Cy Pres Settlements – Justice Roberts’ opinion in the Facebook Beacon privacy class-action litigation

The appeal to the US Supreme Court took an interesting turn in the Facebook Beacon litigation (Marek v. Lane). The case has wound its way through the Ninth Circuit and to a petition for writ of certiorari with the Supreme Court that was denied November 4, 2013. Unlike most cases where the denial of a petition is made without comment, Chief Justice Roberts issued a relatively lengthy four-page statement (link below). Not only does the Chief Justice’s statement provide a helpful summary of the background of the Beacon program, the eventual “cy pres” settlement and the appeal, it also strongly suggests the Supreme Court will consider the cy pres settlement model in the near future when they locate an appropriate case. In fact, the reason Chief Justice Roberts agrees with denying the petition in this case is that it was too narrow a vehicle and may not have allowed the court to consider fundamental questions as to whether such settlements should ever be allowed or, if allowed, the tests and limits that should be placed upon their usage. In the Facebook case, much criticism was launched at the fact that the cy pres remedy agreed to by the parties entailed the establishment of a new charitable foundation that would help fund organizations dedicated to educating the public about online privacy, and a Facebook representative would be one of the three members of the new foundation’s board. Looking ahead in light of the Roberts pronouncement, and given that the class members in privacy cases are typically customers of the defendants, the customer and public relations aspects of the settlement structure and relief take on a significant importance and should be considered when framing an appropriate settlement, including whether to chose a cy pres structure and if so, how and to whom the donations resulting from the settlement are allocated.

View the full story and the Supreme Court opinion (source: Forbes).

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Natalie Spears

About Natalie Spears

Natalie Spears is a trial lawyer and represents clients in courts across the US in a wide range of matters, including consumer class actions, IP, media and advertising disputes, complex commercial and real estate litigation. She is lauded by clients as “tenacious and pragmatic” and is recognized for her courtroom achievements. As head of Dentons’ global Technology, Media and Telecommunications sector and a former member of the US Board, Natalie sets direction for the firm’s commitment to exceptional client service.

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