CHICAGO — A federal judge has refused to approve the settlement of a 2019 class action that alleges the parent company of the TikTok social video sharing app violated privacy laws.
Sherri Leshore and Laura Lopez sued Bytedance Technology, alleging TikTok illegally collected personal data of users younger than 13 without parental consent. In early 2020, they asked U.S. District Judge John Blakey to grant preliminary approval of a $1.1 million settlement, which would include $2,500 incentive awards, with the remainder set aside for settlement administration, legal fees and payouts to anyone 12 and younger who used the TikTok or Musical.ly apps, or their guardians.
In response to the COVID-19 pandemic, the U.S. District Court modified civil case deadlines. However, Blakey wrote in an opinion issued March 29, the plaintiffs didn’t “update the settlement website to include these new deadlines and the settlement administrator does not appear to have accepted claim forms through the new deadlines.”
The original deadline for opting out was March 17, 2020, and claim forms were to be in by April 16. The COVID-related general orders pushed back deadlines for all civil cases to at least June 2. Blakey reset a fairness hearing from May 6 to Aug. 4.
Objector “Mark S.” appeared at the fairness hearing, arguing the settlement’s notice provisions were inadequate because the settlement website didn’t display the corrected deadlines. Several weeks later Mark's lawyers asked Blakey to enforce a preliminary injunction barring proposed settlement class members from bringing claims within the scope of the settlement’s release clause.
Although Mark, father of a minor, filed his objections on time, Blakey disagreed with the plaintiffs’ assertion he couldn’t claim to be prejudiced by the deadline issues.
“The fact that one class member was not prejudiced does not absolve the parties of their obligations to the millions of others in the class,” Blakey wrote. “Clearly, other members of the class, upon seeing the incorrect deadlines featured on the settlement website, may have mistakenly believed that they had missed the opportunity to exercise their legal rights with respect to the Proposed Settlement. And the settlement administrator, operating under the wrong deadlines, may have also ignored class members who did attempt to exercise their rights in a timely fashion.”
Blakey said he couldn’t conduct a final review or approve the settlement without giving additional notice to the proposed class and conducting another fairness hearing. He said any new notice program should run at least 77 days, during which time new claim forms would have to be accepted.
The judge then rejected Mark’s motion to intervene and also his request to have his lawyer be appointed lead counsel for the class. Although his motion was timely and Mark has an interest in the proceedings, Blakey said a denial of the request to intervene doesn’t deprive him of his right to press his objections to the settlement because another fairness hearing is imminent. He also has preserved his right to appeal, and Blakey rejected the argument the lawyers representing Leshore and Lopez have been inadequate.
Leshore and Lopez are represented by attorneys Gary M. Klinger, Gary E. Mason and David K. Lietz, of the firm of Mason Lietz & Klinger, of Chicago and Washington, D.C.
TikTok is represented by attorneys Anthony J Weibell, of the firm of Wilson Sonsini Goodrich & Rosati PC, of Palo Alto, Calif., and Steven P. Mandell, of Mandell Menkes LLC, of Chicago.
While proceedings in this case continue, another federal judge in Chicago is presiding over similar litigation, also centered on allegations TikTok violated Illinois’ Biometric Information Privacy Act by analyzing images and videos to determine user ages, ethnicity and gender, to recommend content and prevent minors from using the app, all without properly obtaining consent from users or adequately documenting its data retention policy.
Lawyers representing plaintiffs in 21 consolidated class action lawsuits asked a judge to approve a $92 million settlement in that litigation, but attorneys Scott Drury and Mike Kanovitz, of the firm of Loevy & Loevy, of Chicago, filed a brief on March 1, asking the judge to reject the settlement.
The Loevy firm represents Mark S. in his objection to the smaller lawsuit.