It’s back to the drawing board for those clever plaintiffs’ attorneys who brought a class action against Facebook for its “Sponsored Stories” program. We previously blogged about the proposed settlement here, wherein the attorneys were slated to earn $10 million for their efforts, public interest groups–many of whom opted not to take a stance on the settlement (and did we mention may possibly be “friendly” with Facebook?)–were to receive another $10 million in cy pres damages, and plaintiffs could expect to receive a weakly worded promise “not to do that again.”
In this case Judge Seaborg indicated it would be appropriate to increase the cy pres award. And, whatever one’s opinion of cy pres awards in general, he fairly raised the point that if they are to act as a substitute for plaintiff compensation, the substitute must be necessary and adequate.
Finally, Judge Seaborg not so subtly noted the circumspect equation the plaintiffs’ lawyers used to determine their fee, remarking, “Plaintiffs have presented no reason in logic or law that supports calculating the value of the injunctive relief in such a manner.” Hopefully, various courts’ willingness to more carefully assess proposed settlements will serve as a warning for the lawyers in round two, and the inevitable future cases to come.