Campbell et al v. Facebook Inc.

Filing 238

Motion and [Proposed] Order for an Award of Attorneys' Fees and Costs and Service Awards filed by Matthew Campbell, Michael Hurley. SEE DOCKET ENTRY 239 FOR A CORRECTED VERSION OF DECLARATION ATTACHED AS EXHIBIT 1 TO THIS DOCUMENT. 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 1-4, # 2 Proposed Order)(Sobol, Michael) (Filed on 5/26/2017) Modified on 5/30/2017 (cjlS, COURT STAFF). Modified on 5/30/2017 (cjlS, COURT STAFF).

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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

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Plaintiffs,

Case No. 4:13-cv-05996-PJH-SK
[PROPOSED] ORDER GRANTING
PLAINTIFFS’ UNOPPOSED MOTION
FOR AN AWARD OF ATTORNEYS’ FEES
AND COSTS AND SERVICE AWARDS

v.
FACEBOOK, INC.,
Defendant.

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[PROPOSED] ORDER GRANTING PLAINTIFFS’
MOTION FOR FEES & COSTS & SERVICE AWARDS
CASE NO. 4:13-CV-05996-PJH

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Having reviewed the Plaintiffs’ Unopposed Motion for an Award of Attorneys’ Fees and

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Costs and Service Awards and the documents submitted in support thereof, the Court now

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FINDS, CONCLUDES, and ORDERS as follows:

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1.

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

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

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for violations of the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510 et seq.

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

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California’s Unfair Competition Law California Business and Profession Code §§ 17200 et seq.

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(“UCL”). Therein, Plaintiffs alleged that Facebook, as a routine policy and business practice,

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captured and reads its users’ personal, private Facebook messages without their consent for

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purposes including, but not limited to, data mining and user profiling, generating “Likes” for web

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pages, and targeted advertising. (Dkt. 1).

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2.

On April 15, 2014, the Court entered an order granting Plaintiffs’ motion to

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consolidate this Action with a related action filed by Plaintiff David Shadpour, Shadpour v.

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Facebook, Inc., Case No. 5:14-cv-00307-PSG (N.D. Cal.). (See Dkt. 24). Subsequently, Plaintiffs

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filed a Consolidated Amended Complaint on April 25, 2014, asserting ECPA, CIPA, and UCL

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claims on behalf of themselves and a proposed class of “[a]ll natural-person Facebook users

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located within the United States who have sent or received private messages that included URLs

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in their content, from within two years before the filing of this action up through and including

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the date when Facebook ceased its practice.” (See Dkt. 25.).1

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3.

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

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

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

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in 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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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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[PROPOSED] ORDER GRANTING PLAINTIFFS’
MOTION FOR FEES & COSTS & SERVICE AWARDS
CASE NO. 4:13-CV-05996-PJH

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4.

On May 18, 2016, the Court issued an 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). The class definition was as

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follows:

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All natural-person Facebook users located within the United States
who have sent, or received from a Facebook user, private messages
that included URLs in their content (and from which Facebook
generated a URL attachment), from within two years before the
filing of this action up through the date of the certification of the
class.

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(See Id.).

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5.

Specifically, the Court certified for class treatment three specific alleged uses by

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Facebook of URLs included in private messages: (1) Facebook’s cataloging URLs shared in

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private messages and counting them as a “Like” on the relevant third-party website,

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(2) Facebook’s use of data regarding URLs shared in private messages to generate

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recommendations for Facebook users, and (3) Facebook’s sharing of data regarding URLs in

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messages (and attendant demographic data about the messages’ participants) with third parties.

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

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

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2016. (Dkt. 196).

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6.

On December 7, 2016, the parties engaged in a fourth mediation before Randall

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Wulff. As a result of this final effort, the parties were able to reach an agreement-in-principle to

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resolve this Action at the December 7, 2016 mediation, and on December 23, 2016, the parties

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filed a Joint Status Report, advising the Court that they had reached a settlement-in-principle.

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(See Dkt. 222). Thereafter, the parties memorialized the terms of the settlement, first in a

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Memorandum of Understanding executed on February 9, 2017, and subsequently in the

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Settlement Agreement executed and filed with this Court on March 1, 2017 (Dkt. 227-3), which

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acknowledges the relief afforded to the Class (Id. At ¶ 40) as well as the role of Class Counsel in
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[PROPOSED] ORDER GRANTING PLAINTIFFS’
MOTION FOR FEES & COSTS & SERVICE AWARDS
CASE NO. 4:13-CV-05996-PJH

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obtaining such relief (Id.). In the Settlement Agreement, Facebook agreed to take no position on

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an award of attorneys’ fees and costs of up to $3,890,000. At that time, Class Counsel

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approximated that they would seek $3,230,000 in fees – a significant reduction from the lodestar

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accrued to that date – and $660,000 in costs; however, it was agreed Class Counsel may apply in

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different amounts not to exceed $3,890,000. Prior to that agreement, Class Counsel provided

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Facebook with the monthly time summaries of Class Counsel’s lodestar to facilitate negotiation

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and resolution of the fee issue.

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On April 26, 2017, this Court granted preliminary approval to the parties’

settlement and ordered that Class Counsel file an application for attorneys’ fees on or before May
26, 2017. (Dkt. 235 at ¶ 14).
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Plaintiffs have now filed their Unopposed Motion for an Award of Attorneys’ Fees

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and Costs and Service Awards (“Fee Motion”), supported by the joint declaration of Class

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Counsel Michael Sobol and Hank Bates (“Joint Declaration”), which attaches as exhibits

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summaries of Class Counsel’s hours billed, hourly rates, and costs incurred, as well as

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declarations from each Class Representative attesting to their respective participation in this

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Action. The Court addresses, in turn, the appropriateness of the attorneys’ fees, costs, and service

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awards sought.

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9.

Even where a settlement agreement provides for fees and a defendant commits to

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take no position on them, in the class action context, a court must still ensure that the attorneys’

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fees and costs awarded are “fundamentally fair, adequate, and reasonable.” See Staton v. Boeing,

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Co., 327 F. 3d 938, 963-64 (9th Cir. 2003).

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In assessing the reasonableness of an attorney’s hourly rate, courts consider

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whether the claimed rate is “in line with those prevailing in the community for similar services by

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lawyers of reasonably comparable skill, experience and reputation.” Blum v. Stenson, 465 U.S.

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886, 895-96 n.11 (1984). The Fee Motion and accompanying Joint Declaration establish the

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experience, credentials, and rates of Class Counsel, sufficient to warrant the rates sought. Fee

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Motion at 13; Joint Decl. at ¶¶ 27-30, 40-55.

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[PROPOSED] ORDER GRANTING PLAINTIFFS’
MOTION FOR FEES & COSTS & SERVICE AWARDS
CASE NO. 4:13-CV-05996-PJH

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11.

ECPA provides for an award of reasonable attorneys’ fees and costs. See 18

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U.S.C.S. §2520(b)(3) (providing appropriate relief includes “a reasonable attorney’s fee and other

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litigation costs reasonably incurred.”). Similarly, in light of the CIPA claim, the requested

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attorneys’ fees are appropriate in this Action pursuant to California’s “private attorney general”

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statute, which provides for an award of attorneys’ fees to a “successful party.” See Cal. Civ. Proc.

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Code § 1021.5.

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12.

The Joint Declaration of Class Counsel provides a detailed chronological summary

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of the work performed by Class Counsel, a spreadsheet showing the number of hours devoted by

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each firm to fourteen categories of activities, and spreadsheets setting forth the number of hours

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billed, the hourly rates, and the lodestar for each individual attorney and staff member who

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substantially contributed to the prosection of this Action, arriving at a total lodestar of

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$6,509,773.00. The amount Class Counsel requests in fees – $3,236,304.69 – is just under half of

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that lodestar, or an overall 50% reduction from their full fees.

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The Ninth Circuit recently reconfirmed that “[t]here is a strong presumption that

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the lodestar figure represents a reasonable fee.” Rodriguez v. West Publ. Corp., 602 Fed. Appx.

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385, 387 (9th Cir. 2015). Further, courts within this District and its sister district have held that a

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significant negative multiplier—such as the 0.5 multiplier at issue here—“strongly suggests the

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reasonableness of the negotiated fee.” Rosado v. Ebay Inc., No. 5:12-CV-04005-EJD, 2016 U.S.

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Dist. LEXIS 80760, at *26 (N.D. Cal. June 21, 2016) (negative multiplier of 0.54); See Gong-

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Chun v. Aetna, No. 1:09-CV-01995-SKO, 2012 U.S. Dist. LEXIS 96828, at *53 (E.D. Cal. Jul.

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12, 2012) (holding that a negative multiplier of 0.79 suggests that the negotiated fee award is

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reasonable); Chun-Hoon v. Mckee Foods Corp., 716 F. Supp. 2d 848, 854 (N.D. Cal. 2010)

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(reasoning that a negative multiplier suggests a reasonable and fair valuation of the services

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provided by class counsel). In this case, the amount that Class Counsel agreed to accept is far

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less than their lodestar, making it fair, reasonable and adequate for the Class. Accordingly, the

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Court approves Class Counsel’s request.

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14.

Class Counsel seeks $653,695.31 in unreimbursed out-of-pocket costs incurred

over the course of this litigation. The Settlement terms and well-settled precedent support Class
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[PROPOSED] ORDER GRANTING PLAINTIFFS’
MOTION FOR FEES & COSTS & SERVICE AWARDS
CASE NO. 4:13-CV-05996-PJH

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Counsel’s entitlement to recovery of out-of-pocket costs reasonably incurred in investigating,

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prosecuting, and settling these claims. See, e.g., In re Media Vision Tech. Sec. Litig., 913 F. Supp.

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1362, 1366 (N.D. Cal. 1996). As detailed in the Joint Declaration, these costs were reasonably

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incurred in furtherance of the investigation, prosecution, and Settlement of the Action and should

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be reimbursed. Decl. at ¶¶ 34-37; see In re Toys “R” Us-Del., Inc. Fair & Accurate Credit

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Transactions Act (FACTA) Litig., 295 F.R.D. 438, 469 (C.D. Cal. 2014).

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The Settlement also provides for service awards of $5,000 to each Class

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Representative—respectively, to Matthew Campbell and Michael Hurley. See Settlement

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Agreement, ¶ 60. As the Ninth Circuit has recognized, “named plaintiffs, as opposed to

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designated class members who are not named plaintiffs, are eligible for reasonable incentive

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payments.” Staton, 327 F.3d at 977; Rodriguez v. West Publishing Corp., 563 F.3d 948, 958 (9th

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Cir. 2009) (service awards “are fairly typical in class action cases”). Such awards are “intended to

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compensate class representatives for work done on behalf of the class [and] make up for financial

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or reputational risk undertaken in bringing the action.” Id.; see also Van Vranken v. Atl. Richfield

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Co., 901 F. Supp. 294, 299-300 (N.D. Cal. 1995).

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In this District, service awards in the amount of $5,000 per class representative are

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“presumptively reasonable.” In re Linkedin User Privacy Litig., 309 F.R.D. 573, 592 (N.D. Cal.

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2015). In this case, the Class Representatives sat for day-long depositions, produced a significant

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amount of documents in discovery, answered numerous written discovery requests and invested

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substantial time over the past three years in collaborating and communicating with Class Counsel

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and monitoring the litigation. The Court finds that the service awards in this Action are well

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justified under the circumstances.

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It is therefore ORDERED that Class Counsel be awarded $3,890,000 in reasonable

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attorneys’ fees and costs, and that Class Representatives Matthew Campbell and Michael Hurley

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will each receive $5,000 service awards, in accordance with the Settlement Agreement.

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[PROPOSED] ORDER GRANTING PLAINTIFFS’
MOTION FOR FEES & COSTS & SERVICE AWARDS
CASE NO. 4:13-CV-05996-PJH

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IT IS SO ORDERED.

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DATED:
HONORABLE PHYLLIS J. HAMILTON
UNITED STATES DISTRICT JUDGE

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[PROPOSED] ORDER GRANTING PLAINTIFFS’
MOTION FOR FEES & COSTS & SERVICE AWARDS
CASE NO. 4:13-CV-05996-PJH