Facebook Settles Decade-Long Data Privacy MDL for $90M

A privacy lawsuit against Meta Platforms Inc., formerly Facebook Inc., has edged towards resolution after the user plaintiffs filed an unopposed motion asking for approval of their proposed settlement on Tuesday. The agreement includes both a $90 million non-reversionary fund for the class as well as injunctive relief requiring Facebook to sequester and delete the data the plaintiffs allege was wrongfully collected.

The information privacy class action argued that Facebook stored certain users’ cookies and tracked their activity on websites outside of Facebook containing a “like” button, even when they were logged out of the social media platform. Additionally, they asserted that Facebook illegally sold their personal profiles and browsing histories to advertisers. The plaintiffs brought claims under the Federal Wiretap Act, the California Invasion of Privacy Act, and other state and common laws.

This week’s motion for preliminary approval notes that the case has had significant positive impacts for user data privacy even without the proposed settlement. It cites the Ninth Circuit’s April 2020 ruling that reportedly resolved a circuit split. Therein, the panel held that “when personal data is unlawfully copied and monetized, the result is economic harm (not just privacy harm) even if the value of the data in plaintiffs’ hands does not diminish,” the motion says.

In addition, the court reportedly confirmed that Facebook was not a party to the communications it allegedly intercepted in the context of the plaintiffs’ Wiretap Act claim, confirming that such data collection requires actual consent. 

Unhappy with the Ninth Circuit result, Facebook appealed to the Supreme Court. Without explanation, the court denied its petition last year. Thereafter, the motion reports that the parties engaged in negotiations leading to the instant settlement, which the plaintiffs argue should receive judicial approval. 

As to the monetary relief, the plaintiffs aver that the eight-figure settlement is one of the ten largest in data privacy class action history. The injunctive relief, the motion says, affords the plaintiffs the “gold standard” of remediation in data privacy class actions alleging improper data collection.

Counsel for the plaintiffs stated that they intend to ask the court for attorneys’ fees totalling up to 29% of the settlement fund, or $26.1 million, in addition to reimbursement of reasonable out-of-pocket expenses.

The plaintiffs are represented by DiCello Levitt Gutzler LLC, Grygiel Law LLC, and  Simmons Hanly Conroy LLC. Facebook is represented by Cooley LLP.