[Facebook] Beacon Class Action Lawyers Awarded $2.3MM in Fees

Lane v. Facebook, Case No. 08-3845 RS (N.D. Cal.) (Order re Attorney Fees)

The lawsuit over Facebook's ill-fated Beacon program generated three lawsuits, a lot of wrangling by class action lawyers, and more than a few blog posts (e.g., "Beacon Class Action Settlement Approved;" "Stop Saying 'We Can Amend This Agreement Whenever We Want'!;" "Texas Class Action Aims to Derail Facebook Beacon Settlement"). Judge Seeborg recently approved the settlement, which included the formation of a privacy foundation funded by Facebook. (Here's an earlier post of mine summarizing the then-proposed terms of the settlement.)The one item pending was the amount of fees which class counsel would be entitled to.

Judge Seeborg issued an order on Monday awarding plaintiffs' counsel $2,322,763.00 in fees and $42,210.58 in costs, for a total award of $2,364,973.58. Counsel expended approximately 2500 hours of work on the case, and sought a multiplier of 2.4. The court ruled that a multiplier of 2 was appropriate. The court also found that the hours attributable to the Harris plaintiffs should be "excised," given that "those attorneys attempted to derail the settlement of [Lane v. Facebook] at the preliminary approval stage, before later coming to support it."

[For an explanation of the lawsuit brought by a second group of plaintiffs (Harris v. Facebook) who initially objected to the settlement, check out this post: "Texas Class Action Aims to Derail Facebook Beacon Settlement."]

Although several of the named plaintiffs recovered nominal amounts for their efforts, the class members recovered zero dollars as part of this settlement. The settlement was heralded because it brought significant non-monetary benefits: (1) the establishment of a privacy foundation and (2) a change in Facebook's behavior. Given recent events, I'm sure many are probably left questioning the efficacy of one or both of these.

[cross posted at Prof. Goldman's]
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  • 6/1/2010 4:29 AM CALACTX wrote:
    Not sure this settlement should be heralded! It is another example of the abuses in today's class action system!
    Class action lawsuits were intended to speed the handling of multiple cases by allowing individuals with the same grievances to file a single claim. They were supposed to be the little guy’s best shot for justice. Now, however, they have become the personal injury lawyer’s best shot at a big payday. Don’t get me wrong, some class actions have had positive results for consumers, forcing product recalls or changes and stopping discriminatory behavior. But unfortunately, class actions are increasingly becoming a tool for personal injury lawyers to “cash in” in the name of consumer rights.
    Some class action lawsuits are a ploy to force deep pockets to settle with a large payout. In many instances the mere certification or approval of a group of plaintiffs is being used as a hammer to force a defendant into settling the case. And most businesses, regardless of whether they are actually guilty of any wrongdoing, would rather settle to bring a relatively quick end to a lawsuit, than have a costly lawsuit drag on for years.
    As the class action system now stands, it makes losers out of all but the personal injury lawyers. Businesses clearly lose as they pay more and more to fend off litigation and consumers - on whose behalf these suits are filed – lose when they get pocket change or coupons and end up paying more for goods and services as businesses pass on litigation costs. A system in which the lawyers are the only winners is a system that needs reform.
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