A California federal judge has signed off on a $650 million settlement to end a massive class action brought against Facebook under Illinois’ biometrics privacy law, potentially queuing up payments of at least $345 to Illinois Facebook users and $97.5 million to the lawyers who brought the case to court six years ago.
On Feb. 26, U.S. District Judge James Donato granted final approval to the sprawling settlement deal, potentially bringing to a close the biggest test to date of the reach of the law known as the Illinois Biometric Information Privacy Act.
“Overall, the settlement is a major win for consumers in the hotly contested area of digital privacy,” wrote Judge Donato in his Feb. 26 order.
U.S. District Court Judge James Donato
The lawsuit was one of the first of its kind filed under the Illinois BIPA law.
It accused Facebook of violating the BIPA law, by using its so-called “Tag Suggestions” program to seek and identify people in photos uploaded by users to the social media company’s platform. The class action asserted Facebook violated the BIPA law by allegedly scanning the faces of people appearing in the photos, and then creating a template of their faces to identify them later in other photos, so as to suggest to other Facebook users to “tag” those people in their photos.
The lawsuit asserted this violated the BIPA law because Facebook did not obtain written authorization from those being tagged before scanning their images and creating a template assigned to their name.
The lawsuit further accused Facebook of failing to provide notice to users before conducting the tag suggestion facial scans.
Under the BIPA law, plaintiffs can demand damages of $1,000-$5,000 per violation, which can be defined under the law as each time a defendant allegedly scanned their facial geometry, or other biometric identifiers.
With potentially millions of Facebook users in Illinois eligible under the lawsuit, the estimated total potential payout quickly ran into the billions of dollars.
The class action was led by attorneys from the firms of Edelson P.C., of Chicago; Labaton Sucharow, of New York; and Robbins Geller Rudman & Dowd, of San Francisco and Chicago. The Edelson lawyers filed the first class action in Cook County, followed by lawsuits from the Labaton and Robbins Geller firms.
Facebook attempted to fight the lawsuit for several years after it was first filed in Cook County Circuit Court. The social media giant transferred the case to San Francisco federal court.
However, there, Judge Donato and, ultimately, the U.S. Ninth Circuit Court of Appeals ruled Facebook could not escape the lawsuit. The courts ruled that companies operating outside of Illinois can be held liable under the Illinois law, simply because they have customers in Illinois.
Further, the California federal courts, relying heavily on a decision from the Illinois Supreme Court, found the plaintiffs don’t need to show they were actually harmed by the facial image scans to bring such a massive class action under the BIPA law’s technical notice and consent provisions.
Businesses all across Illinois, and beyond, have been targeted by thousands of class actions under the BIPA law in the years since the Facebook case was first filed. The vast majority of those targeted have been employers in Illinois, hit for their use of so-called biometric timeclocks, which require workers to scan fingerprints to verify their identity when punching the clock.
In his Feb. 26 order, Judge Donato lauded the work of the plaintiffs’ lawyers. He noted the case was difficult, and tested unproven areas of the law. With no participation from any government agency, the judge described the lawyers as “private attorney generals (sic) blazing a trail in uncharted territory.”
Donato estimated the plaintiffs had only a 15% chance of success at trial. So, he characterized the $650 million payout under the settlement as a success.
He further applauded the “innovative notice and claims procedures” developed by the lawyers for both sides to reach Facebook users in Illinois eligible to participate in the class action settlement. The judge said it resulted in more than 1.57 million Illinois Facebook users submitting claims, out of a total potential class of more than 6.9 million people, a claims rate of 22%.
The judge said that represented “an unprecedentedly positive reaction by the class.”
He estimated class members, including anyone from Illinois who had a Facebook account since 2011, could receive a payment under the settlement of at least $345.
The lawyers who brought the case, however, will receive far more. Donato approved attorney fees of $97.5 million.
That amount was trimmed from the lawyers’ request for up to 16.9% of the settlement funds, as compensation for an estimated 30,000 hours spent on the case among the three firms.
Donato said the size of the settlement was too big to justify awarding the fees based on traditional benchmarks, such as “25%... typically applied in common fund cases.”
The judge said awarding $110 million, as requested by the plaintiffs’ lawyers, would equate to a rate of $3,654 per hour, which the judge said would produce “windfall profits” for the lawyers, and “is not reasonable by any measure.”
“It is simply a matter of fairness and proportion,” Donato wrote. “A 25% presumption is too big to be applied to common funds as large as this one.
“The lawyers will be well paid, and no one could rationally say otherwise about the award the Court makes below, but the starting point of the analysis should not be the equivalent of a Willy Wonka golden ticket.”
The judge further awarded $5,000 payments to each of the three named plaintiffs in the consolidated class action, identified as Carlo Licata, Nimesh Patel and Adam Pezen.
Facebook has been represented by attorneys Vincent J. Connelly, of the firm of Mayer Brown, of Chicago, and Michael J. Graham and Jeffrey Gutkin, of Cooley LLP, of San Francisco, among others.
The plaintiffs’ case was led by attorneys Jay Edelson, of Edelson P.C.; Paul J. Geller, of the Robbins Geller firm; and Ross M. Kamhi, Lawrence A. Sucharow, Joel H. Bernstein and Corban S. Rhodes, of Labaton Sucharow, according to federal court records.