Meta Settles Consumer Privacy MDL for Record-Setting $725M

Late last week, the plaintiffs prosecuting multidistrict litigation against Facebook styled In re Facebook Inc. Consumer Privacy User Profile Litigation moved to settle the case for $725 million, the largest recovery ever achieved in a data privacy class action and the most Facebook has ever paid to resolve a private class action, the filing said. The proposed settlement comes after four years of litigation and following revelations that Meta Platforms, then Facebook, abused user data in ways that were neither consensual, nor that it disclosed.

The filing explains that the Judicial Panel on Multidistrict Litigation consolidated data privacy suits brought by Facebook users in July 2018. In September 2019, following two rounds of extensive briefing and hearings, Judge Vince Chhabria issued an order granting in part and denying in part Facebook’s motion to dismiss the operative complaint.

The court categorized the claims into four categories of alleged wrongdoing, some of which concerned third-party access to user data, Facebook’s practice of sharing sensitive information with business partners without disclosing that practice to users or their friends, and the company’s purported “failure to restrict or monitor third parties use of Facebook users’ sensitive information, in spite of its stated policies.”

The court found that most “friend sharing” claims were inactionable as Facebook disclosed the practice of sharing friend lists for at least some of the time period at issue. Judge Chhabria also narrowed the claims about failure to restrict and monitor third-party use of user data, finding them potentially barred by contractual provisions waiving liability for ordinary negligence. However, the plaintiffs’ contract, other negligence, statutory, and some privacy claims were upheld. 

Thereafter, the parties engaged in a lengthy and thorough discovery process. The settlement motion said that over three years, the plaintiffs served 99 interrogatories, 54 requests for admission, and 90 requests for production on Facebook.

The filing also noted that unlike other consumer MDLs, this one presented extraordinary challenges because of the secrecy surrounding Facebook’s data sharing practices and the plaintiffs’ difficulty “seeking discovery about entirely unknown categories of data and data processing, learning about Facebook’s proprietary systems without knowing the language Facebook uses to describe them.”

Following mediation, the parties reached resolution. In addition to the monetary relief, Meta will continue to adhere to data sharing practice changes in accordance with a 2020 FTC Consent Order. According to the plaintiffs’ motion, the provisions set forth by the FTC’s consent order themselves “cover the injunctive relief Plaintiffs would have otherwise sought.”

A video hearing is scheduled for March 2 before Judge Chhabria.

Keller Rohrback L.L.P. and Bleichmar Fonti & Auld LLP are co-lead counsel for the plaintiffs. Facebook is represented by Gibson, Dunn & Crutcher LLP.