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)

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 [phone]

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 [phone]

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 [phone]

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 [phone]

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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 [phone]

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 [phone]

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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 [phone]

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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 [phone]

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 [phone]

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 [phone]

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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 [phone]

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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 [phone]

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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 [phone]

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 [phone]

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 [phone]

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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 [phone]

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 [phone]

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 [phone]

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 --

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THE COURT:

It would sow confusion.

So are you suggesting, though, that in

RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR [phone]

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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.

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we've -- it's been an expensive case to litigate, and -- and

16

additional money on top of that is problematic.

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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.

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updated the data policy which everyone at Facebook gets
RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR [phone]

We've

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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.

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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.

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MR. CHORBA:

17

this issue just very briefly?

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fine job, and Mr. Bates have (sic) as well articulating our

19

position.

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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

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is something we'll have to discuss with our client.

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something we'll want to meet and confer with plaintiffs about.

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But -- And I'm happy to submit this, but in another case that
RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR [phone]

This is

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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

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website and the counsel here -- both lawyers have on their

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website pages dedicated to this case.

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post the attorneys' fees motions on that website and viewed

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that as an appropriate form of notice.

He required them to

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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

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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 [phone]

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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:

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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 --

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MR. CHORBA:

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THE COURT:

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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.

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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

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a case with PepsiCo where Judge Chen found that convincing.

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Again, he had your concerns, how are people going to know

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about this, where would people go.

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avenues I would just submit to Your Honor I think are

And, again, those four

RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR [phone]

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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 --

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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.

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THE COURT:

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that.
Have you all talked about this?
MR. CHORBA:

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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 [phone]

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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.

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11
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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.

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THE COURT:

Well --

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MR. BATES:

We're certainly open --

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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.

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MR. BATES:

My concern is less

And we understand that.

RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR [phone]

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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.

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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 [phone]

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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 [phone]

I mean,

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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.

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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 [phone]

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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 [phone]

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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 [phone]

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 [phone]

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.)

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--o0o--

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RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR [phone]

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CERTIFICATE OF REPORTER

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4

I certify that the foregoing is a correct transcript

5

from the record of proceedings in the above-entitled matter.

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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

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otherwise interested in the outcome of the action.

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___________________________________

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Raynee H. Mercado, CSR, RMR, CRR, FCRR, CCRR

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Monday, April 24, 2017

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RAYNEE H. MERCADO, CSR, RMR, CRR, FCRR [phone]