Hibnick v. Google Inc.

Filing 152

Transcript of Proceedings held on 10-04-10, before Judge James Ware. Court Reporter/Transcriber Lee-Anne Shortridge, Telephone number 408-287-4580. Per General Order No. 59 and Judicial Conference policy, this transcript may be viewed only at the Clerks Office public terminal or may be purchased through the Court Reporter/Transcriber until the deadline for the Release of Transcript Restriction.After that date it may be obtained through PACER. Any Notice of Intent to Request Redaction, if required, is due no later than 5 business days from date of this filing. Release of Transcript Restriction set for 11/1/2011. (las, ) (Filed on 8/3/2011)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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IN RE GOOGLE BUZZ USER
PRIVACY LITIGATION,

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C-10-00672 JW
SAN JOSE, CALIFORNIA
OCTOBER 4, 2010
PAGES 1-25

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TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE JAMES WARE
UNITED STATES DISTRICT JUDGE

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A P P E A R A N C E S:

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FOR THE PLAINTIFFS: RAM & OLSON
BY: MICHAEL F. RAM
555 MONTGOMERY STREET, SUITE 820
SAN FRANCISCO, CALIFORNIA 94111

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MASON LLP
BY: GARY E. MASON
1625 MASSACHUSETTS AVENUE, NW
SUITE 605
WASHINGTON, D.C. 20036

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HARVARD LAW SCHOOL
BY: WILLIAM B. RUBENSTEIN
1545 MASSACHUSETTS AVENUE
CAMBRIDGE, MASSACHUSETTS 02138
APPEARANCES CONTINUED ON NEXT PAGE

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OFFICIAL COURT REPORTER: LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595

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APPEARANCES (CONTINUED)

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FOR THE DEFENDANT:

PERKINS COIE
BY: SUSAN FAHRINGER
1201 THIRD AVENUE, SUITE 4800
SEATTLE, WASHINGTON 98101

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SAN JOSE, CALIFORNIA

OCTOBER 4, 2010

P R O C E E D I N G S
(WHEREUPON, COURT CONVENED AND THE
FOLLOWING PROCEEDINGS WERE HELD:)
THE CLERK:

CALLING CASE NUMBER 10-672,

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IN RE GOOGLE BUZZ PRIVACY LITIGATION, ON FOR

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PRELIMINARY APPROVAL HEARING.

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TEN MINUTES EACH SIDE.

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COUNSEL, PLEASE COME FORWARD AND STATE

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YOUR APPEARANCES.
MR. RAM:

GOOD MORNING, YOUR HONOR.

MICHAEL RAM OF RAM & OLSON FOR THE PLAINTIFFS.
AND I'D LIKE TO PLEASE INTRODUCE LEAD

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COUNSEL, GARY MASON FROM THE MASON LAW FIRM; AND

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CO-COUNSEL PROFESSOR WILLIAM RUBENSTEIN.

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THE COURT:

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MS. FAHRINGER:

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GOOD MORNING.
SUSAN FAHRINGER FROM

PERKINS COIE ON BEHALF OF GOOGLE, INC.

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THE COURT:

GOOD MORNING.

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MR. MASON:

GOOD MORNING, YOUR HONOR.

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I'M GARY MASON OF MASON LLP, AND I'M GOING TO BE

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SHARING THE ARGUMENT THIS MORNING WITH

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PROFESSOR RUBENSTEIN.

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THIS MORNING, YOUR HONOR, WE'RE HERE ON
THE PRELIMINARY APPROVAL HEARING FOR THE GOOGLE
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PRIVACY SETTLEMENT, AND WE'LL BE ASKING THE COURT

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THIS MORNING TO CONSIDER SEVERAL ISSUES THAT WERE

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RAISED IN OUR PAPERS WHICH I'M SURE YOUR HONOR IS

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FAMILIAR WITH.

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THE FIRST, OF COURSE, IS WHETHER THE
SETTLEMENT IS FAIR, ADEQUATE, AND REASONABLE.
THE SECOND ISSUE IS WHETHER THE

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SETTLEMENT SHOULD BE PROVISIONALLY CERTIFIED.

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THE THIRD ISSUE WE ASK THE COURT TO

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CONSIDER THIS MORNING IS WHETHER THE PROPOSED

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NOTICE SHOULD BE APPROVED AND DISSEMINATED.

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AND LASTLY, WE HOPE TO ASK YOUR HONOR TO

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ENTER THIS MORNING THE PRELIMINARY APPROVAL ORDER

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WHICH WE SUBMITTED WITH OUR PAPERS AND WHICH WE

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AMENDED JUST THIS WEEK, AND LATER IN THIS

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PRESENTATION I'LL EXPLAIN THE AMENDMENTS.

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BUT WHAT I'D LIKE TO DO, YOUR HONOR, IS

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ASK PROFESSOR RUBENSTEIN TO ADDRESS THE FIRST TWO

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ISSUES, WHETHER THE SETTLEMENT IS FAIR, ADEQUATE,

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AND REASONABLE, AND WHETHER THE SETTLEMENT CAN BE

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PROVISIONALLY CERTIFIED.

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AND THEN, YOUR HONOR, I WOULD LIKE TO

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DISCUSS THE NOTICE WITH YOU AND REVIEW THE

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PRELIMINARY APPROVAL ORDER.

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SO IF THAT'S ACCEPTABLE WITH YOU, I'LL
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ASK PROFESSOR RUBENSTEIN TO START THE ARGUMENT.

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THE COURT:

VERY WELL.

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MR. MASON:

THANK YOU, YOUR HONOR.

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MR. RUBENSTEIN:

THANK YOU, YOUR HONOR.

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I'M GOING TO TALK ABOUT FIVE THINGS VERY BRIEFLY:

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THE FACTS OF THE CASE; THE CAUSES OF ACTION THAT WE

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RAISED IN OUR COMPLAINT; THE SETTLEMENT PROCESS;

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THE SETTLEMENT TERMS; AND THE MOTION FOR CLASS

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CERTIFICATION.

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THE FACTS OF THE CASE, YOUR HONOR, ARE

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STARTING ON FEBRUARY 9TH, GOOGLE INTRODUCED A NEW

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PROGRAM CALLED BUZZ, WHICH IS A SOCIAL NETWORKING

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PROGRAM, SOMEWHAT OF AN ATTEMPT, WE ALLEGE, TO

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COMPETE WITH FACEBOOK OR TWITTER.

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TO CREATE THIS, WHAT GOOGLE DID IS IT

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ATTACHED IT TO GOOGLE'S EXISTING E-MAIL PROGRAM,

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WHICH IS CALLED GMAIL, SO THAT WHEN GMAIL USERS

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SIGNED ON TO THEIR GMAIL PROGRAM ON FEBRUARY 9TH,

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ALL OF A SUDDEN THERE WAS THIS THING CALLED GOOGLE

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BUZZ THERE AND THEY WERE ASKED TO CLICK ON IT AND

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CHECK IT OUT.

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THE WAY GOOGLE ATTEMPTED TO GET STARTED

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WITH THE SOCIAL NETWORKING PROGRAM WAS TO TAKE

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INFORMATION FROM GMAIL USER'S E-MAIL ACCOUNTS AND

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MIGRATE THAT INTO BUZZ.
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SPECIFICALLY THEY DID THREE THINGS:

THEY

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WENT THROUGH THE USER'S MOST FREQUENT CONTACTS IN

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THEIR E-MAIL PROGRAM AND THEY IDENTIFIED THOSE.

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THEN THEY SECOND IMPORTED THOSE INTO BUZZ

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AS YOUR AUTOMATIC FOLLOWER AND FOLLOWING LISTS,

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WHICH ARE ESSENTIALLY WHAT YOUR FRIENDS WOULD BE ON

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FACEBOOK OR YOUR FOLLOWERS ON TWITTER.

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SOCIAL NETWORK.

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IT'S YOUR

AND SO THEY SUGGESTED OR ACTUALLY

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AUTOMATICALLY SET UP THE PEOPLE IN YOUR PROGRAM AS

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THAT.

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AND THEN, THIRD, THEY AUTOMATICALLY
ATTACHED BUZZ TO YOUR GMAIL PROGRAM.
SO WHEN USERS WOKE UP AND FOUND THIS IN

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GMAIL, IF THEY CLICKED THROUGH IT, WHAT HAPPENED

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WAS ALL OF A SUDDEN THEY HAD THESE FOLLOWER AND

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FOLLOWING LISTS PUBLICLY AVAILABLE ON THE WEB, AND

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GOOGLE HAD STATED PUBLICLY THAT THESE WERE THE

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PEOPLE THAT YOU E-MAILED WITH MOST FREQUENTLY.

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SO WHAT RAISED PRIVACY CONCERNS WAS THE

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CONFLATION OF THE E-MAIL CONTACT LIST WITH THE

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PUBLICITY OF THE SOCIAL NETWORKING PROGRAM, AND IT

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FELT FOR A LOT OF PEOPLE LIKE THE PEOPLE THEY

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E-MAILED WITH MOST FREQUENTLY WEREN'T NECESSARILY

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THE PEOPLE THEY WANTED PUBLICLY IDENTIFIED AS THEIR
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FRIENDS OR FOLLOWERS IN THIS SOCIAL NETWORKING

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PROGRAM.

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WE ALL HAVE IN OUR E-MAIL ACCOUNTS OFTEN

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VERY PRIVATE INFORMATION.

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CLIENTS, DOCTORS MAY HAVE THEIR PATIENTS.

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US HAVE CONFIDENTIAL PEOPLE WITH WHOM WE

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COMMUNICATE WHO WE WOULDN'T WANT TO PUBLICIZE TO

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THE WORLD AS OUR MOST FREQUENT CONTACTS.

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ATTORNEYS MAY HAVE
ALL OF

SO THERE WAS QUITE A CONCERN ABOUT THE

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PRIVACY ASPECTS OF THIS WHEN BUZZ WAS LAUNCHED.

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WE FILED SUIT ON FEBRUARY 17TH, EIGHT

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DAYS LATER.

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SUBSEQUENTLY FOUR OTHER GROUPS FILED

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LAWSUITS, ALL FIVE OF WHICH ARE NOW CONSOLIDATED IN

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THIS CASE, AND A CONSOLIDATED AMENDED COMPLAINT WAS

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FILED OVER THE SUMMER.

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THE COMPLAINT, YOUR HONOR, ALLEGES THREE

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FEDERAL STATUTORY CLAIMS, STATUTORY CLAIMS UNDER

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THE STORED COMMUNICATIONS ACT, UNDER THE FEDERAL

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WIRETAP ACT, AND UNDER THE COMPUTER FRAUD AND ABUSE

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ACT.

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WE ALSO ALLEGE TWO STATE LAW CLAIMS, A

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TORT CLAIM FOR THE PUBLIC DISCLOSURE OF PRIVATE

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FACTS, AND A CONTRACT CLAIM FOR THE BREACH OF

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CONTRACT WITH GOOGLE'S TERMS OF SERVICE PROGRAM.
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ALMOST FROM THE TIME WE FILED THE

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LAWSUIT, GOOGLE REACHED OUT TO US TO TALK ABOUT THE

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PROGRAM AND TO SEE IF WE COULD VOLUNTARILY TALK

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ABOUT SETTLING THE PROCESS WITHOUT LITIGATING IT

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TOO STRENUOUSLY.

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TO THAT END, WE'VE HAD SEVERAL MEETINGS

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WITH GOOGLE, THE FIRST OF WHICH WAS ON APRIL 21ST

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IN SAN FRANCISCO AT THEIR COUNSEL'S OFFICE.

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AT THAT MEETING, THEY MADE AVAILABLE THE

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EXECUTIVE VICE-PRESIDENT OF GOOGLE, WHO'S IN CHARGE

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OF THE BUZZ PROGRAM.

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HE WALKED US THROUGH AND EXPLAINED THE

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PROGRAM, AND WE HAD THE OPPORTUNITY TO ASK HIM

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QUESTIONS AND TALK BACK AND FORTH ABOUT OUR PRIVACY

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CONCERNS AND HEAR HIS ANSWERS ABOUT THE PROGRAM AT

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THAT MEETING.

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AT THAT MEETING, GOOGLE ALSO HAD THEIR

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LAWYERS PRESENT TO US THEIR REACTION TO OUR LEGAL

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CLAIMS, WHICH WAS ESSENTIALLY AN ORAL PRESENTATION

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OF THEIR MOTION TO DISMISS.

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AND WE THEN SPENT SEVERAL HOURS WITH
GOOGLE TALKING ABOUT BOTH THE FACTS AND THE LAW.
WE CULMINATED THAT MEETING BY DECIDING TO
HAVE A FORMAL MEDIATION LATER THAT SPRING.
BEFORE THE FORMAL MEDIATION, WE GOT
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DOCUMENTS FROM GOOGLE IN PREPARATION FOR THE

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MEETING.

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WE THEN PREPARED -- BOTH SIDES PREPARED

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MEDIATION STATEMENTS.

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YOUR HONOR, WITH 30 PAGE OF LEGAL ARGUMENT, SO IT

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WAS ESSENTIALLY OUR ANSWER TO THEIR MOTION TO

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DISMISS.

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OURS WAS A 75 PAGE BRIEF,

THE MEDIATION WAS HELD ON JUNE 2ND AT THE

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JAMS OFFICE IN SAN FRANCISCO IN FRONT OF THE

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HONORABLE FERN SMITH, RETIRED UNITED STATES

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DISTRICT COURT JUDGE.

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AT THE BEGINNING OF THE MEDIATION, I

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SPENT A HALF HOUR IN FRONT OF JUDGE SMITH

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PRESENTING OUR SIDE OF THE CASE AND THE LEGAL

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ARGUMENTS TO HER AND TO GOOGLE.

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WE THEN MEDIATED ALL DAY FOR OVER 14

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HOURS, AT THE END OF WHICH WE CULMINATED WITH A

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TERM SHEET WHICH I'LL DESCRIBE IN A SECOND.

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FOLLOWING THE MEDIATION, DURING THE

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SUMMER, THERE WAS CONFIRMATORY DISCOVERY.

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PROVIDED US THOUSANDS OF PAGES OF DOCUMENTS,

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INCLUDING, PERHAPS MOST IMPORTANTLY, ALL OF THE

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FEEDBACK THEY HAD RECEIVED FROM CONSUMERS

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COMPLAINING ABOUT BUZZ.

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GOOGLE

SO WE ACTUALLY GOT TO READ THROUGH ALL
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THE CONSUMER CONCERNS ABOUT BUZZ.

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DATABASE, WE CODED ALL OF THEM AND LOGGED THEM AND

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WE HAVE A SENSE OF WHAT THE CONSUMER CONCERNS WERE

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AND HOW THEY FARED.

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WE SET UP A

YOUR HONOR, THE SETTLEMENT TERMS

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THEMSELVES WERE DEVELOPED OR WRITTEN INTO THE

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SETTLEMENT AGREEMENT OVER THE SUMMER.

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THREE ESSENTIAL ASPECTS OF THE SETTLEMENT.

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THERE ARE

FIRST, THE SETTLEMENT RECOGNIZES THAT

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GOOGLE HAS MADE CHANGES TO THE PROGRAM SINCE IT WAS

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FIRST INSTITUTED IN FEBRUARY, THAT IT MADE THE

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PRIVACY OPTIONS MORE PALPABLE AND EASIER TO USE FOR

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USERS.

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PERHAPS MOST IMPORTANTLY, IN APRIL,

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SEVERAL MONTHS AFTER THE PROGRAM -- AFTER THE

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LAWSUIT WAS FILED, GOOGLE GAVE USERS A WHOLE SECOND

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CHANCE TO GO BACK AND RECHECK THEIR PRIVACY OPTIONS

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AND SEE IF THEY HAD BUZZ SET UP THE WAY THEY WANTED

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IT TO BE SET UP.

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SO THE SETTLEMENT RECOGNIZES THE CHANGES

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THAT HAVE BEEN MADE TO MAKE BUZZ MORE PRIVACY

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FRIENDLY.

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SECOND, GOOGLE AGREES IN THE SETTLEMENT

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TO UNDERTAKE A PUBLIC EDUCATION CAMPAIGN ABOUT THE

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PRIVACY ASPECTS OF BUZZ.

THE CONTENT OF THAT HAS
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YET TO BE DETERMINED, BUT IT WILL BE ROLLED OUT,

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AND AFTER GOOGLE -- AND WE HAVE THE OPPORTUNITY TO

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PROVIDE SUGGESTIONS TO THEM FOR THE PROGRAM.

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AFTER THEY DO THE PUBLIC EDUCATION

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PROGRAM ABOUT THE PRIVACY CONCERNS, THEY'LL REPORT

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BACK TO US ON WHAT IT WAS AND WE'LL GET TO

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SCRUTINIZE WHAT WAS DONE IN THAT PROGRAM.

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THIRD, PERHAPS MOST IMPORTANTLY, AGAIN,
THE THIRD ASPECT OF THE SETTLEMENT TERMS IS THAT

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GOOGLE HAS AGREED TO SET UP A FUND THAT ENCOMPASSES

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$8.5 MILLION.

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THE FUND WILL BE USED TO BE A CY PRES

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FUND WITH THE MONIES GOING TO GROUPS THAT DO

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INTERNET PRIVACY WORK AND PUBLIC POLICY WORK AROUND

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INTERNET PRIVACY.

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YOUR HONOR, WE SET UP THE CY PRES FUND

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BECAUSE THE AMOUNT OF MONEY, $8.5 MILLION, WHEN

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DIVIDED BY THE NUMBER OF CLASS MEMBERS -- WE THINK

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THERE ARE 30 MILLION GMAIL USERS IN THE

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UNITED STATES WHO WERE OFFERED THE OPPORTUNITY TO

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USE BUZZ -- THE AMOUNT OF MONEY PER GMAIL USER WAS

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NOT WORTH THE COST OF DISTRIBUTING TO THE GMAIL

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USERS IN THIS CIRCUMSTANCE.

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FURTHERMORE, OUR INFORMATION SHOWED WHEN
WE REVIEWED ALL THE COMPLAINTS THAT GOOGLE HAD
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RECEIVED, VERY FEW PEOPLE HAD ARTICULATED ACTUAL

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COMPENSATORY DAMAGES OR SUFFERED HARM FROM THE

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PRIVACY VIOLATIONS.

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THOSE WHO HAD RAISED CONCERNS HAD

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CONCERNS ABOUT THEIR PRIVACY BEING VIOLATED, BUT NO

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ONE HAS PARTICULAR STORIES WHERE THEY HAD

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COMPENSATORY DAMAGES RAISED.

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WE THINK THE MAJOR PORTION OF OUR DAMAGES
HERE ARE THE STATUTORY DAMAGES UNDER THE FEDERAL

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STATUTE, AND THE STATUTORY DAMAGES ARE MORE

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EXEMPLARY THAN COMPENSATORY.

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SO WE THINK IN THESE CIRCUMSTANCES A 100

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PERCENT CY PRES FUND IS APPROPRIATE AND IT'S A LOT

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OF MONEY FOR THE INTERNET PRIVACY GROUPS ONCE IT IS

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DISTRIBUTED TO THEM, AND WE THINK IT'S A GOOD WAY

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OF USING THIS MONEY BECAUSE IT WILL ENABLE MORE

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SCRUTINY ABOUT PRIVACY ON THE INTERNET, WHICH IS

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WHAT THIS CASE IS ALL ABOUT.

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FINALLY, YOUR HONOR, WE ASK THAT YOU

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CERTIFY A CLASS OF ALL GMAIL USERS WHO WERE OFFERED

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THE OPPORTUNITY TO USE BUZZ IN THE UNITED STATES.

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THE CLASS MEETS ALL THE REQUIREMENTS OF

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RULE 23(A).

IT'S NUMEROUS.

THERE ARE OVER 30

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MILLION PEOPLE IN THE CLASS, WE BELIEVE.

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COMMON LEGAL ISSUES, THE ONES WE'VE DESCRIBED, AND

THEY HAVE

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FACTUAL ISSUES.

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OUR CLASS REPRESENTATIVES HAVE CLAIMS

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THAT ARE TYPICAL OF ALL THE MEMBERS OF THE CLASS

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AND WE BELIEVE THEY'RE ADEQUATE REPRESENTATIVES OF

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THE CLASS IN GENERAL, AND WE'D ASK THAT THE CASE BE

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CERTIFIED UNDER 23(B)(3).

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THE COURT:

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MR. RUBENSTEIN:

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(B)(3)?
YES, YOUR HONOR.

IT'S

A -THE COURT:

I DIDN'T SEE THAT AS CLEARLY

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SPELLED OUT FOR ME.

I WAS THINKING THIS WAS MORE

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APPROPRIATELY A (B)(2) CLASS.

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IS THERE A REASON WHY (B)(3)?

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MR. RUBENSTEIN:

YES, YOUR HONOR.

WE

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WERE THINKING ABOUT THE SAME QUESTION IN THINKING

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ABOUT THIS.

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THERE ARE SEVERAL REASONS.

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COURSE, IN A (B)(1) AND (B)(2) CLASS, THOSE ARE

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NON-OPT OUT CLASSES.

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ONE IS, OF

ONE THING, BECAUSE OF THE CY PRES FUND,

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IS WE WANTED TO MAKE SURE THAT ANYONE WHO DID FEEL

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LIKE THEY HAVE PERSONAL DAMAGES COULD OPT OUT AND

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BRING THEIR OWN CASE IF THEY WANTED TO.

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SECOND, WE ARE ASKING FOR MONEY DAMAGES
AND WE ARE RECEIVING MONEY DAMAGES OF $8.5 MILLION.
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THE MONEY IS NOT GOING DIRECTLY TO THE

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CLASS MEMBERS, SO IT'LL BE TO A CY PRES.

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A MONEY DAMAGE CLASS ACTION.

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SO IT IS

THIRD, WE'RE NOT ASKING FOR INJUNCTIVE

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RELIEF UNDER (B)(2).

THERE'S NO ACTUAL INJUNCTION

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AGAINST GOOGLE ISSUING FROM THE CASE.

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AND, OF COURSE, WE --

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THE COURT:

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SO YOU'RE SATISFIED THAT

WHATEVER MODIFICATIONS THAT NEED TO BE MADE TO THE
BUZZ PROGRAM HAVE ALREADY BEEN MADE?

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MR. RUBENSTEIN:

WE'RE SATISFIED THAT THE

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COMBINATION OF THE CHANGES THAT HAVE BEEN MADE AND

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THE PUBLIC EDUCATION CAMPAIGN ABOUT THOSE CHANGES

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AND ABOUT THE PRIVACY ASPECTS OF BUZZ, PLUS THE

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MONIES THAT ARE GOING TO GO TO THE PRIVACY GROUPS

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ARE SUFFICIENT SETTLEMENT OF THE CLASS'S CLAIMS IN

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THIS CONTEXT, YES, YOUR HONOR.

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THE COURT:

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HYBRID.

SO THAT MAYBE THIS IS A

I JUST -- IT IS A STRANGE (B)(3) MAKEUP.
IS THERE -- AND THE REASON, THE PRIMARY

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REASON, THEN, AS I HEAR IT, FOR CERTIFYING IT UNDER

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(B)(3) IS TO PROVIDE FOR OPT OUTS.

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MR. RUBENSTEIN:

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THAT'S CORRECT, YOUR

HONOR, ALTHOUGH I ALSO WOULD SAY THIS.
WE TEND TO THINK OF THE (B)(3) CLASS
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ACTION AS A MONEY DAMAGE CLASS ACTION AS OPPOSED TO

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INJUNCTIVE CLASS ACTION OR A LIMITED FUND CASE.

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IF YOU ACTUALLY GO BACK AND READ THE TEXT

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OF (B)(3), IT DOESN'T USE THAT LANGUAGE.

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SAYS THAT THERE ARE CLAIMS IN THE CASE IN WHICH

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COMMON ISSUES PREDOMINATE OVER INDIVIDUAL ISSUES

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AND THE CLASS PROCEEDING WOULD BE SUPERIOR.

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ARE THE ONLY ACTUAL TECHNICAL REQUIREMENTS.

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THE COURT:

IT SIMPLY

THOSE

I DID THAT ACTUALLY WHEN I

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WAS THINKING ABOUT THIS.

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LANGUAGE, AND YOU'RE CORRECT.

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I WENT BACK TO THE

I SPENT MOST OF MY TIME READING THE NOTES

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BECAUSE THE CASE LAW IS PROBABLY FAR MORE

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INSTRUCTIVE AS TO THE DIFFERENCE BETWEEN THE TWO.

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I'M NOT -- LET ME ASK THIS.

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RESEARCH SUGGESTS THAT IF IT'S CERTIFIED UNDER

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(B)(2) WITHOUT OPT OUTS, THAT WOULD PRECLUDE, THEN,

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AN INDIVIDUAL CLASS MEMBER LATER WHO CLAIMS DAMAGES

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FROM BRINGING A CLAIM?

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MR. RUBENSTEIN:

YOUR LEGAL

I THINK IT WOULD, YOUR

HONOR, YES, ABSOLUTELY.
IF IT WAS A -- I UNDERSTAND GOOGLE WOULD

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HAVE THE OPPORTUNITY TO ARGUE THAT THOSE CLAIMS

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WERE PRECLUDED BY THE (B)(2) JUDGMENT.

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YOUR HONOR, I -15

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THE COURT:

AND THEN AS TO THE STATUTORY

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CLAIMS WITH THEIR STATUTORY DAMAGES, IT IS REALLY

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THE AMOUNT OF THE SETTLEMENT THAT MAKES IT SMALL,

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AS OPPOSED TO THE KINDS OF DAMAGES THAT ARE

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AVAILABLE UNDER THE STATUTES, STATUTORY DAMAGES.

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MR. RUBENSTEIN:

THAT'S CORRECT.

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THE STATUTORY DAMAGES, UNDER THE PRIMARY

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CLAIM, WHICH IS THE STORED COMMUNICATIONS ACT

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CLAIM, ARE $1,000 PER CLASS MEMBER.

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AGAIN, YOU KNOW, IN SETTLING THE CASE,

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OBVIOUSLY WE HAVEN'T RECEIVED THAT LEVEL OF MONEY

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FOR CLASS MEMBERS.

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AND IT IS A SETTLEMENT, SO IT IS A SMALL

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CLAIM SETTLEMENT IN THAT REGARD, THAT'S CORRECT.

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YOUR HONOR, I WRITE ABOUT CLASS ACTION

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LAW.

THIS IS WHAT I DO.

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ACTIONS AND WRITE ABOUT CLASS ACTION LAW, AND I HAD

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THE SAME KIND OF REACTION TO THINKING ABOUT

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CERTIFYING THIS CLASS AS YOU HAVE.

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I EDIT NEWBERG ON CLASS

BUT THE MORE I THOUGHT ABOUT IT, I DID

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THINK (B)(1) AND (B)(2) WERE INAPPROPRIATE VEHICLES

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BECAUSE OF THE NON-OPT OUT.

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AND I DO THINK, ALTHOUGH ALL THE MONEY IS

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GOING TO CY PRES, THIS IS A MONEY DAMAGE CLASS

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ACTION.

WE'RE DEFINITELY SECURING $8.5 MILLION OF
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DISGORGEMENT FROM GOOGLE AND I THINK (B)(3) IS THE

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PROPER CATEGORY TO PUT THE CASE INTO FOR THOSE

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PURPOSES.

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THE COURT:

WHAT DOES YOUR CHAPTER ON CY

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PRES SAY WHEN THERE'S NO NAMED DAMAGES, IT'S ALL CY

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PRES?

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CY PRES IS WHAT I USED TO UNDERSTAND TO

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BE AS SORT OF THE LEFT OVER.

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PART.

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MR. RUBENSTEIN:

THIS IS LIKE THE MAIN

THAT'S CORRECT.

THAT'S

CORRECT.
IT'S AN ODD SETTLEMENT IN THAT REGARD.
WE FOUND OTHER PRECEDENTS FOR IT.

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FOR US IT'S A COMBINATION OF TWO FACTORS.

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WE'D LOVE TO GET MONEY TO THE CLASS, OBVIOUSLY, BUT

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THE AMOUNT OF MONEY THAT'S AVAILABLE AND NUMBER OF

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CLASS MEMBERS MAKES IT IMPLAUSIBLE.

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WHAT GIVES US, I THINK, COMFORT IN THE

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100 PERCENT CY PRES IS TWO THINGS.

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MEMBERS HAVE BEEN ABLE TO ARTICULATE ACTUAL DAMAGES

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THEMSELVES, THEIR DAMAGES ARE STATUTORY, AND THE

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PURPOSE OF STATUTORY DAMAGES IS TO DETER, NOT SO

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MUCH -- AND TO ENABLE LITIGATION, NOT SO MUCH TO

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PUT THE MONEY IN THE HANDS OF PARTICULAR PEOPLE.

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NO CLASS

STATUTORY DAMAGES ARE EXEMPLARY TO
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ENCOURAGE PEOPLE TO PURSUE LITIGATION AND THE CLASS

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ACTION HAS SERVED THAT FUNCTION HERE.

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AND SECOND, WE ACTUALLY THINK THE MONEY,

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IF YOU TAKE ALL THIS MONEY AND YOU SPREAD IT OVER

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30 MILLION PEOPLE, EVERYONE GOES HOME WITH A

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QUARTER AND NOTHING HAPPENS.

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BUT IF YOU GIVE THE MONEY TO INTERNET

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PRIVACY ORGANIZATIONS AS WE'RE PROPOSING, I

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ACTUALLY THINK IT IS A BETTER USE OF THE MONEY FROM

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A PUBLIC POLICY --

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THE COURT:

THAT'S NOT MY CONCERN.

I

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ACTUALLY THINK THAT'S WELL THOUGHT OUT.

IT JUST

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SEEMS TO ME THAT I WORRY ABOUT THE PRECEDENT SET BY

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THE COURT IN CERTIFYING THIS UNDER (B)(3) UNDER

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THESE CIRCUMSTANCES, AND I -- I WILL -- I'LL

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PRELIMINARILY APPROVE IT BECAUSE THAT WOULD STILL

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GIVE ME TIME TO THINK ABOUT IT AND SEE WHAT HAPPENS

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IN THE PROCESS BEFORE I HAVE TO FINALLY TAKE

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ACTION.

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BUT THANK YOU FOR YOUR PRESENTATION.

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MR. RUBENSTEIN:

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WE DO THINK THAT UNDER OTHER

THANK YOU, YOUR HONOR.

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CIRCUMSTANCES, 100 PERCENT CY PRES MAY NOT BE

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APPROPRIATE, BUT WE FEEL WE'LL BE ABLE TO SHOW YOU

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AT THE FINAL APPROVAL THAT THIS IS ONE OF THEM IN
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1

WHICH IT IS.

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THE COURT:

THANK YOU, COUNSEL.

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MR. RUBENSTEIN:

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THE COURT:

COUNSEL.

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MR. MASON:

YOUR HONOR, I WANTED TO

THANK YOU, SIR.

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ADDRESS THE COURT ON THE NOTICE PROGRAM WHICH WE'RE

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ASKING THE COURT TO APPROVE TODAY AND JUST DISCUSS

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SOME FEATURES OF THE PRELIMINARY APPROVAL ORDER

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THAT WE WOULD LIKE YOU TO ENTER TODAY.

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THE COURT:

ALL RIGHT, QUICKLY.

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MR. MASON:

VERY QUICKLY.

WE HAVE AN

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EXTENSIVE NOTICE PROGRAM PLANNED, YOUR HONOR.

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BASICALLY E-MAIL NOTIFICATION TO UPWARDS OF

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MILLIONS, TENS OF MILLIONS OF INDIVIDUALS.

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DESIGNED TO GET TO A VERY HIGH PERCENTAGE OF THE

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CLASS.

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WEBSITE AND A JOINT PRESS RELEASE.

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IT'S

IT'S

THAT'S GOING TO BE SUPPLEMENTED BY A

WE'VE SUBMITTED THE NOTICE TO THE COURT.

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IT HAS -- IT MEETS ALL THE REQUIREMENTS OF DUE

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PROCESS BY SETTING FORTH THE TERMS OF THE

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SETTLEMENT, THE CLASS MEMBERS' RIGHTS, ET CETERA,

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ALL CONSISTENT WITH THE MANUAL FOR COMPLEX

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LITIGATION.

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YOUR HONOR, THE AMENDED --

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THE COURT:

DO I HAVE A COPY OF THE
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1
2

NOTICE ITSELF?
MR. MASON:

YES.

IT'S AN EXHIBIT TO OUR

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PRELIMINARY -- OUR MEMORANDUM IN SUPPORT OF

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PRELIMINARY APPROVAL.

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DO YOU HAVE THAT?

DO YOU KNOW WHAT

EXHIBIT THAT IS?

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MR. RUBENSTEIN:

B.

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THE COURT:

EXHIBIT B.

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MR. MASON:

AND WE'RE DOING SOME EDITING

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TO IT, SOME SLIGHT EDITING TO IT, BUT NOTHING

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SUBSTANTIVE, AS WE'RE WORKING WITH OUR NOTICE

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PROVIDER, THE GARDEN CITY GROUP.

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BUT I CAN ASSURE YOUR HONOR THAT IT

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COVERS THE LITIGATION HISTORY, THE TERMS OF THE

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SETTLEMENT AGREEMENT, THE BINDING EFFECT OF THE

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SETTLEMENT, THE RIGHT TO OPT OUT, THE RIGHT TO

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OBJECT, WHOM TO CONTACT FOR ADDITIONAL INFORMATION.

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IT SETS FORTH THAT WE'RE SEEKING

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ATTORNEYS' FEES OF 25 PERCENT AND WE WILL BE

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SEEKING AN INCENTIVE FEE FOR THE CLASS

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REPRESENTATIVE OF $2500.

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ONE FEATURE THAT WE ADDED, YOUR HONOR, IN

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LIGHT OF THE RECENT MERCURY INTERACTIVE CASE, THE

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NINTH CIRCUIT COURT OF APPEALS CASE, WE WANTED TO

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BE VERY SPECIFIC IN HERE, AND THIS IS WHAT WE ADDED
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IN THE AMENDED NOTICE, THAT THE DEADLINE FOR

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OBJECTIONS WILL BE TWO WEEKS AFTER THE DEADLINE FOR

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FILING OUR APPLICATION FOR ATTORNEYS' FEES.

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UNDER THE NINTH CIRCUIT PRECEDENT NOW,

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WHICH RECENTLY CAME OUT AT THE END OF AUGUST,

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THAT'S REQUIRED.

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THERE'S NO SET GUIDELINES, YOU KNOW, HOW

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FAR IN ADVANCE.

WE THOUGHT 14 DAYS IN ADVANCE

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WOULD BE SUFFICIENT FOR OBJECTORS TO REVIEW OUR

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APPLICATION AND FOR -- IF ANYONE IS GOING TO OBJECT

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TO OUR APPLICATION FOR ATTORNEYS' FEES AND FOR

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INCENTIVE AWARD, THEY'LL HAVE SUFFICIENT TIME TO DO

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SO.

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AND LASTLY, YOUR HONOR, BY OUR

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CALCULATION, WE WOULD PROPOSE, IF THE COURT HAS THE

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DATE AVAILABLE, MONDAY, DECEMBER 20TH AS A DATE FOR

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THE FAIRNESS HEARING, OR LATER INTO JANUARY.

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AND THE REASON WE SAY THAT IS AS FOLLOWS:

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FIRST OF ALL, YOUR HONOR, THE CAFA NOTICE -- EXCUSE

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ME -- THE CAFA NOTICE IS WELL UNDER WAY, SO THAT'S

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NOT AN ISSUE.

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BE -- WILL HAVE EXPIRED WELL IN ADVANCE OF THE DATE

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IN DECEMBER .

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THE 90 DAYS REQUIRED BY CAFA WILL

MORE IMPORTANTLY ARE THE DEADLINES FOR
OBJECTIONS AND FOR FILING EXCLUSIONS, WHICH
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1

ACCORDING TO THE SETTLEMENT AGREEMENT IS 60 DAYS

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FROM WHEN THE NOTICE GOES OUT.

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WE ANTICIPATE THAT WE WILL BE ABLE TO

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DISSEMINATE NOTICE AND -- WITHIN TWO WEEKS, AND SO

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WE CAN'T HAVE THE HEARING ANY SOONER THAN 60 DAYS

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AFTER THAT, WHICH WILL BRING US INTO EARLY

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DECEMBER.

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SO --

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THE COURT:

WELL, YOU KNOW, MY STAFF PUT

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TOGETHER SOME DATES AND MAYBE THEY SHOULD GO OVER

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THEM WITH YOU BEFORE YOU LEAVE TODAY.

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MR. MASON:

SURE.

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THE COURT:

BECAUSE THE DATES THEY HAD

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TAKES YOU INTO JANUARY, TOWARD THE END OF THE

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JANUARY FOR THE FAIRNESS HEARING.

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BUT IT COULD BE THAT YOU KNOW THINGS

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ABOUT THE SPEED AT WHICH YOU CAN DO THINGS THAT

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WOULD AFFECT THE COURT'S DATES.

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SO WHY DON'T YOU STAND BY FOR A LITTLE

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BIT AFTER THE CLOSE OF THE --

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MR. MASON:

SURE.

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THE COURT:

-- CALENDAR AND REVIEW THOSE.

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MR. MASON:

WHAT THEY MAY NOT HAVE

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ANTICIPATED IS THAT THE CAFA NOTICE HAS ALREADY

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GONE OUT.

THAT'S A 90-DAY PERIOD.
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1

THE COURT:

THAT'S A POTENTIAL.

2

MR. MASON:

THANK YOU, YOUR HONOR.

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THE COURT:

ALL RIGHT.

4
5

SO DOES GOOGLE'S

COUNSEL WANT TO SPEAK TO THIS ISSUE?
MS. FAHRINGER:

THIS MOTION IS MADE WITH

6

THE SUPPORT OF GOOGLE, AND WE DON'T NECESSARILY

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AGREE WITH THE FACTUAL RECITATIONS AND THE

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ALLEGATIONS MADE BY THE PLAINTIFFS OBVIOUSLY, BUT

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WE DO -- WE DO BELIEVE THAT THE SETTLEMENT SHOULD

10
11

BE PRELIMINARILY APPROVED TODAY.
THE COURT:

ALL RIGHT.

AND I'M NOT BEING

12

ASKED TO DO ANYTHING TO REQUIRE THAT YOU CONDUCT

13

YOURSELF IN ANY PARTICULAR WAY, BUT IT DOES SOUND

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AS THOUGH THIS EDUCATION PROGRAM THAT YOU'RE GOING

15

TO UNDERTAKE AS A PART OF THIS IS DESIGNED TO

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EDUCATE YOURSELF AND THE PUBLIC AS TO HOW TO AVOID

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THESE KINDS OF CIRCUMSTANCES.

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MS. FAHRINGER:

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THE COURT:

CERTAINLY SO, YOUR HONOR.

I GUESS THAT'S THE ONLY OTHER

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ASPECT OF THIS THAT WORRIES ME IS I'VE HAD SEVERAL

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INSTANCES WHERE I'VE APPROVED EDUCATIONAL PROGRAMS

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AND WHAT IT TURNED INTO WAS CIRCUMSTANCES WHERE THE

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PLAINTIFF SIMPLY EXPLAINED THAT THEY HAD DONE

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NOTHING WRONG, AND SO THE EDUCATION DIDN'T WORK

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QUITE THE WAY I THOUGHT IT SHOULD.
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1

SO -- BUT WITH A PROFESSOR ON THE OTHER

2

SIDE, MAYBE A CURRICULUM WILL BE ESTABLISHED HERE

3

THAT WILL BE BENEFICIAL TO THE PUBLIC.

4
5

VERY WELL.

THE COURT WILL ISSUE AN ORDER

PRELIMINARILY APPROVING THIS SETTLEMENT.

6

THANK YOU ALL.

7

MR. MASON:

8

MR. RUBENSTEIN:

9

MS. FAHRINGER:

THANK YOU, YOUR HONOR.
THANK YOU, YOUR HONOR.
THANK YOU, YOUR HONOR.

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THE COURT:

BUT STAND BY TO TALK WITH MY

11

STAFF FOR THE DATES.

IN FACT, SOMEBODY MIGHT TALK

12

TO YOU NOW SO YOU DON'T HAVE TO STAND BY TOO LONG.

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14

(WHEREUPON, THE PROCEEDINGS IN THIS
MATTER WERE CONCLUDED.)

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CERTIFICATE OF REPORTER

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I, THE UNDERSIGNED OFFICIAL COURT
REPORTER OF THE UNITED STATES DISTRICT COURT FOR

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THE NORTHERN DISTRICT OF CALIFORNIA, 280 SOUTH

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FIRST STREET, SAN JOSE, CALIFORNIA, DO HEREBY

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CERTIFY:

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THAT THE FOREGOING TRANSCRIPT,

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CERTIFICATE INCLUSIVE, CONSTITUTES A TRUE, FULL AND

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CORRECT TRANSCRIPT OF MY SHORTHAND NOTES TAKEN AS

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SUCH OFFICIAL COURT REPORTER OF THE PROCEEDINGS

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HEREINBEFORE ENTITLED AND REDUCED BY COMPUTER-AIDED

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TRANSCRIPTION TO THE BEST OF MY ABILITY.

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/S/
_____________________________
LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595

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