Campbell et al v. Facebook Inc.

Filing 245

Statement re 237 MOTION for Settlement Motion for Final Approval of Class Action Settlement and Response to Objection 243 by Facebook Inc.. (Attachments: # 1 Declaration of Joshua Jessen, # 2 Exhibit 1 to the Declaration of Joshua Jessen, # 3 Exhibit 2 to the Declaration of Joshua Jessen)(Chorba, Christopher) (Filed on 7/10/2017)

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Exhibit 1 UNITED STATES DISTRICT COURT CERTIFIED COPY NORTHERN DISTRICT OF CALIFORNIA Before The Honorable Phyllis J. Hamilton, Judge Matthew Campbell, Michael ) Hurley, and David Shadpour, ) ) Plaintiffs, ) ) VS. ) ) Facebook, Inc., ) ) Defendant. ) ____________________________) Motion for Preliminary Approval for Class Action Settlement NO. C 13-05996PJH Pages 1 - 32 Oakland, California Wednesday, April 19, 2017 REPORTER'S TRANSCRIPT OF PROCEEDINGS APPEARANCES: For Plaintiffs: BY: Lieff Cabraser Heimann & Bernstein LLP 275 Battery Street, 30th Floor San Francisco, California 94111 DAVID T. RUDOLPH, ATTORNEY AT LAW BY: Carney Bates & Pulliam PLLC 519 West 7th Street Little Rock, Arkansas 72201 HANK BATES, ATTORNEY AT LAW (APPEARANCES CONTINUED NEXT PAGE) Reported By: Raynee H. Mercado, CSR No. 8258 Proceedings reported by electronic/mechanical stenography; transcript produced by computer-aided transcription. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 A P P E A R A N C E S (CONT'D.) For DEFENDANT: BY: Gibson, Dunn & Crutcher LLP 3161 Michelson Drive Irvine, California 92612-4412 JOSHUA A. JESSEN, ATTORNEY AT LAW Gibson, Dunn & Crutcher LLP 1881 Page Mill Road Palo Alto, California 94304 JEANA BISNAR MAUTE, ATTORNEY AT LAW BY: Gibson, Dunn & Crutcher LLP 333 South Grand Avenue Los Angeles, California 90071 CHRISTOPHER CHORBA, ATTORNEY AT LAW --o0o-- RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 3 1 Wednesday, April 19, 2017 2 9:16 a.m. P R O C E E D I N G S 3 THE CLERK: 4 et al. versus Facebook, Inc. 5 Calling civil case 13-05996, Campbell, Counsel, please step forward and state your appearances. 6 (Pause in the proceedings.) 7 THE COURT: All right. 8 MR. BATES: Good morning. 9 10 Hank Bates with Carney Bates & Pulliam on behalf of plaintiffs and the injunctive relief class. 11 THE COURT: 12 MR. JESSEN: Good afternoon. Good morning. Good morning, Your Honor. Joshua Jessen 13 from Gibson, Dunn & Crutcher on behalf of the defendant 14 Facebook. 15 Bisnar Maute. I'm joined by my colleagues Chris Chorba and Jeana 16 THE COURT: 17 MR. CHORBA: 18 THE COURT: All right. Good morning. Morning, Your Honor. All right. This matter is also on for 19 approval preliminary approval of class action settlement that 20 you all have reached. 21 22 Counsel? MR. BATES: Yes, Your Honor. I can address questions 23 or I can sort of walk through how we got here and are in the 24 settlement, however is your preference. 25 THE COURT: Well, you've outlined how you got through RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 4 1 settlement. There -- I have just a couple of issues -- 2 MR. BATES: Okay. 3 THE COURT: -- with respect to it. 4 certified only an injunctive relief class. 5 This -- I mean, I There's only injunctive relief that's at issue here. 6 MR. BATES: Correct, Your Honor. 7 THE COURT: There are no damages at issue. You all 8 have arrived at a mutually agreeable position with respect to 9 the challenged uses that Facebook was making of the -- of the 10 information. 11 you were seeking in the case. 12 I think that's reasonable. I mean, that's what And I find that the settlement on its face is certainly 13 within the ballpark of a settlement that the court would 14 ultimately find adequate and reasonable. 15 I do however have some issues, though. As I indicated in 16 the previous settlement, clearly, attorneys' fees is going to 17 have to be justified in the case at the time that you submit a 18 motion for fees, as well as the incentive awards that you're 19 seeking for the named plaintiffs. 20 You know, I had some real issue as to whether or not there 21 was any actual harm in this case, and so I'll -- I'm not 22 exactly sure what, except perhaps litigation participation, 23 the named plaintiffs would be deserving of some sort of a 24 monetary award. 25 I do see that they are waiving their rights to pursue any RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 5 1 monetary damages against Facebook, whereas the putative class 2 is -- is not -- 3 MR. BATES: Correct, Your Honor. 4 THE COURT: -- waiving those rights. 5 And that, I guess, might be worth something. 6 MR. BATES: We can address that in the -- 7 THE COURT: But you'll address that in the papers. 8 MR. BATES: -- in the papers, but the general -- they 9 were very involved in this litigation with long depositions, 10 document production, interrogatory responses, including some 11 of their communicates also being deposed. 12 THE COURT: Their depositions were taken? 13 MR. BATES: Yes. 14 THE COURT: Okay. 15 MR. BATES: Yeah, there were -- and we'll address all 16 that in the final papers. And we've asked for the 5,000 17 apiece, which is the bench mark generally in the Ninth 18 Circuit. 19 THE COURT: Right. 20 MR. BATES: And we'll also, of course, address the 21 22 23 Okay. fee issue in more detail at that time as well. THE COURT: Okay. Since it's an injunctive relief case only, I assume you'll be seeking a Lodestar -- 24 MR. BATES: Correct, Your Honor. 25 THE COURT: -- award in the case? RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 6 1 2 3 Okay. All right. Then we'll take a closer look at that time. All right. So the real issue remaining is -- well, there 4 are a couple of minor issues. But the real issue is the 5 question of notice to the class. 6 MR. BATES: Yes, Your Honor. 7 THE COURT: I -- I'm not persuaded that no notice 8 should be given to the class. I mean, notwithstanding that it 9 it's a (b)(2) class and class certification doesn't have to be 10 noticed to the class, there's nothing that relieves, I think, 11 the parties from notifying the class of an actual settlement 12 or of the fact that the plaintiffs' counsel will be seeking 13 fees in the case. 14 a -- or require that the class be notified before either of 15 those things happen so that they can submit objections. 16 17 18 Both section 23(E) and (H) anticipate that Frankly, I don't know how I would entertain any objections unless we gave notice to the class in some fashion. Granted, we don't know how large the class is. You all 19 have never been able -- required to pinpoint a number, but it 20 seems to me that some form of notice is necessary in order to 21 fill our responsibilities under rule 23(E) and (H). 22 MR. BATES: Well, Your Honor, it's certainly within 23 our discretion to require notice. In terms of how we got to 24 the decision not to propose notice, we took a very hard look 25 at it, and, frankly, all of the cases that have addressed it RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 7 1 in the Northern District and then in addition to cases in the 2 other California districts and a string of cases in the 3 Southern District in new York all did not require notice in a 4 (b)(2) context for a variety of reasons, so we didn't have 5 case law to bring to you to say notice should be required in 6 the -- 7 THE COURT: I don't need case law. 8 MR. BATES: You're exactly right. 9 THE COURT: The statute -- I mean, the rule says 10 they're supposed to get notice so that they can file an 11 objection to fees if they wish to or otherwise object to 12 the -- the class. 13 procedure? I mean, haven't you built in an objection 14 MR. BATES: We have, Your Honor. 15 THE COURT: You have. So how are people supposed to 16 object if they don't know that there's going to be a 17 settlement? 18 MR. BATES: There's been a fair amount of media 19 attention on this case and -- and there would be some notice 20 through that. 21 In terms of -- of providing notice, in terms of the way 22 the courts have looked at it, in terms of if we're going to -- 23 if, indeed, the court is requiring notice in this context, 24 we're going to have to figure out what type of notice we're 25 going to do. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 8 1 THE COURT: Sure. 2 MR. BATES: You know, the courts have looked at it, 3 and what they've balanced is when it's injunctive relief only, 4 when injunctive relief doesn't require any -- 5 THE COURT: Waiver. 6 MR. BATES: -- affirmative action of any type. 7 THE COURT: Or waiver of damages. 8 MR. BATES: Or waiver. 9 And of course, most important thing is the -- the express carving out of any claims for 10 monetary damages from the release. 11 counter-balanced with the cost of notice in terms of -- on 12 the -- on the detriment side. 13 THE COURT: And then that's Well, what -- I mean, first of all, you 14 have no idea who the -- who all the class members are. 15 difficult would it be to send out some sort of Internet 16 notice? So how I mean, how expensive would that be? 17 MR. BATES: In terms of -- 18 THE COURT: I mean, I imagine that Facebook -- can't 19 you just post something and send it to everyone? 20 have something like a list serve? 21 MR. JESSEN: Don't you That's actually a very onerous process, 22 Your Honor, to contact everyone. I mean, first of all, it 23 is -- we don't really know who the class members are. 24 But even assuming that -- but that's sort of one hurdle, is 25 how do we identify these folks because there really is no RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 And -- 9 1 administratively feasible way to determine who during the 2 class period sent a message with a URL that was turned into an 3 attachment. 4 folks. 5 So that's one issue, is how do you identify these There's really no good way to do it. But even if we 6 could, sending out a massive number of emails or providing 7 some other sort of notification is a very significant 8 undertaking. 9 time-consuming. 10 Go ahead. 11 12 It would be expensive. Sorry. THE COURT: MR. JESSEN: 14 THE COURT: 16 What about some sort of Internet advertising? 13 15 It would be terribly Yeah, I think -Isn't that what they did in the Yahoo! case? MR. JESSEN: Yeah. And allow my to address -- Excuse 17 me, Your Honor -- a couple points. They did do that in the 18 Yahoo! case, although Judge Koh in her order granting approval 19 of that settlement acknowledged that for a (b)(2) settlement 20 with injunctive relief only and no damages relief, that notice 21 is not required. 22 And, in fact, if -- obviously, if Your Honor looks at 23 Federal Rule Civil Procedure 23(c)(2), you know, the rule says 24 for any class certified under 23(b)(1) or (b)(2), the court 25 may direct appropriate notice to the class. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 10 1 2 3 THE COURT: But that's notice of certification. That's not notice of settlement. MR. JESSEN: Look at Section E and H. I've looked at those, Your Honor, and 4 there have been -- As the plaintiff cite in their motion for 5 preliminary approval, there have actually been several cases 6 including in the Northern District that have considered this 7 very issue and -- and we've cited them. 8 the Lilly vs. Jamba Juice case. 9 THE COURT: Sure. One of the cases is I don't agree with those, though. 10 And there isn't any Ninth Circuit authority one way or the 11 other on how to interpret those two provisions of Rule 23. 12 13 14 MR. JESSEN: Agree that there's no Ninth Circuit authority, Your Honor. One point that I would make, and Your Honor acknowledged 15 this in your order for class certification. 16 that ascertainability is a requirement for a (b)(2) class. 17 The court, you know, rejected that argument. 18 Honor's rationale in the class certification order was, unlike 19 in a Rule 23(b)(3) class, where people have a right to opt 20 out, and -- and that's not the case and -- and mandatory 21 notice is required, that's not the case, as I think the 22 Supreme Court said in the Dukes case in a Rule 23(b)(2) class. 23 So I think, you know -- 24 25 THE COURT: We had argued But part of Your But once again, that's not settlement notice or the notice that is required to give before RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 11 1 2 attorneys' fees are considered and granted. It's not the same thing. 3 MR. JESSEN: I don't -- I don't know that the courts 4 have drawn that distinction, Your Honor. 5 Mr. Bates is right that the court does have discretion not -- 6 7 THE COURT: "Newberg on Class Actions" has drawn that distinction even if the courts haven't. MR. JESSEN: 8 9 I think -- I think Yeah. I think if I could raise a few other points, Your Honor, that -- that are significant. 10 Number one, there has actually been a lot of media and 11 publicity around this case from day one. 12 actually when we filed -- when the parties filed a settlement 13 agreement. 14 outlets. 15 It continued The settlement was reported in numerous news Number two, we have -- is we have provided notice to -- 16 pursuant to CAFA to all attorney generals in all 50 states, to 17 the U.S. Attorney General, and territories. 18 been dispersed pretty widely. 19 So notice has As a practical matter, Your Honor, first of all, notice 20 here would be expensive. 21 the appropriate kind of notice. 22 It'd be very difficult to figure out But secondly, it's unclear what the point of the notice 23 would be. No one can opt out of this class. 24 injunctive-relief-only class. 25 It's an is releasing damages claims. They're not -- No one -- No one RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 12 1 THE COURT: But they can object. They can object 2 that this declaratory relief or the injunctive relief doesn't 3 go far enough. 4 any amount of fees that are being sought. They can object to that. MR. JESSEN: 5 They can object to I -- I think, Your Honor -- this gets to 6 the other point I was going to make, which is our fear is 7 notice in this context is just going to create confusion. 8 9 Typically when people get noticed, they think they should do something with it. Here, we're dealing with practices -- 10 the sort of three uses that Your Honor certified in her class 11 certification order that -- that ceased many years ago, in 12 2012 and 2014 respectively. 13 And so we anticipate -- it's unclear sort of what the 14 notice would say, but I think it's going to create a lot of 15 confusion. 16 to opt out, they don't -- they're not releasing damages 17 claims. 18 does, Your Honor, gets significant publicity. 19 And since these class members don't have a right We would -- In all likelihood, anything Facebook And we don't to have infrastructure to answer questions 20 that are going to inevitably come up if someone gets notice, 21 saying, by the way, there are these historical practices -- 22 THE COURT: Well, what is the point of, then, 23 allowing the class an opportunity to make objections if we're 24 not going to tell them that something's going on with this 25 class that they've been hearing about. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 13 1 MR. JESSEN: 2 THE COURT: 3 There -What's the point? And we are required to give them notice of attorneys' fees 4 that are being sought. I assume there's agreement that, 5 indeed, the class is entitled to object to that if they wish. 6 MR. BATES: Yes, Your Honor. 7 THE COURT: So how do we notify them of that? 8 MR. BATES: And I've -- I understand your perspective 9 And, again -- Your Honor, frankly when we start to look at this, we started 10 from your perspective as a sort of default position that 11 notice should be provided. 12 It was only after we read all the case law and found no 13 case consistent with that position. 14 court does not have discretion to require it. 15 of, you know, the options for some type of notice in this 16 context. 17 that notice wasn't required the parties had proposed notice. 18 That does not mean that And in terms And -- In the Yahoo! case, although the court noted And in part, they had done it there because of the 19 different nature of the case. 20 class as opposed to a user class, so they were outside the 21 loop of the terms of service. 22 disclosures to the class that -- since they were outside the 23 terms of service, communication, right? 24 25 It was a -- It was a non-user It a way of providing And that was a part of -- and what they tell in that class, they did do Internet advertising. I think the cost was RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 14 1 around -- think it exceeded a hundred thousand dollars, around 2 there. 3 general -- 4 And in order to put banner ads that would provide THE COURT: And that's probative in this case? I 5 mean, Facebook is a multi-billion-dollar company. 6 not -- I mean, hundred thousand dollars does not seem to me to 7 be a prohibitive amount of money to spend on some notice. 8 I'm more concerned -- 9 I agree they can't opt out of the class. You're But In fact, some of 10 procedures that you've agreed to cease doing you'd stopped 11 even before you all had entered into a settlement, at least 12 that was the representation. 13 MR. JESSEN: 14 THE COURT: Correct. Correct. So okay. They can't opt out. 15 Whether or not they should be able -- the class members should 16 be able to object that the relief should be broader is 17 probably kind of a small thing. 18 major issue. 19 But it is an issue but not a But the attorneys' fees is -- is a significant issue. In 20 fact, most -- the vast majority of objections I get are that 21 attorneys' fees are inappropriate given the -- the nature of 22 the settlement, the amount of the settle, et cetera. 23 think that class members -- even class members who can't do 24 anything about the relief that's been agreed to have a right 25 to assert those objections. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 And I 15 1 So that's my main concern. 2 MR. BATES: Okay. 3 THE COURT: Complying with 23(e). 4 it's 23(e). 5 supposed to do that? 6 MR. JESSEN: 7 THE COURT: I how -- I think How are we supposed to do that? How are you all So -So if you don't want to confuse the class 8 members with giving them details of the practices, et cetera, 9 we still have to tell them that fees are going to be sought in 10 "X" amount, and they have "X" amount of time to object. 11 MR. BATES: Yeah, one -- I mean, the -- there is a -- 12 a significant concern in terms of confusion. 13 of -- we'd have to discuss in terms of what the content would 14 be. 15 and it's simply notice of class certification as opposed to 16 notice of a -- of a class settlement, you get lots of calls 17 'cause people expect to think they need to do something. 18 know, either -- either make a claim or be on the look-out for 19 a check. 20 I think in terms I find even when I've -- when send out notice in a case You Most calls you get is, when do I get my money type calls, 21 'cause there is a sense when you get something, it requires an 22 action by you. 23 the road of notice, if it were more focused on potentially the 24 fee amount, the types of things that -- that they would have 25 an interest in participating. So I think to the extent that if we went down RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 16 1 THE COURT: It can be very -- It's a very simple 2 notice. 3 years. 4 settled it. 5 in any way in which you wish. 6 do nothing. 7 benefit of whatever it is Facebook has agreed to do. 8 9 I mean, the case has been on file for a couple of You simply notify the class that the parties have Facebook has agreed to do -- you can describe it And you as a class member need Everyone who uses Facebook is going to enjoy the However, for the effort and the -- the litigation that was undertaken in order to achieve this, the plaintiffs' lawyers 10 are going to be seeking fees. This is the amount. 11 has agreed to pay, what, up to a certain amount. 12 an objection to that? 13 MR. BATES: THE COURT: Right. Do you have And the service award. 14 Facebook 15 So what's -- what's hard about that? 16 MR. JESSEN: Yeah, I think a couple points, Your 17 Honor. I mean, I do think that the court does have discretion 18 here. 19 little bit of tension between 23(c)(2) and 23(e). 20 says very clearly the court may direct notice, "may," which 21 Judge Koh again, even though the parties in Yahoo!, which was 22 a case involving people who didn't use Yahoo! mail, even 23 though they agreed to provide notice -- Judge Koh acknowledged 24 in that order, even in the context of settlement, notice is 25 not required for a (b)(2) settlement with injunctive relief And if you look at the text -- and I agree there's a RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 23(c)(2) 17 1 2 3 only and -- and no damages release. 23(e) does say the court must -- this is regarding settlement. The court must -- 4 5 Okay? (Off-the-record discussion.) MR. JESSEN: The court must direct notice in a 6 reasonable manner to all class members who would be bound by 7 the proposal. 8 9 Okay? And here, again, it's a mandatory (b)(2). There's -- They're not -- They're not sacrificing any of their 10 substantive rights, Your Honor, as the court in the Lilly vs. 11 Jamba Juice case acknowledged -- and I'm quoting from page 9 12 of the opinion. 13 because even if notified of the settlement, the settlement 14 class would not have the right to opt out from the injunctive 15 settlement and the settlement does not release the monetary 16 claims of class members, the court concludes the class notice 17 is not necessary. 18 I'm happy to provide the cite even if -- And, again, I'll go back to your honor's class 19 certification opinion, which is docket 192, on pages 8 and 9, 20 the court specifically noted that in a (b)(2) class, in -- in 21 determining that ascertainability was not a requirement, the 22 court cited Dukes and -- which -- and I'm quoting the court's 23 opinion, quoting Dukes, the procedural protections attending 24 the B3 class, predominance, superiority, mandatory notice, and 25 the right to opt out are missing from (b)(2), not because the RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 18 1 rule considers them unnecessary but because it considers them 2 unnecessary to a (b)(2) class. 3 distinction, Your Honor. 4 discretion here to not award it. THE COURT: 5 So this is an important I don't think the court does have But I've already decided I'm going to 6 require notice at least of the fees so that there can be 7 objections. 8 parties to object to something they've received no notice of. 9 It seems a meaningless act to set aside time for MR. JESSEN: I disagree on that point, Your Honor, 10 for a couple reasons. Number one, the case has received 11 wide -- widespread publicity, including the settlement 12 agreement. 13 with -- published within a day or two after the settlement. 14 Number two, we have provided notice to the attorney I can submit to Your Honor 12 articles filed 15 generals. 16 opportunity to object. 17 other notice in this context doesn't have a meaning. 18 have a meaning, for the attorney generals to object. 19 And the rule under CAFA, they have to have an Okay? So it's not as if not providing It does Number three, there are a lot of people monitoring this 20 case through the ECF, Your Honor. 21 it are aware of the proceedings based upon the information in 22 the public docket. 23 And people who are aware of So there -- there is -- and I will say -- I want to make 24 another point, Your Honor. In the Yahoo! case, when they did 25 provide this Internet notice -- again, totally different case RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 19 1 because that was a case concerning non-Yahoo! users. 2 You could see even though (b)(2), our position is you 3 don't have to provide notice in a (b)(2) case with injunctive 4 relief only and no damages relief. 5 class is people who don't use the product, in that case, 6 Yahoo! mail, you could understand they wanted to sort of get 7 this out there. 8 9 In the context where the Our case is completely different because everyone in this case is a Facebook user. Part of the -- part of the relief 10 we've acknowledged in this case is we have updated our data 11 policy. 12 also agreed to put additional language on the website. 13 Okay? We've enhanced the data policy. And we've Okay? Everyone who uses Facebook, first of all, is bound by that 14 policy and gets notice of it, okay? 15 that context, and that information is available to them on the 16 website. 17 So they do get notice in Okay. So we're fundamentally differently situated from -- from 18 the parties in Yahoo!. 19 case, even after providing extensive notice, they had one 20 objector, a professional objector. 21 overruled. 22 But I will say that in the Yahoo! The objection was And, again, in this case, Your Honor, it -- it -- it -- I 23 think it would -- it's not required. 24 And if I could make one -- one final point, Your Honor -- 25 THE COURT: It would sow confusion. So are you suggesting, though, that in RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 20 1 class action settlements, we don't give notice, particularly 2 if it's a (b)(2) class -- but we don't give notice because the 3 objections are rare and we rarely get -- I've never received 4 more than a dozen in any one case. MR. JESSEN: 5 No, Your Honor. I'm -- I'm not 6 suggesting that. 7 in that case when they didn't have to provide notice and they 8 did, they had one objection. 9 I'm just saying as a practical matter even In our -- I think you have to look at every -- it's not as 10 if there would not be (b)(2) cases where notice would be 11 appropriate. 12 of those. 13 only be a hundred thousand dollars. 14 litigated this case extensively for three years. 15 we've -- it's been an expensive case to litigate, and -- and 16 additional money on top of that is problematic. 17 18 19 20 21 22 I just think that our particular case is not one It's going to be -- Your Honor says, well, it may Your Honor, we've You know, We actually -- And, frankly, Your Honor, if the court does require -THE COURT: Well, I'm not suggesting that Facebook alone bear the costs. MR. JESSEN: Understood, Your Honor. As a practical matter, this is -- I mean, this -- 23 requiring notice in this context -- again, we're dealing with 24 historical practices that ceased many years ago. 25 updated the data policy which everyone at Facebook gets RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 We've 21 1 notified about. 2 context, notice is likely to confuse people. 3 lead to an influx of inquiries to the company that we're not 4 set up to handle. 5 And it's on the website, okay? In that It's likely to And, frankly, Your Honor, it -- it has the potential to 6 jeopardize the settlement. We have built into the settlement 7 agreement a provision where if certain changes are made to the 8 agreement, the parties can -- can not go forward with the 9 agreement. And one of those is the provision of notice 10 because we don't think it's required, and we don't think it's 11 appropriate in this context. 12 THE COURT: Well, I don't think it's necessarily 13 appropriate for you all to bargain away the court's right to 14 require notice under threat that the settlement won't -- won't 15 come to fruition if the court orders that notice be made. 16 MR. CHORBA: 17 this issue just very briefly? 18 fine job, and Mr. Bates have (sic) as well articulating our 19 position. 20 21 22 Your Honor, Chris Chorba. May I address I think Mr. Jessen has done a And I think Your Honor's made clear that you're inclined to exercise your discretion to require notice. I would like to, if possible, just explore -- I mean, this 23 is something we'll have to discuss with our client. 24 something we'll want to meet and confer with plaintiffs about. 25 But -- And I'm happy to submit this, but in another case that RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 This is 22 1 we had before Judge Chen just last year, we had an extended 2 discussion with the court. 3 (b)(2) only class, no release of damages. 4 What Judge -- And it was another Judge Chen exercised his discretion in that case to not 5 require notice. 6 we're having with you now. 7 We had a very similar dialogue to the one I will say what he found persuasive here were the points 8 Mr. Jessen raised, that there was a CAFA notice. 9 publicity. I will say there was a lot less publicity there 10 than here. He also noted that any filings would be on the 11 public ECF, so any class member paying attention would have 12 the opportunity to review that. 13 There was And fourth and finally, and it's something I'd like to 14 suggest here -- I have no authority with my client -- he 15 actually required the plaintiffs' counsel to post on their 16 website and the counsel here -- both lawyers have on their 17 website pages dedicated to this case. 18 post the attorneys' fees motions on that website and viewed 19 that as an appropriate form of notice. He required them to 20 Because here, as in that case, very difficult time 21 identifying who the people are, so one of our concerns 22 frankly, Your Honor, is once you dip your toe in this water 23 and exercise your discretion to require notice, we have a 24 serious concern that we do not want to be in a world where 25 someone down the line sues us again and says, well, Judge RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 23 1 Hamilton found that you had to give notice, and that notice 2 isn't adequate because I didn't see it. 3 That is our primary concern with this, so I would just 4 submit to Your Honor that I think those four forms that -THE COURT: 5 This is the first I've herd that there is 6 a suggestion of posting it. 7 attorneys' fees. 8 MR. CHORBA: 9 THE COURT: My main concern is with the Right. If indeed those are posted. 10 Tell me about this website. 11 talking about the firm's website -- 12 MR. CHORBA: 13 THE COURT: 14 15 Tell me about -- you're The firm's. -- or is there a class action website of some -MR. CHORBA: It's the firm's website, Your Honor. 16 There's no settlement process, no claims process, so there's 17 not a page dedicated to this case, nor would there be pursuant 18 to the settlement. 19 where there's contact us if you're part of this case or you 20 are a potential claimant in this case. 21 I'm talking about the law firm's websites And, again, it's analogous to the situation that we had in 22 a case with PepsiCo where Judge Chen found that convincing. 23 Again, he had your concerns, how are people going to know 24 about this, where would people go. 25 avenues I would just submit to Your Honor I think are And, again, those four RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 24 1 2 sufficient to kind of cover these concerns. And anyone who's paid attention to this, anyone who has 3 any concern with it would receive notice of it, be able to 4 review the motions, either on the public docket, either 5 through the extensive press coverage -- 6 THE COURT: How does counsel feel about putting the 7 motions on the website? 8 oftentimes include billing information, and what -- what's 9 your view on that? 10 11 MR. BATES: I mean, the motion for fees Well, we would put the public -- the same versions of the motions that we would -- 12 THE COURT: File it in ECF. 13 MR. BATES: -- publicly available through Pacer. To 14 the extent that we felt that we had to redact some things, I 15 think -- the most important aspects of it would still be 16 publicly available. 17 THE COURT: 18 19 20 that. Have you all talked about this? MR. CHORBA: 21 22 And so I assume then you're willing to do No, Your Honor, I'm -- (Simultaneous colloquy.) MR. BATES: -- I mean, I understand where the court 23 is coming from. I think it's become clear through this 24 discussion that the concerns among the parties are much more 25 about the internal fallout in terms of having to deal with RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 25 1 questions and the -- that Facebook has than -- than from 2 counsel's side in terms of -- of disclosing our attorneys' 3 fees or trying to avoid any objections to that. 4 And we have no concern with that and -- and, again, when 5 we started looking at this process, we started from the 6 perspective that we expected to be doing notice. 7 It was only after we read all of the case law and 8 everything went the other way and I had no cases to come and 9 show you to say, this court said notice is required. 10 11 12 13 14 But the court does have discretion. There's no question about it. THE COURT: No, and -- (Simultaneous colloquy.) MR. BATES: -- think it's a matter of tailoring it to 15 the court's concerns so that -- so we avoid some of the -- the 16 detriments that the other courts have seen in this area that 17 can also address the court's concerns. 18 THE COURT: Well -- 19 MR. BATES: We're certainly open -- 20 THE COURT: My concern is less about the injunctive 21 relief, the practices that Facebook is ceasing to engage in 22 for the reasons that I already stated. 23 about that than it is about giving the parties an opportunity 24 to object if they wish to the fees that are being sought. 25 MR. BATES: My concern is less And we understand that. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 26 1 THE COURT: There are two things that an injunctive 2 relief class would have the right to object to. 3 the injunctive relief isn't broad enough and they think it 4 should go further. 5 you all have agreed to discontinue the practices that were at 6 issue here in the case. 7 One is that I'm not as concerned about that because With regard to the attorneys' fees, however, there -- 8 seems to me that we have an obligation to at least allow the 9 class members to file an objection if they wish. 10 I think what you've suggested is reasonable. Actually 11 with the posting of the -- it's not enough just to put them on 12 ECF because everybody doesn't have access to ECF -- 13 14 15 (Simultaneous colloquy.) THE COURT: Yes, they're publicly available, but you have to be a filer in order to have access. 16 Putting them on the website of the firm is different. 17 mean, a lot of people will Google a law firm and if you get to 18 the home page and if it's easily -- if you can put a link to 19 it so that it's easy enough for the -- any class members who 20 are perusing your website to find it. 21 would be adequate. 22 23 24 25 I I would think that The only thing that I would ask in addition -- you said there were four mechanisms. MR. CHORBA: Your Honor. Yeah. And I can go through that again, The publicity that this case has received, even RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 27 1 2 3 4 the settlement. Number two, the CAFA notice that goes to all appropriate State and federal officials. Number three, the -- the public ECF. 5 case is filed. 6 Everything in this But to Your Honor's point that general members of the public may not have access. 7 THE COURT: 8 MR. CHORBA: 9 respective law firms. Right. Posting on the websites of the Again, if you're -- if you're trying to 10 target this to those people who would take an interest, our 11 belief is one of those four would be far more likely to 12 actually reach interested parties than a banner ad, which is, 13 in our view, going to create a lot of confusion. 14 just get the calls. 15 get calls. 16 Counsel will get calls. And we won't The court may And in this circumstances where substantive rights are not 17 being released, where there's no opt-out, if it's just the 18 concern about -- 19 THE COURT: 20 MR. CHORBA: That's the principal concern. Again, the -- counsel's website where 21 it's there, anyone can download it. 22 that they would file before Your Honor. 23 It's the public version The class members who have taken an interest in this will 24 have the exact same information. And, Your Honor, we can post 25 the preliminary approval order with the schedule. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 I mean, 28 1 those are things I'd like to discuss with my client and 2 opposing counsel. 3 But I think that would be a way that would -- would 4 satisfy Your Honor's concern and -- and allow us to proceed 5 with wrapping up the settlement. 6 7 MR. BATES: discussed this, but we're certainly open to all of that. THE COURT: 8 9 And we're certainly -- we haven't I would be satisfied with that. But I would like something -- a filing from Facebook with regard to 10 the claim that you're making that the publicity is wide and 11 broad. 12 13 (Simultaneous colloquy.) THE COURT: I'm not necessarily privy to all of that. 14 I don't read all of these stories. 15 the Recorder or Daily Journal. 16 publicity in those two -- those two journals, even though 17 there's been some. 18 MR. CHORBA: 19 THE COURT: I only read what I get in And it hasn't been that much Right. What I'd like is some compilation or 20 reference to them so that I can be assured that, indeed, this 21 story has been covered to the extent that you say it has. 22 MR. CHORBA: And it's extensive. For a class action, 23 Your Honor, it's -- it's extensive in my experience, so we 24 will -- we will do a supplemental -- if we can have a week to 25 put that together, we'll get it on file. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 29 1 THE COURT: 2 MR. CHORBA: 3 4 Okay. And shall we do an amended proposed preliminary approval order along with it? THE COURT: Yes, that includes these items, and that 5 will give you a little time to figure out at your firm how 6 you're going to go about posting it -- 7 MR. CHORBA: 8 THE COURT: 9 That will be no problem. -- once -- once you file it. And I like the idea of including the order -- 10 MR. CHORBA: 11 THE COURT: 12 MR. CHORBA: 13 MR. BATES: Okay. 14 THE COURT: Okay? 15 All right. Okay. -- with the posting. Thank you, Your Honor. So let's see if there's anything else. On -- 16 The only other thing is I -- you know, I'm -- I've done it 17 both ways, but with regard to whether or not a class member 18 has to file something in writing before they can appear, I 19 don't generally require that. 20 If there is an objection, it's great to have them in 21 writing so that you all have advanced notice. So I don't have 22 any problem with the requirement that objections be in 23 writing, but I believe you all have included in the proposed 24 order that a class member won't be able to be heard unless 25 they've given written notice of an intention to appear. RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 30 1 No one needs to give advance notice of an intention to 2 appear. 3 objection. 4 to have filed something in advance. 5 So I'd like you to change that. 6 I always ask if there's someone who wishes to make an Every now and then, there is. I believe that's in paragraph ten. 7 MR. BATES: 8 MR. CHORBA: 9 And they don't have Okay. That's -- That's an easy fix from our perspective, Your Honor. 10 MR. BATES: And ours as well. 11 THE COURT: And do you need to also change paragraph 12 seven of the order? And that's where you would put -- that's 13 the place where you've said that you don't believe notice is 14 necessary. 15 is necessary. 16 I'm not making that finding. I think some notice It's just that the alternative to more direct notice that 17 you've suggested I am persuaded under the facts of this case 18 are probably sufficiently adequate and would help to avoid any 19 unnecessary confusion, so that's what it should say. 20 21 22 23 MR. BATES: We'll modify paragraph seven to conform THE COURT: Okay. to that. All right. Seven and ten. With regard to the dates, then, assuming that 24 preliminary approval is given a week from today, which will 25 give you time to get the amended orders in and amended notice, RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 31 1 then the proposal is fine. 2 everything by a week. 3 4 We would just have to change So the motions for final approval and attorneys' fees instead of being due May 19th would be due -- 5 THE CLERK: 26th. 6 THE COURT: 26th? 7 THE CLERK: 26th. 8 THE COURT: May 26th. 9 Objections due instead of June 19th, would be -- 10 THE CLERK: June 26th. 11 THE COURT: June 26th. 12 13 Response to objections -- I think that's two weeks later. You have July 3rd, so that would be July 10th. 14 THE CLERK: Yes. 15 THE COURT: And the hearing instead of July 26 would 16 be August 2nd; is that right? 17 THE CLERK: Yes. 18 THE COURT: How's that? 19 MR. JESSEN: 20 21 22 Give us one minute to confer with our client, Your Honor. (Pause in the proceedings.) MR. BATES: I am not available on the 2nd. I can be 23 available the -- the next week, and I'm not sure if we're 24 going to be able to cover the 2nd on my side. 25 MR. CHORBA: Is the 9th available? RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 32 1 THE COURT: The 9th, is that available? 2 THE CLERK: The 9th is available. 3 MR. CHORBA: 4 MR. BATES: Otherwise, I can check and -- 5 THE COURT: The 9th is fine. 6 MR. CHORBA: Thank you, Your Honor. 7 THE CLERK: August 9th at 9:00 a.m.? 8 THE COURT: August 9th, 9:00 a.m. 9 10 All right. That works for all of us. Then with that, I give -- grant preliminary approval. 11 MR. BATES: Thank you, Your Honor. 12 MR. CHORBA: Thank you very much. 13 MR. JESSEN: Thank you, Your Honor. 14 THE COURT: You're welcome. 15 (Proceedings were concluded at 9:54 A.M.) 16 --o0o-- 17 18 19 20 21 22 23 24 25 RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530 1 2 CERTIFICATE OF REPORTER 3 4 I certify that the foregoing is a correct transcript 5 from the record of proceedings in the above-entitled matter. 6 I further certify that I am neither counsel for, related to, 7 nor employed by any of the parties to the action in which this 8 hearing was taken, and further that I am not financially nor 9 otherwise interested in the outcome of the action. 10 11 ___________________________________ 12 Raynee H. Mercado, CSR, RMR, CRR, FCRR, CCRR 13 Monday, April 24, 2017 14 15 16 17 18 19 20 21 22 23 24 25 RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR (510) 451-7530

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