one person filed an objection.
Even if Cannata’s lone objection was a serious one — which, as explained

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below, it is not — the receipt of just a single objection should weigh heavily in

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favor of the Court approving this Settlement. See Ellis v. Naval Air Rework

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Facility, 87 F.R.D. 15, 18 (N.D. Cal. 1980) (fact that only three out of 2,500 class

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members maintained objections to the settlement showed an “overwhelming

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sentiment of the class in favor of the [d]ecree, a factor which provides strong

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support for the fairness of its terms”); Fernandez, 2008 WL 8150856 at * 7 (three

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objections out of 77,000 notices mailed suggests an “overwhelmingly positive”

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reaction). Here, because the objection is factually wrong, meaning that no class

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members submitted a valid objection to any aspect of the settlement, the eighth

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Molski factor weighs entirely in favor of the settlement’s approval.

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B.

Objection by Sam Cannata
The lone objector, attorney Sam Cannata, objects to the Settlement on the

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grounds that (1) it failed to fully designate cy pres recipients; (2) it does not

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require specific improvements in privacy controls; and (3) it provides no benefits

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to the class. Each of Mr. Cannata’s statements is incorrect.

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Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No.2:10-cv-05948-GW-JCG

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1.

The Parties Have Provided the Names of Cy Pres Recipients
Mr. Cannata claims that the Settlement is unfair, inadequate, and unrea-

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sonable because it fails to identify and determine the Fund recipients. (Obj. p. 8).

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However, as explained to Mr. Cannata in an email dated May 13, 2011 by the

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Undertaking Parties’ counsel Jeffrey Jacobson, (Declaration of Scott A. Kamber,

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Ex. A), Plaintiffs’ counsel identified the Fund recipients in a letter to the Court on

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January 20, 2011 — prior to this Court’s preliminary approval of the settlement.

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(Quantcast action, Dkt. 63; Clearspring action, Dkt. 42). In addition to filing the

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list of cy pres recipients with the Court, the list of recipients was available for

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download on the settlement website, www.flashcookiesettlement.com. Mr.

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Cannata had ample time to review the proposed recipients. The chosen recipients

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include an impressive array of organizations committed to the privacy issues that

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are at the heart of this litigation.

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2.

The Settlement Provides For Specific Improvements in Privacy Controls
Mr. Cannata objects to the Settlement to the extent that he feels it does not

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provide any specific improvements or privacy education, any standards for such

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improvements, or any oversight of such improvements. (Obj. p. 10). These

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objections lack any foundation, and show a misunderstanding of the terms of the

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Settlement.

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First, Plaintiff’s counsel and outside experts confirmed that Defendants

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Quantcast and Clearspring are no longer engaged in the activity at issue in this

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litigation, and had ended the practice prior to the filing of the lawsuits. Even

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given these circumstances, the Plaintiffs were able to obtain enforceable promises

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from Quantcast and Clearspring that they would not resume this conduct. This is

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not a “vague promise”; it is part of an enforceable Settlement Agreement. The

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Settlement Agreement also required the Undertaking Parties to lobby to enact

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meaningful reforms to the industry’s self-regulatory guidelines to include express
Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No.2:10-cv-05948-GW-JCG

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prohibitions on the use of LSOs — lobbying that, pursuant to the Settlement

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Agreement’s terms, already has begun. Again, these actions are part of an

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enforceable Settlement Agreement, and if not performed may subject Defendants

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to court action. These are substantive improvements that require action on the

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part of Defendants. While these provisions are only enforceable through June 30,

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2013, it is assumed that these provisions will be embodied in new industry guide-

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lines, which will continue to effect change into the future. It was not feasible to

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make these provisions unlimited in duration due to the constant changes in tech-

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nology.

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3.

The Settlement Provides a Substantial Benefit to the Class
Mr. Cannata’s contention that there is no benefit to the class is simply

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wrong. Quantcast and Clearspring are paying $2.4 million to resolve this case,

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and the Undertaking Parties, whose websites are some of the most heavily traf-

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ficked on the Internet, are making meaningful changes to their privacy disclo-

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sures. Contrary to Mr. Cannata’s contention that the Settlement allows Defend-

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ants “unfettered discretion” in deciding their obligations, Obj. p. 11, the Settle-

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ment Agreement, in ¶¶ 4.19-4.20.6, specifies each Defendant’s obligations in

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detail. Although it is true that the settlement funds will not be distributed to class

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members directly (because the class presumptively numbers in the tens of millions

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and because class members cannot be individually identified), the cy pres recipi-

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ents’ efforts will improve Internet privacy for the current Internet users that

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comprise the Settlement Class, and future users, too. 3

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As set forth more fully in Plaintiffs’ Final Approval Motion, a cy pres distribution was appropriate considering the size of the potential recovery per Class
member, and the fact that injunctive relief represented a large part of the recovery. See State of New York v. Keds Corp., 1994 WL 97201 at *3 (S.D.N.Y.);
Francisco v. Numismatic Guaranty Corp. of Am., 2008 WL 649124 (S.D. Fl.).
Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No.2:10-cv-05948-GW-JCG

The recipients chosen for the cy pres distributions are well known, highly

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regarded organizations. The cy pres distributions will fund research and educa-

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tion projects and activities to promote consumer awareness and choice regarding

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the privacy, safety and security of personal information that is collected through

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the Internet— a direct benefit to Class members whose privacy rights were alleg-

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edly violated. See In re Mexico Money Transfer Litig., 164 F. Supp.2d 1002,

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1031-32 (N.D. Ill. 2000) (approving cy pres distribution to entities whose primary

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purpose included service to the plaintiff communities).
Mr. Cannata, the objector, is familiar with class action litigation. See, e.g.,

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Restivo v. Continental Airlines, Inc., __ N.E.2d __, 2011 WL 287019 (Ohio App.

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Ct Jan. 20, 2011) (affirming dismissal of putative class claims brought by Mr.

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Cannata’s client for failure to state a claim).4 He has objected to class action

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settlements before. See, e.g., In re Merck & Co., Inc. Vytorin ERISA Litig., No.

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08-CV-285 (DMC), 2010 WL 547613, at *7 n.3 (D. N.J. Feb. 9, 2010) (Cannata

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objected to plaintiffs’ fee award but withdrew his objection after plaintiffs’

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counsel agreed to reduce their cost reimbursement request by $55,000 and to pay

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a portion of this amount to Mr. Cannata).

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Troublingly,
although
Mr.
Cannata’s
firm
website,
www.cannataphillipslaw.com/ staff.html, describes him as having “over 16 years
of experience handling various legal matters,” it appears he has only been an
admitted attorney since 2005. See In re Administrative Actions Dated April 30,
2004, 807 N.E.2d 929 (listing Mr. Cannata as having successfully passed the bar
exam in 2004).
Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No.2:10-cv-05948-GW-JCG

III.

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CONCLUSION

For the reasons stated above, as well as the reasons set forth more fully in

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Plaintiffs’ Final Approval Motion, the Court should deny Mr. Cannata’s objection

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and grant final approval of the Settlement Agreement.

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Dated May 31, 2011

KAMBERLAW, LLC

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/s Scott A. Kamber
Scott A. Kamber (pro hac vice)
[e-mail]
David A. Stampley (pro hac vice)
[e-mail]
KamberLaw, LLC
100 Wall Street, 23rd Floor
New York, New York 10005
Telephone: [phone]
Facsimile: [phone]

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Class Counsel

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Avi Kreitenberg (SBN 266571)
[e-mail]
KamberLaw, LLP
1180 South Beverly Drive, Suite 601
Los Angeles, California 90035
Telephone: [phone]
Facsimile: [phone]
Joseph H. Malley
[e-mail]
Law Office of Joseph H. Malley
1045 North Zang Blvd Dallas, TX 75208
Telephone: [phone]

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Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No. 2:10-cv-05484-GW-JCG
No.2:10-cv-05948-GW-JCG

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David Parisi (SBN 162248)
[e-mail]
Suzanne Havens Beckman (SBN 188814)
[e-mail]
Parisi & Havens LLP
15233 Valleyheart Drive
Sherman Oaks, California 91403
Telephone: [phone]
Jeremy Wilson
[e-mail]
Kenneth P. Trosclair
[e-mail]
Wilson Trosclair & Lovins, P.L.L.C.
302 N. Market St., Suite 510
Dallas, Texas 75202
Telephone: [phone]

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Majed Nachawati
[e-mail]
Fears Nachawati Law Firm
4925 Greenville Ave, Suite 715
Dallas, Texas 75206
Telephone: [phone]

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Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No.2:10-cv-05948-GW-JCG

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CERTIFICATE OF SERVICE

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The undersigned hereby certifies that copies of the foregoing document and the

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accompanying declaration were served via e-mail to all counsel of record regis-

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tered for service through the CM/ECF. Further, the undersigned caused the

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foregoing to be served by first class U.S. mail to the following on May 31, 2011:

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Via First Class Mail:
Sam. P. Cannata
Pro Se Objector
9555 Vista Way, Suite 200
Cleveland, Ohio 44125
/s Scott A. Kamber

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Supplement To Plaintiffs’ Motion
For Final Approval of Class Action Settlement

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No. 2:10-cv-05484-GW-JCG
No.2:10-cv-05948-GW-JCG