Without tackling the underlying merits of the case, the Attorneys General of Alaska, Arizona, Arkansas, Louisiana, Mississippi, Missouri, Nevada, Oklahoma, Rhode Island, Tennessee, and Wisconsin asked the Third Circuit to reverse approval of a $5.5 million settlement involving consumer privacy claims against Google.   Relying on Fed. R. Civ. P. 23(e)’s prohibitions against unfair settlements, the AG’s argued in their July 5, 2017 brief, the proposed cy pres settlement fund would be unfair given consumers would not receive a dime from these settlements.

In their brief, the AG’s point out that because “class members extinguish their claims in exchange for settlement funds, the funds belong to class members.”  Brief at 5.  And, simply giving these proceeds to various privacy rights groups chosen by Google and class counsel would be unfair to the actual class members.

The underlying multidistrict lawsuit – which was previously before the Third Circuit (In re: Google Inc. Cookie Placement Consumer Privacy Litigation), was filed in 2012 and alleges that Google deliberately circumvented default privacy settings used to prevent advertisers from tracking the browsing activities of persons using Safari and Internet Explorer.

Google is no stranger to cy pres funds pegged at $5.5 million.  In August 2016, Google settled a privacy suit by paying $5.5 million into a cy pres fund benefiting some of the same privacy groups looking to benefit from this latest settlement.  And, years earlier Google and Quantcast settled yet other privacy matters by way of a cy pres fund.

A cy pres fund provides the best of both worlds for defendants such as Google – it allows resolution of costly disputes while being able to fund non-profit organizations that ultimately help their cause.  Moreover, they have willing partners in class counsel given it really does not matter if an unnamed class plaintiff sees compensation so long as the settlement is approved and counsel’s fees are paid.  Hopefully, the United States Court of Appeals for the Third Circuit issues a well-reasoned opinion that guides courts around the country on this very troublesome practice.