Supreme court appears divided on Google settlement that gave to charities

Two US Google users sued the company in 2010 for sharing their search terms with third party websites. Google settled the case four years later for $8.5 million, promising to give the bulk of the money to charitable organizations with plans to improve user privacy.

But before the lawyers on both sides could finalize the deal, there was an objection.

Lawyer Theodore Frank wanted to know why none of that money was going to Google users like him. On Wednesday, the US Supreme Court heard his objections during oral arguments and seemed divided as to whether he had a point.

What’s more, some justices questioned the very idea that Google users were harmed when the company turned over their search terms to third parties without their consent.

The case has the potential to upend an unusual form of settlement that some tech companies — and other companies too — have signed onto in order to resolve legal claims against them. Called a “cy pres” award, this type of settlement goes to charitable organizations that submit proposals to address problems identified in the lawsuit.

Critics like Frank take issue with settlements that only reap cy pres awards and give no funds directly to the plaintiffs. Proponents say it’s a good solution when a settlement would only give pennies to each individual plaintiff.

In the case Frank objected to, lawyers determined each affected Google user would receive less than one dollar. But Frank said that lawyers said those numbers weren’t realistic. What’s more, he said, letting plaintiffs’ lawyers claim large fees — about $2 million in the Google case — for themselves without giving any of the settlement funds to the class members sets up “perverse incentives” for plaintiffs’ lawyers to give the money to third parties instead of their clients. 

“When courts have insisted that attorneys don’t get paid unless their clients get paid, the attorneys find a way to improve the claims process and make money get to the class,” Frank said.

Who benefits from cy pres awards?

Associate Justice Samuel Alito took issue with the idea that organizations that receive cy pres awards may engage in political advocacy that the class members don’t agree with. 

“Money is given to organizations that they may or may not like and that may or may not ever do anything that is of even indirect benefit to them,” Alito said.  “How can such a system be regarded as a sensible system?”

Chief Justice John Roberts appeared to side with Frank’s arguments, raising concerns that the organizations winning the cy pres money weren’t known for protecting online privacy and also some of them had already received money from Google. 

“Don’t you think it’s just a little bit fishy that the money goes to a charity or a 501(c)(3) organization that Google had contributed to in the past?” Roberts asked Jeffrey Lamken, an attorney for the plaintiffs who originally sued Google.

Lamken countered that the federal judge who approved the settlement found the cy pres award recipients to be appropriate. What’s more, he said, the organizations that receive funds are obligated to use the money for specific programs related to internet search privacy and not for political advocacy.

“This is targeted precisely to the type of injury and precisely the type of problem, privacy invasion, that that class is subjected to,” Lamken said.

Other justices questioned whether there was a legal basis for the Supreme Court to rule that cy pres awards shouldn’t be allowed. Associate Justice Sonia Sotomayor raised this question, adding that it appears federal courts are doing a good job of weeding out cy pres settlements that don’t benefit the class members.

“You do point to some potentially abusive situations, but in all those situations, it’s the cases where the circuit court rejected a cy pres award.” Sotomayor said. “It seems like the system is working, not not working.”

What makes a breach of privacy harmful?

Several justices wondered if they should be considering the question of cy pres awards at all. That’s because they weren’t sure the plaintiffs had any legal grounds to sue Google for privacy violations in the first place. 

That means the justices could direct the federal court where the case started to re-examine the lawsuit before the Supreme Court can make any ruling on the settlement.

The plaintiffs claimed in their lawsuit that Google harmed them by sharing their search terms in a specific circumstance. When users enter words into the Google search engine, they’ll see a list of results. Once the user clicks on one of those results and is directed to another website, that second website gets to collect the search terms the user entered. 

Associate Justice Stephen Breyer questioned whether that was harmful to Google users. The Supreme Court ruled in 2016 in a case called Spokeo v. Robins that plaintiffs in privacy lawsuits have to prove an “injury in fact,” or that there was a true harm caused by a privacy violation. That means just proving a privacy violation occurred isn’t enough to base a lawsuit on.

The federal court in the case against Google didn’t rule on whether the plaintiffs had successfully claimed they suffered an injury-in-fact. That made Associate Justice Ruth Bader Ginsberg wonder aloud on Wednesday whether that means the Supreme Court should send the case back to the federal court for a decision on that question.

Associate Justice Brett Kavanaugh, however, said he thought “common sense” shows that Google users don’t want third parties to see everything they search for.

“I don’t think anyone would want the disclosure of everything they searched for disclosed to other people,” Kavanaugh said. “That seems a harm.”

Security: Stay up-to-date on the latest in breaches, hacks, fixes and all those cybersecurity issues that keep you up at night.

NASA turns 60: The space agency has taken humanity farther than anyone else, and it has plans to go further.

Source link

more recommended stories

  • U.S. could blacklist Chinese surveillance tech firm Hikvision: NYT

    (Reuters) – The U.S. administration is.

  • U.S. eases curbs on Huawei; founder says clampdown underestimates Chinese firm

    SHANGHAI/NEW YORK (Reuters) – The United.

  • Self-driving trucks begin mail delivery test for U.S. Postal Service

    (Reuters) – The U.S. Postal Service.

  • Retailer Amazon nears victory in rainforest battle over domain name

    FILE PHOTO: Staff chat at the.

  • Infineon suspends shipments to Huawei: Nikkei

    FILE PHOTO: A close-up of the.

  • U.S. intellectual property complaints a ‘political tool’: China state media

    SHANGHAI (Reuters) – Chinese state media.

  • Exclusive: Google suspends some business with Huawei after Trump blacklist – source

    FILE PHOTO: Visitors walk past Huawei’s.

  • Huawei founder says growth 'may slow, but only slightly' after U.S. restrictions

    Huawei Technologies’ founder and chief executive.

  • Exclusive: U.S. may scale back Huawei trade restrictions to help existing customers

    (Reuters) – The U.S. Commerce Department.

  • German finance minister expects OECD deal on digital tax in 2020

    Finance Minister Olaf Scholz addresses a.

  • Lyft is sued by investors over IPO

    FILE PHOTO: The Lyft logo is.

  • GMC trucks to deploy adaptive cruise control system

    The GMC logo is seen on.

  • Baidu swings to net loss for first time since listing, shares fall

    (Reuters) – Chinese search engine operator.

  • Huawei ban clouds U.S.-China trade talks, tech sector

    WASHINGTON/BEIJING (Reuters) – A U.S. bid.

  • Tesla to update battery software following car fires

    (Reuters) – Tesla Inc will update.

  • SpaceX to launch first satellites for Musk’s Starlink internet service

    CAPE CANAVERAL, Fla. (Reuters) – Elon.

  • FCC ready to let phone companies use tools to block robocalls

    WASHINGTON (Reuters) – U.S. Federal Communications.

  • Facebook restricts Live feature, citing New Zealand shooting

    SAN FRANCISCO (Reuters) – Facebook Inc.

  • FCC to take ‘fresh look’ at opening key 5.9 GHz spectrum band

    WASHINGTON (Reuters) – The U.S. Federal.

  • Huawei is not controlled by China, executive says

    FILE PHOTO: The Huawei logo is.

  • Ex-Autonomy CFO sentenced in U.S. to 5 years prison over Hewlett-Packard fraud

    (Reuters) – The former chief financial.

  • Exclusive: Amazon rolls out machines that pack orders and replace jobs

    SAN FRANCISCO (Reuters) – Inc.

  • U.S. presidential contender Kamala Harris favors look at breaking up Facebook

    WASHINGTON (Reuters) – Democratic presidential candidate.

  • Now you can explore a cave without actually going into a cave

    CHYNOVSKA JESKYNE, Czech Republic (Reuters) –.

  • U.S. says Huawei lawyer’s prior work at Justice Department poses conflicts

    (Reuters) – Huawei Technologies Co Ltd.

  • U.S. investor awarded $75 million in cryptocurrency crime case

    NEW YORK (Reuters) – U.S. entrepreneur.

  • Facebook rejects co-founder call for breakup, senator urges U.S. antitrust probe

    WASHINGTON (Reuters) – Facebook Inc quickly.

  • AT&T’s Mexico unit loses class action lawsuit to consumer watchdog

    FILE PHOTO: The AT&T logo is.

  • Uber set to debut on NYSE, hopes to avoid Lyft’s fate

    (Reuters) – Ride services giant Uber.

  • U.S. charges Chinese national in hacks of Anthem, other businesses

    WASHINGTON (Reuters) – A federal grand.

  • Facebook rejects co-founder’s call for breakup, senator urges U.S. antitrust probe

    WASHINGTON (Reuters) – Facebook Inc quickly.

  • Chinese tech firms’ search for growth seen boosting costs in March quarter

    BENGALURU (Reuters) – Three of China’s.