Campbell et al v. Facebook Inc.

Filing 237

Motion and [Proposed] Order for Final Approval of Class Action Settlement filed by Matthew Campbell, Michael Hurley. Motion Hearing set for 8/9/2017 09:00 AM in Courtroom 3, 3rd Floor, Oakland before Hon. Phyllis J. Hamilton. Responses due by 6/26/2017. Replies due by 7/10/2017. (Attachments: # 1 Declaration of Hank Bates and Michael Sobol, and Exhibits 1-2, # 2 Proposed Order)(Sobol, Michael) (Filed on 5/26/2017) Modified on 5/30/2017 (cjlS, COURT STAFF).

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Michael W. Sobol (State Bar No. 194857)
[e-mail]
David T. Rudolph (State Bar No. 233457)
[e-mail]
Melissa Gardner (State Bar No. 289096)
[e-mail]
LIEFF CABRASER HEIMANN & BERNSTEIN, LLP
275 Battery Street, 29th Floor
San Francisco, CA 94111-3339
Telephone: [phone]
Facsimile: 415.956.1008
Rachel Geman
[e-mail]
Nicholas Diamand
[e-mail]
LIEFF CABRASER HEIMANN & BERNSTEIN, LLP
250 Hudson Street, 8th Floor
New York, NY 10013-1413
Telephone: [phone]
Facsimile: 212.355.9592

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Hank Bates (State Bar No. 167688)
[e-mail]
Allen Carney
[e-mail]
David Slade
[e-mail]
CARNEY BATES & PULLIAM, PLLC
519 West 7th Street
Little Rock, AR 72201
Telephone: [phone]
Facsimile: 501.312.8505

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Attorneys for Plaintiffs and the Class

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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MATTHEW CAMPBELL, MICHAEL
HURLEY, on behalf of themselves and all
others similarly situated,

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Plaintiffs,
v.

Case No. 4:13-cv-05996-PJH
PLAINTIFFS’ NOTICE OF MOTION AND
MOTION AND MEMORANDUM OF
POINTS AND AUTHORITIES IN
SUPPORT OF MOTION FOR FINAL
APPROVAL OF CLASS ACTION
SETTLEMENT

FACEBOOK, INC.,
Defendant.

Date: August 9, 2017
Time: 9:00am
Judge: Hon. Phyllis J. Hamilton
Place: Courtroom 3, 3rd Floor

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

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TABLE OF CONTENTS

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Page
I.
II.

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III.

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IV.

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V.

INTRODUCTION .............................................................................................................. 1
BACKGROUND ................................................................................................................ 1
A.
Plaintiffs’ Claims and Facebook’s Motion to Dismiss ........................................... 1
B.
Discovery and Class Certification........................................................................... 2
C.
Settlement Negotiations and the Settlement Agreement ......................................... 3
THE SETTLEMENT .......................................................................................................... 4
A.
The Settlement Terms ............................................................................................. 4
1.
Cessation of the Three URL Uses Relevant to this Class Action ............... 4
2.
The Release ................................................................................................. 5
3.
Attorneys’ Fees ........................................................................................... 6
B.
Notice ...................................................................................................................... 6
THE COURT SHOULD GRANT FINAL APPROVAL OF THE SETTLEMENT
AS FAIR, REASONABLE AND ADEQUATE................................................................. 6
A.
The Strength of Plaintiffs’ Case Balanced Against the Risk, Expense,
Complexity, and Likely Duration of Further Litigation ......................................... 7
B.
The Risk of Maintaining Class Action Status Throughout Trial ............................ 8
C.
The Benefits Offered in Settlement......................................................................... 9
D.
Extent of Discovery and Stage of Proceedings ....................................................... 9
E.
The Experience and View of Counsel................................................................... 10
F.
The Presence of a Governmental Participant ........................................................ 10
G.
Lack of Collusion Between the Parties ................................................................. 10
CONCLUSION ................................................................................................................. 11

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TABLE OF AUTHORITIES

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Page

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Cases

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Acosta v. Trans Union, LLC,
243 F.R.D. 377 (C.D. Cal. 2007) ................................................................................................. 9
Ching v. Siemens Indus., Inc.,
No. 11-4838-MEJ, 2014 U.S. Dist. LEXIS 89002 (N.D. Cal. June 27, 2014) .......................... 10
Churchill Village, LLC v. Gen. Elec.,
361 F.3d 566 (9th Cir. 2004)........................................................................................................ 6
Class Plaintiffs v. City of Seattle,
955 F.2d 1268 (9th Cir. 1992).................................................................................................... 10
Gen. Tel. Co. of Sw v. Falcon,
457 U.S. 147 (1982) ..................................................................................................................... 8
Hanlon v. Chrysler Corp.,
150 F.3d 1011 (9th Cir. 1997)...................................................................................................... 7
In re Heritage Bond Litig.,
2005 U.S. Dist. LEXIS 13555 (C.D. Cal. June 10, 2005) ......................................................... 11
In re Immune Response Sec. Litig.,
497 F. Supp. 2d 1166 (S.D. Cal. 2007) ...................................................................................... 11
In re Pacific Enters. Sec. Litig.,
47 F.3d 373 (9th Cir. 1995)........................................................................................................ 10
In re Yahoo Mail Litig.,
No. 13-CV-4980-LHK, 2016 U.S. Dist. LEXIS 115056 (N.D. Cal. Aug. 25, 2016) .................. 8
Martin v. Global Tel*Link Corp.,
2017 U.S. Dist. LEXIS 53899 (C.D. Cal. Apr. 7, 2017).............................................................. 9
Moore v. PetSmart, Inc.,
2015 U.S. Dist. LEXIS 102804 (N.D. Cal. Aug. 4, 2015) ....................................................... 7, 9
Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc.,
221 F.R.D. 523 (C.D. Cal. 2004) ................................................................................................. 8
Nat’l Rural Telecommunications Coop. v. DIRECTV, Inc.,
221 F.R.D. 523 (C.D. Cal. 2004) ....................................................................................... 8, 9, 10
Officers for Justice v. Civil Serv. Comm’n of City & Cty. of San Francisco,
688 F.2d 615 (9th Cir. 1982).................................................................................................... 6, 7
Rodriguez v. West Publ’g Corp.,
563 F.3d 948 (9th Cir. 2009).................................................................................................. 8, 10
Satchell v. Federal Express Corp.,
No. C 03-2659 SI, 2007 U.S. Dist. LEXIS 99066 (N.D. Cal. Apr. 13, 2007) ........................... 11
Shadpour v. Facebook, Inc.,
Case No. 5:14-cv-00307-PSG (N.D. Cal.) ................................................................................... 1
Staton v. Boeing Co.,
327 F.3d 938 (9th Cir. 2003)........................................................................................................ 7

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MOTION FOR FINAL APPROVAL OF
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TABLE OF AUTHORITIES
(continued)

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Page

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Rules
Fed. R. Civ. P. 23(b)(2) .................................................................................................................... 2
Fed. R. Civ. P. 23(b)(3) .................................................................................................................... 2
Fed. R. Civ. P. 23(e)......................................................................................................................... 1
Fed. R. Civ. P. 41(a)......................................................................................................................... 2
Treatises
4 Alba Conte & Herbert B. Newberg on Class Actions §11.50 (4th ed. 2002) ............................... 8
4 Newberg § 11.41 ......................................................................................................................... 11

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

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NOTICE OF MOTION
TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
PLEASE TAKE NOTICE that on August 9, 2017, at 9:00 a.m., in the Courtroom of the

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Honorable Phyllis J. Hamilton (Courtroom 3), United States District Judge for the Northern

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District of California, Courtroom 3, 1301 Clay Street, Oakland, California, 94612, Plaintiffs and

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Class Counsel1 in the above-captioned matter will and hereby do move the Court pursuant to

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Federal Rule of Civil Procedure 23 for an Order granting final approval of the Class Action

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Settlement Agreement (“Settlement”) and entering final Judgment in this matter.
Plaintiffs’ motion is based on this Notice of Motion and Motion, the Memorandum of

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Points and Authorities below, the Declaration of Class Counsel filed herewith, the papers filed in

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support of Plaintiffs’ motion for preliminary settlement approval, the papers filed in support of

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Class Counsel’s application for attorneys’ fees, the record in this case, and any additional

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argument and evidence the Court may consider.

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Dated: May 26, 2017

By:

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/s/ Hank Bates

CARNEY BATES & PULLIAM, PLLC
Hank Bates (CA #167688)
[e-mail]
Allen Carney
[e-mail]
David Slade
[e-mail]
519 West 7th St.
Little Rock, AR 72201
Telephone: [phone]
Facsimile: [phone]

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“Class Counsel” are the firms appointed as Class Counsel pursuant to the Court’s order preliminarily approving the
proposed Settlement (the “Preliminary Approval Order”): Lieff Cabraser Heimann & Bernstein LLP and Carney
Bates & Pulliam, PLLC. (See Dkt. 235 at 5).

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

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Michael W. Sobol (CA #194857)
[e-mail]
David T. Rudolph
[e-mail]
Melissa Gardner
[e-mail]
LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP
275 Battery Street, 29th Floor
San Francisco, CA 94111-339
Telephone: [phone]
Facsimile: 415.956.1008

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Rachel Geman
[e-mail]
Nicholas Diamond
[e-mail]
LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP
250 Hudson Street, 8th Floor
New York, NY 10013-1413
Telephone: [phone]
Facsimile: 212.355.9592

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Class Counsel

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MOTION FOR FINAL APPROVAL OF
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CASE NO. 4:13-CV-05996-PJH

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MEMORANDUM OF POINTS AND AUTHORITIES
I.

INTRODUCTION
Pursuant to Rule 23(e) of the Federal Rules of Civil Procedure (“FRCP”) and the Court’s

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Preliminary Approval Order, Plaintiffs Matthew Campbell and Michael Hurley (“Plaintiffs”)

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respectfully request that the Court grant final approval of the settlement (the “Settlement”)

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reached between Plaintiffs and Defendant Facebook, Inc.
At the preliminary approval stage, this Court reviewed the parties’ Settlement and found

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that certification of the Settlement Class was appropriate for settlement purposes and “the

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Settlement Agreement is fair, reasonable, adequate, and in the best interest of the Settlement

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Class.” See Dkt. 235 at 3. As demonstrated herein, consideration of the appropriate factors

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strongly weighs in favor of final approval of the Settlement. Consequently, the Court should grant

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Plaintiffs’ Motion for Final Approval.

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II.

BACKGROUND

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A.

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Plaintiffs, on behalf of themselves and those similarly situated, commenced this action

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(the “Action”) on December 30, 2013. In their initial complaint, Plaintiffs asserted claims for

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violations of the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510 et seq. (“ECPA”);

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the California Invasion of Privacy Act, Cal. Penal Code §§ 630 et seq. (“CIPA”); and California’s

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Unfair Competition Law California Business and Profession Code §§ 17200 et seq. (“UCL”).

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Plaintiffs alleged that Facebook, as a routine policy and business practice, captured and reads

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URL Content in its users’ personal, private Facebook messages without their consent for purposes

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including, but not limited to, data mining, user profiling and generating ‘Likes’ for web pages.

Plaintiffs’ Claims and Facebook’s Motion to Dismiss

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On January 21, 2014, David Shadpour filed a related action (referred to collectively with

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this Action as the “Related Actions”), which alleged similar facts and averred identical causes of

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action against Facebook (see Shadpour v. Facebook, Inc., No. 5:14-cv-00307-PSG (N.D. Cal.),

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Dkt. 1).

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On April 15, 2014, the Court entered an order granting Plaintiffs’ Motion to Consolidate
the Related Actions and consolidating the Related Actions for all purposes. (See Dkt. 24).
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Following entry of the Court’s consolidation order, the Class Representatives filed a Consolidated

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Amended Complaint on April 25, 2014, asserting ECPA, CIPA, and UCL claims on behalf of

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themselves and a proposed class of “[a]ll natural-person Facebook users located within the United

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States who have sent or received private messages that included URLs in their content, from

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within two years before the filing of this action up through and including the date when Facebook

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ceased its practice.” (See Dkt. 25).1

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On June 17, 2014, Facebook filed a Motion to Dismiss Plaintiffs’ Consolidated Amended

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Complaint. (See Dkt. 29). Plaintiffs filed an opposition (see Dkt. 31), and Facebook, in turn,

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filed a reply brief (see Dkt. 35). On December 23, 2014, the Court issued an order granting in

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part and denying in part Facebook’s Motion to Dismiss Plaintiffs’ Consolidated Amended

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Complaint, dismissing the claims under CIPA § 632 and the UCL, but denying dismissal of the

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claims under ECPA and CIPA § 631. (See Dkt. 43).

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B.

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Following entry of the Court’s order granting in part and denying in part Facebook’s

Discovery and Class Certification

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motion to dismiss the Consolidated Amended Complaint, the parties engaged in almost two years

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of extensive discovery, including the production of tens of thousands of pages of documents, fact

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and expert depositions of 18 witnesses (spanning 19 days of testimony), informal conferences and

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discussions, hundreds of hours reviewing detailed technical documentation, substantial discovery

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motion practice and the exchange of hundreds of pages of written discovery requests and

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responses.

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During the discovery phase, Plaintiffs filed a Motion for Class Certification. (See Dkt.

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138). Defendants filed an opposition (see Dkt. 147-4), and Plaintiffs, in turn, filed a reply brief

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(see Dkt. 167). On May 18, 2016, the Court issued on order granting in part and denying in part

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Plaintiffs’ Motion for Class Certification, denying certification as to a damages class under

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Federal Rule of Civil Procedure 23(b)(3), but granting certification of an injunctive-relief class

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under Federal Rule of Civil Procedure 23(b)(2). (See Dkt. 192). Specifically, the Court certified

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On October 2, 2015, David Shadpour voluntarily dismissed his claims, with prejudice, pursuant to Federal Rule of
Civil Procedure 41(a). (See Dkt. 123).

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CASE NO. 4:13-CV-05996-PJH

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for class treatment three specific alleged uses by Facebook of URLs included in private messages:

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(1) Facebook’s cataloging URLs shared in private messages and counting them as a “like” on the

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relevant third-party website, (2) Facebook’s use of data regarding URLs shared in private

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messages to generate recommendations for Facebook users, and (3) Facebook’s sharing of data

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regarding URLs in messages (and attendant demographic data about the messages’ participants)

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with third parties. (Dkt. 192 at 3-5). In addition, the Court directed the Plaintiffs to file a Second

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Amended Complaint “(1) revising the class definition to reflect the definition set forth in the class

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certification motion, and (2) adding allegations regarding the sharing of data with third parties.”

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(Id. at 6). In accord therewith, the Plaintiffs filed their Second Amended Complaint on June 7,

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2016. (Dkt. 196.)
Subsequent to the filing of Plaintiffs’ Second Amended Complaint, discovery in this

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Action continued.

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C.

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The parties’ first mediation occurred on August 19, 2015, which involved a full-day

Settlement Negotiations and the Settlement Agreement

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mediation before Cathy Yanni of JAMS. While the parties made strides at this mediation, they

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were unable to reach an agreement to resolve this Action.

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Following entry of the Court’s Class Certification Order, the parties revisited the

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possibility of settlement, agreeing to a second mediation. As such, the parties attended a second

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mediation session before Cathy Yanni of JAMS on July 21, 2016. While not yielding a resolution

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to the Action, the parties agreed to come back for a third mediation session, which occurred on

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July 28, 2016. Although this third mediation was also unsuccessful, the parties made significant

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progress and narrowed the issues of dispute. For months following the parties’ third mediation

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session, as discovery continued, the parties also continued to negotiate informally. Eventually, on

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November 22, 2016, just eight days from the close of fact discovery, the parties notified the Court

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that they had agreed to attend a fourth mediation, which took place on December 7, 2016 before

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Randall Wulff.

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As a result of these cumulative efforts, the parties were able to reach an agreement-inprinciple to resolve this Action, and on December 23, 2016, the parties filed a Joint Status Report,
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MOTION FOR FINAL APPROVAL OF
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advising the Court that they had reached a settlement-in-principle. (See Dkt. 222). Thereafter,

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the parties worked diligently to memorialize the terms of the settlement in a comprehensive

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Settlement Agreement, which was executed by all parties on March 1, 2017 and filed with the

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Court on that same date. (See Dkt. 227-3.)

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III.

THE SETTLEMENT

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A.

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As originally detailed in Plaintiffs’ Motion for Preliminary Approval of Class Action

The Settlement Terms

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Settlement (Dkt. 227), the Settlement achieves significant changes to Facebook’s practices related

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to the use of URLs in private messages that address each of the three practices certified for class

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treatment by the Court and challenged in the Second Amended Complaint:

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1.

The Settlement Agreement confirms that Facebook has ceased the following uses of data
from EntShares created from URLs sent in Facebook private messages:
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“Like” Count Increment. From the beginning of the Class Period until on or
about December 19, 2012, Facebook source code was engineered so that when an
anonymous, aggregate count was displayed next to a “Like” button on a third-party
web page, that count often included, inter alia, the number of times a URL related
to that particular website had been shared by Facebook users in Facebook
Messages and resulted in creation of an EntShare. On or about December 19, 2012,
Facebook changed its source code such that the external count no longer included
the number of shares, by users, of URLs in private messages that resulted in
creation of EntShares. (Settlement Agreement at ¶ 40(a)(i));

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Sharing of URL Data with Third Parties. Facebook makes its “Insights” user
interface and related API available to owners of third-party websites that choose to
include Facebook tools or features, for purposes of providing anonymous,
aggregate data about interaction with and traffic to their websites. During certain
periods of time during the Class Period, this information included anonymous,
aggregate statistics and demographic information about users who shared links to
those sites across the Facebook platform. From the beginning of the Class Period
until on or about October 11, 2012, these statistics and demographic information
included information about users who shared URLs in Facebook Messages that
resulted in creation of EntShares. On or about October 11, 2012, Facebook
changed its source code such that it ceased including information about URL
shares in Facebook Messages that resulted in creation of EntShares (and attendant
statistics and demographic information) within Insights and its related API.
(Settlement Agreement ¶ 40(a)(ii));

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Use of URL Data to Generate Recommendations. Facebook’s
Recommendations Feed was a social plugin offered to developers that displayed a
list of URLs representing the most recommended webpages on that developer’s
site. Over time, two different units of Facebook source code determined the list of

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Cessation of the Three URL Uses Relevant to this Class Action

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URLs that would appear in the Recommendations Feed for a given webpage at a
given time. One of those units of Facebook source code was the “PHP backend.”
Although, during the Class Period, the PHP backend was not the primary system
determining the list of URLs that would appear in the Recommendations Feed, the
PHP backend served as a backup system if the primary system failed. The PHP
backend considered, inter alia, an anonymous, aggregate count of, inter alia, the
number of times a URL had been shared in a Facebook Message and resulted in
creation of an EntShare. On or about July 9, 2014, Facebook changed its code such
that it ceased utilizing the PHP backend as the backup system for its
Recommendations Feed. (Settlement Agreement ¶ 40(a)(iii));

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Use of EntShares created from URLs in Messages. In addition, Facebook
confirms that, as of the date of execution of the Settlement Agreement, it is not
using any data from EntShares created from URL attachments sent by users in
Facebook Messages for: 1) targeted advertising; 2) sharing personally identifying
user information with third parties; 3) use in any public counters in the “link_stats”
and Graph APIs; and 4) displaying lists of URLs representing the most
recommended webpages on a particular web site. (Settlement Agreement ¶ 40(b));

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Disclosure Changes. Facebook implemented enhanced disclosures after the filing
of this Action that benefited the Class. Specific to the private message function, in
January 2015, Facebook revised its Data Policy to disclose that Facebook collects
the “content and other information” that people provide when they “message or
communicate with others,” and to further explain the ways in which Facebook may
use that content. (Settlement Agreement ¶ 40(c)). Facebook has taken the position
that these changes—implemented during the course of this litigation—were
significant and transparent enough to establish consent to the practices complained
of in this action (or at minimum neutralize any further suggestion that Facebook
users were not aware of the practices complained of in this action).

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Moreover, as part of the Settlement, Facebook shall also display the following additional
language, without material variation, on its United States website for Help Center materials
concerning messages within 30 days of the Effective Date: “We use tools to identify and store
links shared in messages, including a count of the number of times links are shared.” This
additional language shall be available on its United States website for a period of one year from
the date it is posted, provided however that Facebook may update the disclosures to ensure
accuracy with ongoing product changes. (Settlement Agreement ¶ 40(d)).

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2.
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The Release

In exchange for the foregoing consideration, Plaintiffs and the Settlement Class Members
will release all claims which have been or could have been asserted against Facebook in this
Action, with the express caveat that the release extends solely to claims for declaratory, injunctive,
and non-monetary equitable relief. Thus, no member of the Settlement Class, with the exception

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of the Plaintiffs, will be releasing his or her claim for monetary damages or relief under CIPA,

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ECPA or any other cause of action. (Settlement Agreement ¶¶ 44-55).

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3.

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Attorneys’ Fees

Facebook has agreed not to take a position on an application by Class Counsel for an

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award of $3,890,000 in attorneys’ fees and expenses (which represents a negative lodestar

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multiplier), and for service awards in the amount of $5,000 to each of the Plaintiffs serving as a

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Class Representative. (Settlement Agreement ¶¶ 57 and 60).

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B.

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In accord with the Settlement Agreement and the Preliminary Approval Order, Facebook

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served notice of the Settlement, in a form and manner that comports with the requirements of 28

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U.S.C. § 1715, on appropriate federal and state officials. (Settlement Agreement ¶ 56). In

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addition, consistent with this Court’s Order, notice of the settlement was posted on Class

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Counsels’ websites2 on May 3, 2017. This notice included the Court’s Order, the Settlement

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Agreement, and Plaintiffs’ Motion for Preliminary Approval of Class Action Settlement. Screen

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shots of Class Counsel’s respective websites are attached as Exhibits 1 and 2 to Declaration of

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Class Counsel. Additionally, and consistent with the Court’s Order, Class Counsel will also post

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Plaintiffs’ Motion for Attorneys’ Fees and Incentive Awards and any opposition or reply papers

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related to any of the motions contemplated in the Court’s Order, as such documents are filed.

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IV.

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Notice

THE COURT SHOULD GRANT FINAL APPROVAL OF THE SETTLEMENT AS
FAIR, REASONABLE AND ADEQUATE
The law favors the compromise and settlement of class actions. See, e.g., Churchill

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Village, LLC v. Gen. Elec., 361 F.3d 566, 576 (9th Cir. 2004); Officers for Justice v. Civil Serv.

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Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982) (“[V]oluntary

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conciliation and settlement are the preferred means of dispute resolution. This is especially true in

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complex class action litigation.”).

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Evaluating a class-action settlement proposal at the final approval stage requires the

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District Court to determine whether the proposed settlement, taken as a whole, is fair, reasonable,

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Respectively, www.cbplaw.com and www.lieffcabraser.com.

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

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and adequate. Staton v. Boeing Co., 327 F.3d 938, 952 (9th Cir. 2003) (citing Hanlon v. Chrysler

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Corp., 150 F.3d 1011, 1026 (9th Cir. 1997)). To do so, a court should balance the following

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factors: (1) the strength of the plaintiffs’ case; (2) the risk, expense, complexity, and likely

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duration of further litigation; (3) the risk of maintaining class action status throughout the trial; (4)

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the benefits offered in the settlement; (5) the extent of discovery completed and the stage of the

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proceedings; (6) the experience and views of counsel; (7) the presence of a governmental

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participant; and (8) the reaction of the class members to the proposed settlement. Hanlon, 150

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F.3d at 1026.

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Application of these factors in this Action demonstrates that the Settlement is fair,
reasonable, and adequate. Consequently, the Settlement should be finally approved.
A.

The Strength of Plaintiffs’ Case Balanced Against the Risk, Expense,
Complexity, and Likely Duration of Further Litigation

“In determining the probability and likelihood of a plaintiff’s success on the merits of a

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class action litigation, ‘the district court’s determination is [often] nothing more than an amalgam

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of delicate balancing, gross approximations and rough justice.’” Moore v. PetSmart, Inc., 2015

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U.S. Dist. LEXIS 102804, at *19 (N.D. Cal. Aug. 4, 2015) (quoting Officers for Justice v. Civil

17

Serv. Comm’n of City & Cty. of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982)). “There is no

18

particular formula by which that outcome must be tested.” PetSmart, 2015 U.S. Dist. LEXIS

19

102804, at *19.

20

Here, as detailed in Section II.B above, the Second Amended Complaint, consistent with

21

this Court’s order certifying an injunction-only class, seeks classwide declaratory, injunctive, and

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non-monetary equitable relief under the ECPA and CIPA related to three specific uses by

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Facebook of URLs in private messages. The proposed Settlement achieves meaningful relief

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targeted to each of the three URL uses alleged, as well as significant additions to Facebook’s

25

public disclosures regarding it use of Private Message content. Thus, in Plaintiffs’ and Class

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Counsel’s views, the Settlement brings Facebook’s practices relevant to this Action into

27

compliance with ECPA and CIPA.

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

1

In contrast to the tangible, immediate benefits of the Settlement, the outcome of continued

2

litigation, trial and likely appeals is uncertain and could add years to this litigation. For example,

3

Facebook could file a motion to decertify the Class, a motion for summary judgment, and motions

4

in limine. While Plaintiffs strongly believe in the merits of their case, they recognize that in the

5

context of ECPA’s application to electronic messages, there is uncertainty in the law that presents

6

increased risks surrounding such issues as the interpretation of the terms “in transit” and

7

“storage,” and that similar uncertainties present themselves in the context of CIPA’s application

8

to the practices at bar. Further, had the parties reached the trial stage, this case would have

9

presented a costly, expert-intensive and technically complicated jury trial that would have

10

spanned weeks and necessitated extensive and costly trial preparation. Then, following trial,

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there would undoubtedly have been appeals, meaning further delay and more costs.

12

Thus, the benefits of Settlement balanced against the length, expense, and uncertainty

13

surrounding future litigation weighs in favor of final approval. See Rodriguez v. West Publ’g

14

Corp., 563 F.3d 948, 966 (9th Cir. 2009); In re Yahoo Mail Litig., No. 13-CV-4980-LHK, 2016

15

U.S. Dist. LEXIS 115056, at *20-22 (N.D. Cal. Aug. 25, 2016); Nat’l Rural Telecomms. Coop. v.

16

DIRECTV, Inc., 221 F.R.D. 523, 526 (C.D. Cal. 2004) (“The Court shall consider the vagaries of

17

litigation and compare the significance of immediate recovery by way of the compromise to the

18

mere possibility of relief in the future, after protracted and expensive litigation.”) (citation

19

omitted); 4 Alba Conte & Herbert B. Newberg on Class Actions §11.50 (4th ed. 2002) (“In most

20

situations, unless the settlement is clearly inadequate, its acceptance and approval are preferable

21

to lengthy and expensive litigation with uncertain results.”).

22

B.

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It is well-recognized that “[a] district court may decertify a class at any time.” Rodriguez,

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563 F.3d at 968 (9th Cir. 2009) (citing Gen. Tel. Co. of Sw v. Falcon, 457 U.S. 147, 160 (1982)).

25

Here, Facebook vigorously opposed Plaintiffs’ Motion for Class Certification, as its opposition

26

brief shows (see Dkt. 147-4). In keeping with Facebook’s position and vigor, Plaintiffs believe

27

that Facebook may have pursued a motion for decertification in this Action prior to trial.

28

Although Plaintiffs are confident that a motion to decertify the class would not be successful, they

The Risk of Maintaining Class Action Status Throughout Trial

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

1

also recognize that maintaining the Class through trial is far from guaranteed in this Action.

2

Consequently, although deemed relatively low, the risk of losing class certification in this Action

3

still weighs in favor of the Settlement. PetSmart, Inc., 2015 U.S. Dist. LEXIS 102804, at *19

4

(“the notion that a district court could decertify a class at any time is an inescapable and weighty

5

risk that weighs in favor of settlement.”).

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C.

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As set forth above, the Settlement provides meaningful, non-monetary policy changes that

The Benefits Offered in Settlement

8

will benefit Facebook users going forward and, in Plaintiffs’ and Class Counsel’s views, ensures

9

Facebook’s compliance with the ECPA and CIPA as to each of the three challenged practices in

10

the Second Amended Complaint. At the same time, the release granted to Facebook in this Action

11

is adequately tailored so that no Settlement Class Member will release his or her claim to

12

monetary damages or relief. As such, the release “adequately balances fairness to absent class

13

members and recovery for plaintiffs with defendants’ business interest in ending th[e] litigation

14

with finality.” Martin v. Global Tel*Link Corp., 2017 U.S. Dist. LEXIS 53899 (C.D. Cal. Apr. 7,

15

2017) (internal quotations and citation omitted).

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D.

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For the parties “to have brokered a fair settlement, they must have been armed with

Extent of Discovery and Stage of Proceedings

18

sufficient information about the case to have been able to reasonably assess its strengths and

19

value.” Acosta v. Trans Union, LLC, 243 F.R.D. 377, 396 (C.D. Cal. 2007). “A settlement

20

following sufficient discovery and genuine arms-length negotiation is presumed fair.” Nat’l

21

Rural Telecommunications Coop. v. DIRECTV, Inc., 221 F.R.D. 523, 528 (C.D. Cal. 2004).

22

Here, the settlement was negotiated on a developed record at an advanced stage of

23

litigation – near the close of factual discovery after this Court had certified a class for injunctive

24

and declaratory relief. The parties have engaged in extensive discovery and motions practice

25

providing all parties with the information necessary to make an informed evaluation of the case.

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Specifically, the parties engaged in almost two years of discovery, including the production of

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tens of thousands of pages of documents, fact and expert depositions of 18 witnesses (spanning

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19 days of testimony), informal conferences and discussions, hundreds of hours reviewing
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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

1

detailed technical documentation, substantial discovery motion practice and the exchange of

2

hundreds of pages of written discovery requests and responses. Hence, both sides were able to

3

negotiate the Settlement on a fully informed basis and with a thorough understanding of the

4

merits and value of the parties’ respective claims and defenses. Accordingly, the extent of

5

discovery completed and the stage of the proceedings weigh strongly in favor of final approval of

6

the Settlement. DIRECTV, Inc., 221 F.R.D. at 528 (“the proposed settlement was reached only

7

after the parties had exhaustively examined the factual and legal bases of the disputed claims” and

8

“[t]his fact strongly militates in favor of the Court’s approval of the settlement.”).

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10

E.

The Experience and View of Counsel

The Ninth Circuit has noted that “[p]arties represented by competent counsel are better

11

positioned than courts to produce a settlement that fairly reflects each party’s expected outcome

12

in litigation.” Rodriguez, 563 F.3d at 967; In re Pacific Enters. Sec. Litig., 47 F.3d 373, 378 (9th

13

Cir. 1995) (same). As such, “[a] district court is ‘entitled to give consideration to the opinion of

14

competent counsel that the settlement [is] fair, reasonable, and adequate.” Ching v. Siemens

15

Indus., Inc., No. 11-4838-MEJ, 2014 U.S. Dist. LEXIS 89002, at *17 (N.D. Cal. June 27, 2014).

16

Here, based on their analyses of the risks, burdens, and expense of continued litigation as

17

well as their experience litigating other complex class actions, Class Counsel firmly believe the

18

Settlement is fundamentally fair, adequate and reasonable, and in the best interest of the Class. In

19

addition, experienced counsel for Facebook has informed the Court of their view that the

20

settlement is fair, reasonable, and adequate. (See Dkt. 230).

21

F.

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While no governmental entity is a party to this litigation, notice has been issued to the

23

appropriate federal and state officials in accordance with the 28 U.S.C. § 1715, and to date no

24

governmental entity has raised objections or concerns about the Settlement.

The Presence of a Governmental Participant

25

G.

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The Court “must reach a reasoned judgment that the proposed agreement is not the

27

product of fraud or overreaching by, or collusion among, the negotiating parties.” Class Plaintiffs

28

v. City of Seattle, 955 F.2d 1268, 1290 (9th Cir. 1992) (citations omitted). Where, as here, a

Lack of Collusion Between the Parties

- 10 -

MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

1

settlement is the product of arm’s length negotiations conducted by capable and experienced

2

counsel, the court begins its analysis with a presumption that the settlement is fair and reasonable.

3

See 4 Newberg § 11.41; In re Heritage Bond Litig., 2005 U.S. Dist. LEXIS 13555, at *11-12

4

(C.D. Cal. June 10, 2005).

5

In addition, the participation of two highly-respected and neutral mediators across four in-

6

person mediation sessions with the benefit of mature discovery and motion practice underscores

7

the fact that the proposed Settlement is not the product of collusion. In re Immune Response Sec.

8

Litig., 497 F. Supp. 2d 1166, 1171 (S.D. Cal. 2007) (involvement of mediator was “highly

9

indicative of fairness”); Satchell v. Federal Express Corp., No. C 03-2659 SI, 2007 U.S. Dist.

10

LEXIS 99066, at *17 (N.D. Cal. Apr. 13, 2007) (“The assistance of an experienced mediator in

11

the settlement process confirms that the settlement is non-collusive.”).

12

Thus, as previously determined by this Court in its Preliminary Approval Order, the

13

Settlement in this Action “(a) is the result of serious, informed, non-collusive arms’-length

14

negotiations, involving experienced counsel familiar with the legal and factual issues of this case

15

and made with the assistance and supervision of a mediator; (b) meets all applicable requirements

16

of law, including Federal Rule of Civil Procedure 23, and the Class Action Fairness Act

17

(“CAFA”), 28 U.S.C. § 1715; and (c) is not a finding or admission of liability by Defendant.”

18

(Dkt. 235 at 2.)

19

V.

20
21

CONCLUSION
For the foregoing reasons, Plaintiffs and Class Counsel respectfully request that the Court

enter an Order granting final approval of the Settlement.

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH

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Dated: May 26, 2017

By:

/s/ Hank Bates

CARNEY BATES & PULLIAM, PLLC
Hank Bates (CA #167688)
[e-mail]
Allen Carney
[e-mail]
David Slade
[e-mail]
519 West 7th St.
Little Rock, AR 72201
Telephone: [phone]
Facsimile: [phone]
Michael W. Sobol (CA #194857)
[e-mail]
David T. Rudolph
[e-mail]
Melissa Gardner
[e-mail]
LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP
275 Battery Street, 29th Floor
San Francisco, CA 94111-339
Telephone: [phone]
Facsimile: 415.956.1008

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Rachel Geman
[e-mail]
Nicholas Diamond
[e-mail]
LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP
250 Hudson Street, 8th Floor
New York, NY 10013-1413
Telephone: [phone]
Facsimile: 212.355.9592

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Class Counsel

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MOTION FOR FINAL APPROVAL OF
CLASS ACTION SETTLEMENT
CASE NO. 4:13-CV-05996-PJH