In In re Google Inc., No. 17-1480, 2019 U.S. App. LEXIS 23467, at *2-5 (3d Cir. Aug. 6, 2019), the Court of Appeals for the Third Circuit remanded the Google class action “cy-pres only” settlement back to the District Court for further evaluation.
The defendant, Google Inc., created a web browser “cookie” that tracks an internet user’s data (think following the trail of cookie crumbs). For some Safari or Internet Explorer browser users, the cookie may have operated even if the user configured privacy settings to prevent it from tracking data. The class plaintiffs claim Google invaded users’ privacy under the California constitution and the state tort of intrusion upon seclusion (meaning the intrusion into a private place, conversation, or matter in a highly offensive manner). In a disputed Rule 23(b)(2) class settlement, [*4] Google has agreed to stop using the cookies for Safari browsers and to pay $5.5 million to cover class counsel’s fees and costs, incentive awards for the named class representatives, and cy pres distributions, without directly compensating any class members. The six cy pres recipients are primarily data privacy organizations, and all must agree to use the funds to research and promote browser privacy. In addition, Google would obtain, among other things, a class-wide release of all class-member claims, including for money damages that did or could stem from the subject matter of the litigation. The lone objector, Theodore H. Frank, challenges the District Court’s certification of a settlement class and the terms of the approved settlement. He argues that the cy pres money properly belongs to the class as compensation. He asks us to vacate the settlement as unfair and require direct distributions to class members before resorting to cy pres awards. In the alternative, if direct distributions are truly infeasible, he asserts the class should not have been certified due to inadequate representation. Frank also challenges the parties’ choice of cypres recipients because of their pre-existing relationships with Google and class counsel. We believe that, in some Rule 23(b)(2) class actions, a cy pres-only settlement may properly be approved. But here the District Court’s cursory certification and fairness analysis were insufficient for us to review its order certifying the class and approving the settlement. The settlement agreement’s broad release of claims for money damages and its designation of cy pres recipients are particularly concerning. We thus vacate the order approving the settlement and remand for further proceedings consistent with this opinion.