Campbell v. Facebook, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
MATTHEW CAMPBELL; MICHAEL No. 17-16873
HURLEY, on behalf of themselves
and all others similarly situated, D.C. No.
Plaintiffs-Appellees, 4:13-cv-05996-
PJH
v.
FACEBOOK, INC., OPINION
Defendant-Appellee,
v.
ANNA W. ST. JOHN,
Objector-Appellant.
Appeal from the United States District Court
for the Northern District of California
Phyllis J. Hamilton, Chief Judge, Presiding
Argued and Submitted January 18, 2019
Submission Vacated June 4, 2019
Resubmitted March 3, 2020
San Francisco, California
Filed March 3, 2020
Before: J. Clifford Wallace, Richard R. Clifton,
and Michelle T. Friedland, Circuit Judges.
2 CAMPBELL V. ST. JOHN
Opinion by Judge Friedland
SUMMARY *
Objector / Class Action Settlement
In an appeal brought by an objecting class member, the
panel affirmed the district court’s approval of a settlement
between Facebook and a nationwide class of its users who
alleged that Facebook routinely used website links in users’
private messages without their consent in violation of federal
and California privacy laws.
Facebook acknowledged in the settlement agreement
that it had already made several changes to the practices
challenged in this action, and it agreed to add a disclosure to
a Help Center page on its website for a year. The district
court, over the objector’s challenge, found the settlement to
be fair and approved it; and granted in full class counsel’s
request for $3.89 million in fees and costs.
As a threshold matter, the panel held that the plaintiff
class had Article III standing to bring the case. First, the
panel held that the plaintiffs identified a concrete injury.
Specifically, the panel concluded that the plaintiffs identified
a concrete injury by claiming that Facebook violated the
federal Electronic Communications Privacy Act and the
California Invasion of Privacy Act when it intercepted,
catalogued, and used without consent URLs that users had
shared in private messages. Second, the panel held that the
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
CAMPBELL V. ST. JOHN 3
plaintiffs established standing to seek injunctive relief, and
post-filing developments did not moot this case. The panel
concluded that the district court had jurisdiction to approve
the settlement, and the panel therefore had jurisdiction to
review the merits of that decision.
The panel rejected the objector’s challenges to the
substantive fairness of the settlement. First, the panel
rejected the argument that the settlement was invalid because
the class received only “worthless injunctive relief.” Koby
v. ARS National Services, Inc., 846 F.3d 1071, 1081 (9th Cir.
2017). The panel held that the district court did not clearly
err in finding that the settlement’s injunctive relief had value
to absent class members. Moreover, the class did not need
to receive much for the settlement to be fair because the class
gave up very little. Second, the panel rejected the objector’s
argument that the settlement was invalid under In re
Bluetooth Headset Products Liability Litigation, 654 F.3d
935 (9th Cir. 2010), because it prioritized class counsel’s
interests over those of their clients. The panel held that the
district court looked at the Bluetooth warning signs of
possible collusion between class counsel and Facebook, and
the district court did not abuse its discretion in concluding
that none of the warning signs weighed against approval of
the settlement. The panel concluded that applying the
Bluetooth framework did not demonstrate that the settlement
in this case was unfair.
4 CAMPBELL V. ST. JOHN
COUNSEL
Adam Ezra Schulman (argued), Anna St. John, and
Theodore H. Frank, Center for Class Action Fairness,
Washington, D.C.; for Objector-Appellant.
Hank Bates (argued), Allen Carney, and David Slade,
Carney Bates & Pulliam PLLC, Little Rock, Arkansas;
Michael W. Sobol, David T. Rudolph, and Melissa Gardner,
Lieff Cabraser Heimann & Bernstein LLP, San Francisco,
California; Rachel Geman and Nicholas Diamand, Lieff
Cabraser Heimann & Bernstein LLP, New York, New York;
for Plaintiffs-Appellees.
Christopher Chorba (argued), Joshua A. Jessen, Ashley M.
Rogers, and Ryan S. Appleby, Gibson Dunn & Crutcher
LLP, Los Angeles, California, for Defendant-Appellee.
Marc Rotenberg, Alan Butler, and Sam Lester, Electronic
Privacy Information Center, Washington, D.C., for Amicus
Curiae Electronic Privacy Information Center (EPIC).
OPINION
FRIEDLAND, Circuit Judge:
Objecting class member Anna St. John (“Objector”)
appeals from the district court’s approval of a settlement
between Facebook and a nationwide class of its users who
alleged that Facebook routinely captured, read, and used for
several purposes the website links included in users’ private
messages without their consent, and that these practices
violated federal and California privacy laws. After years of
litigation that included lengthy discovery, four mediation
CAMPBELL V. ST. JOHN 5
sessions, and Facebook’s failed attempts to convince the
district court to dismiss the case or deny class certification,
the parties reached a settlement. Facebook acknowledged in
the settlement agreement that it had already made several
changes to the practices challenged in this action, and it
agreed to add a disclosure to a Help Center page on its
website for a year. The settlement agreement also provided
that class counsel could apply for court approval of up to
$3.89 million in attorney’s fees and costs, and that Facebook
would not take any position on that application. The district
court, over Objector’s challenge, found the settlement to be
fair and approved it. The district court also granted in full
class counsel’s request for $3.89 million in fees and costs.
Addressing Objector’s appeal from the district court’s
approval of the settlement, we first consider whether
Plaintiffs had standing to bring this action and whether it
later became moot. We conclude that the district court had
jurisdiction, and, accordingly, that we have jurisdiction to
evaluate the fairness of the settlement. Second, we reject on
the merits Objector’s contentions that the district court
abused its discretion by approving the settlement.
I.
A.
“Facebook operates one of the largest social media
platforms in the world, with over one billion active users.
About seven in ten adults in the United States use
Facebook.” Patel v. Facebook, Inc., 932 F.3d 1264, 1267
(9th Cir. 2019) (citations omitted), cert. denied, No. 19-706
(U.S. Jan. 21, 2020). Facebook has a messaging function on
its platform that allows users to send electronic messages to
one or more other users. Facebook explains on its website
that these messages are “private” because their contents and
6 CAMPBELL V. ST. JOHN
history are viewable only by the sender and his or her chosen
recipients—in contrast to, for example, posts shared with a
broader audience, such as all of the user’s Facebook friends.
In December 2013, Matthew Campbell and Michael
Hurley (“Plaintiffs”) filed a putative class action against
Facebook. Plaintiffs alleged that Facebook scanned their
private messages looking for links to web pages, also known
as URLs, contained in those messages. They alleged that if
a message contained a URL, Facebook would collect that
information and use it in a variety of ways without the user’s
consent.
The main allegations concerned how Facebook
integrated these private message URL shares into a feature
that enabled third parties to show on their own websites a
count of how many Facebook users had “Liked” the pages
on their sites—a proxy for those pages’ popularity. Plaintiffs
alleged that Facebook would increase a page’s “Like”
counter not only when a Facebook user affirmatively pressed
a “Like” button, but also when the user sent a private
message containing a URL corresponding to the page,
regardless of what the message said about the URL. 1
Plaintiffs also alleged that Facebook used the private
message URL data that it was collecting to help build
profiles of individual users that could facilitate, among other
things, targeted advertising on Facebook.
Plaintiffs contended that Facebook’s handling of their
messages amounted to interception and use of electronic
communications in violation of Title I of the Electronic
1
Plaintiffs did not allege that it was possible for users or third parties
to tell anything from the “Like” counter other than the total number of
users whose activity had resulted in a “Like” counter increase.
CAMPBELL V. ST. JOHN 7
Communications Privacy Act (“ECPA”), 18 U.S.C. § 2510et seq., 2 and the California Invasion of Privacy Act
(“CIPA”), Cal. Penal Code § 630 et seq. They also alleged
that it amounted to an unlawful, unfair, or fraudulent
business practice under the California Unfair Competition
Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq.
Plaintiffs sought damages as well as declaratory and
injunctive relief.
Facebook filed a motion to dismiss, which the district
court granted in part and denied in part. The district court
dismissed the UCL claim and a portion of the CIPA claim,
but it declined to dismiss the ECPA claim and the portion of
the CIPA claim alleging interception and use of
communications in violation of California Penal Code
section 631. The district court also rejected Facebook’s sole
jurisdictional argument: that the prayer for injunctive relief
should be stricken for failure to allege ongoing or future
injury. 3
The parties engaged in extensive discovery, which
included the production of tens of thousands of pages of
documents, depositions of eighteen fact and expert
witnesses, hundreds of hours of analysis of Facebook’s
2
Title I of ECPA amended the federal Wiretap Act. For this reason,
the provisions at issue in this case are often also referred to as part of the
Wiretap Act.
3
Specifically, Facebook pointed out that Plaintiffs had not alleged
that the “Like” counting practice was still in place. The district court
held that Plaintiffs had sufficiently alleged that, even if Facebook had
temporarily stopped that practice, Facebook was likely enough to inflict
future injury in a similar manner to support standing to seek injunctive
relief.
8 CAMPBELL V. ST. JOHN
source code, and significant briefing about discovery
disputes.
Plaintiffs moved for certification of a damages class
under Federal Rule of Civil Procedure 23(b)(3), and in the
alternative an injunctive and declaratory relief class under
Rule 23(b)(2). Facebook opposed the motion, arguing that
Plaintiffs failed to satisfy Rule 23’s requirements—but not
arguing that the court lacked jurisdiction. 4 In May 2016, the
district court granted the motion in part and denied it in part.
The court denied certification of a damages class. It
explained that Plaintiffs had proposed two methods for
calculating damages but that neither was acceptable. One of
Plaintiffs’ proposals was to measure Facebook’s profits from
intercepting and using URL data from messages. The court
explained, however, that Plaintiffs’ proposed methodology
had unjustifiably assumed that all interceptions resulted in
the same profit, which made the model too inaccurate.
Plaintiffs’ other proposal was to award statutory damages,
which fared no better. The court reasoned that it would be
required to either award the full statutory sum or nothing, but
“many individual damages awards [of that full sum] would
be disproportionate” to the small amount of harm suffered
by many class members. It held that class treatment was
4
Facebook included two statements in its opposition to Plaintiffs’
class certification motion that gestured toward standing: (1) that the
testimony of one (but not both) of the named Plaintiffs “calls into
question his standing under Article III to seek injunctive relief”; and
(2) that “Facebook also reserves its rights pursuant to [the Supreme
Court’s then-pending decision in the case that would ultimately be issued
a few months later as Spokeo, Inc. v. Robins (Spokeo I), 136 S. Ct. 1540(2016)].” Although Facebook has argued that these statements “raised
[the] issue [of jurisdiction] at class certification,” neither was in fact an
argument that jurisdiction was lacking.
CAMPBELL V. ST. JOHN 9
inappropriate because “sorting out those disproportionate
damages awards would require individualized analyses.”
The district court granted certification of an injunctive
and declaratory relief class. The certified class
encompassed:
All natural-person Facebook users [aside
from those excluded through standard
carveout provisions] located within the
United States who have sent, or received
from a Facebook user, private messages that
included URLs in their content (and from
which Facebook generated a URL
attachment), from [December 2011] up
through the date of the certification of the
class.
In the class certification order, the district court observed
that Plaintiffs had focused their claims on three specific uses
of the URL data that had been collected from private
messages: (1) Facebook’s counting URL shares as a “Like”
of the relevant third-party web page; (2) Facebook’s sharing
data regarding URLs in messages with third parties, enabling
those third parties to generate customized content and
targeted advertising on their own websites informed by this
data; and (3) Facebook’s use of the URL data to generate
recommendations for other Facebook users. The district
court concluded that although Plaintiffs had made
allegations in their complaint about the first of these uses and
“arguably” about the third, they had not specifically alleged
the predicate for the second use, “sharing of data with third
parties.” But the district court further concluded that
Plaintiffs’ decision to focus on all three of these uses of URL
data was “based on a review of discovery that was not
10 CAMPBELL V. ST. JOHN
available at the time of the complaint’s filing.” The district
court therefore permitted Plaintiffs to represent the class in
challenging all three uses, and it directed them to file a
conforming amended complaint (which they then did).
The parties expended significant effort to try to settle this
case. Several months after the motion to dismiss ruling, they
participated in a full-day mediation session. The parties
returned to the negotiating table after the district court’s May
2016 order certifying an injunctive and declaratory relief
class. During the last several months of 2016, the parties
attended a total of three mediation sessions and continued to
negotiate informally. About a week before the fact
discovery period was scheduled to close, the district court
approved the parties’ stipulation to stay discovery and vacate
existing deadlines to facilitate their settlement efforts.
Shortly thereafter, in December 2016—almost two years
into the parties’ extensive discovery—the parties reached an
agreement in principle during their fourth mediation session.
A few months later, the parties executed a written settlement
agreement, which they then submitted to the district court for
approval.
In the settlement agreement, Facebook acknowledged
that it had at one point used the URL data in the three ways
the district court had described in its class certification
order—but it also represented that it had since stopped each
of them. Two of the data uses had ceased before this action
was filed in late 2013: in December 2012, Facebook stopped
using private message URLs to increase “Like” counts, and,
in October 2012, Facebook stopped sharing with third party
websites “information about URL shares in Facebook
messages . . . and attendant statistics and demographic
information.” The third use, which the settlement agreement
specified was related to Facebook’s using the URL data in
CAMPBELL V. ST. JOHN 11
its Recommendations Feed, ceased in July 2014, several
months after this action was filed. Facebook further
represented that these three uses had relied on “anonymous,
aggregate” information curated from the URL shares.
Facebook separately confirmed that, as of the date of the
settlement, it was not using any private message URL data
for targeted advertising (as Plaintiffs had initially alleged)
and was not sharing with third parties any personally
identifying user information associated with the URL data.
The settlement agreement further described “enhanced
disclosures and practice changes” that Facebook had made
after this case was filed. The agreement pointed out, for
example, that Facebook had revised its Data Policy about a
year after this action was filed to state that Facebook collects
the “content and other information” that users provide when
they “message or communicate with others,” and to further
explain the ways in which Facebook may use that
information.
Facebook agreed as part of the settlement to display for
one year a new twenty-two-word disclosure in the Help
Center portion of its site, stating: “We use tools to identify
and store links shared in messages, including a count of the
number of times links are shared.” 5 Although Facebook
promised to display this Help Center disclosure for a year, it
did not say that it would continue to refrain from any of the
uses of URL data described above. Nor did Facebook
promise to continue using the version of the Data Policy
adopted after this action was filed. The agreement did not
provide for monetary compensation to class members other
5
The agreement provided “that Facebook may update the
disclosure[] to ensure accuracy with ongoing product changes.”
12 CAMPBELL V. ST. JOHN
than the two named Plaintiffs, each of whom was permitted
to apply to the court for an award not to exceed $5,000.
In exchange, class members were required to release
their declaratory and injunctive relief claims. Absent class
members did not, however, release any “claims for monetary
relief, damages, or statutory damages.” Only the named
Plaintiffs released their damages claims.
The agreement provided that class counsel could request
that the court award attorney’s fees and costs of up to
$3.89 million—an amount that the parties represented had
been negotiated after and independent of the other settlement
terms and constituted a significant reduction from the more
than $7 million that class counsel claimed would fully
compensate them for their work on the case. Facebook
agreed not to object to that request and to pay any amount
the court approved up to this $3.89 million cap.
The district court granted preliminary approval of the
settlement. Although the parties had agreed that it was
unnecessary to provide notice to the class beyond what was
already publicly available (primarily through news
coverage), the court rejected that proposition. It held that
class counsel would be required to post information about
the settlement on their public websites during the period
between preliminary approval and a final fairness hearing.
Objector Anna St. John, who is a member of the class
and an attorney at the Center for Class Action Fairness, filed
an objection to the settlement. Following a final fairness
hearing, the district court approved the settlement.
Evaluating the settlement using the factors outlined in
Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir.
1998), the district court reasoned that “[t]he settlement offers
immediate, tangible benefits directed to the three uses of
CAMPBELL V. ST. JOHN 13
URLs challenged by Plaintiffs, without requiring class
members to release any claims for monetary damages that
they may have against Facebook.” The court also explained
that “the relief to the class must be viewed against the likely
rewards of litigation,” and observed that “proceeding with
litigation would be very risky for the class.” In addition, the
court emphasized that the settlement was “the result of four
in-person, arms’-length mediations before two different
mediators,” that both sides were able “to negotiate the
settlement on a fully-informed basis,” and that “[c]lass
counsel [are] highly experienced.”
The district court also granted the full $3.89 million in
attorney’s fees and costs for which class counsel had applied.
In addition to deeming the amount “reasonable” in light of
the results obtained for the class and counsel’s substantial
investment of time and resources on a contingency basis, the
court determined, based on an assessment of the factors
listed in In re Bluetooth Headset Products Liability
Litigation, 654 F.3d 935, 947 (9th Cir. 2011), that this
portion of the settlement agreement did not indicate
collusion among the negotiating parties at the expense of
absent class members.
Objector timely appealed the district court’s approval of
the settlement.
B.
After oral argument in this appeal, the Supreme Court
issued Frank v. Gaos, 139 S. Ct. 1041, 1045–46 (2019) (per
curiam), which vacated the final approval of a class action
settlement and remanded for an assessment of Article III
standing under Spokeo, Inc. v. Robins (Spokeo I), 136 S. Ct.
1540 (2016). In Gaos, the plaintiffs had claimed that Google
violated the Stored Communications Act by transmitting
14 CAMPBELL V. ST. JOHN
information to third-party websites about the search terms
users had entered to arrive at those websites. See 139 S. Ct.
at 1044. Although the Supreme Court had granted certiorari
intending to resolve a question about use of cy pres awards
in class action settlements, 6 the Court did not reach that issue
“[b]ecause there remain[ed] substantial questions about
whether any of the named plaintiffs ha[d] standing to sue in
light of [Spokeo I].” Id. at 1043–44. The Court explained
that federal courts’ “‘obligation to assure ourselves of
litigants’ standing under Article III’ . . . extends to court
approval of proposed class action settlements.” Id. at 1046(quoting DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 340
(2006)).
Because of the possibility that this case would present
“substantial questions” about standing like the ones the
Court identified in Gaos, id. at 1043, we requested and
received supplemental briefing from the parties about the
effect, if any, of Spokeo I on jurisdiction in this case.
II.
To establish standing, plaintiffs must show that they
have suffered an injury in fact that is fairly traceable to the
challenged conduct of the defendant and is likely to be
redressed by a favorable judicial decision. Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560–61 (1992). Injury in fact is “the
6
Cy pres refers to a method for distributing unclaimed settlement
funds “to the ‘next best’ class of beneficiaries.” Nachshin v. AOL, LLC,
663 F.3d 1034, 1036 (9th Cir. 2011). “Under the cy pres approach, ‘class
members receive an indirect benefit (usually through defendant
donations to a third party) rather than a direct monetary payment.’” In
re EasySaver Rewards Litig., 906 F.3d 747, 760 (9th Cir. 2018) (quoting
Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012)), cert. denied,
139 S. Ct. 2744 (2019).
CAMPBELL V. ST. JOHN 15
‘[f]irst and foremost’ of standing’s three elements.” Spokeo,
Inc. v. Robins (Spokeo I), 136 S. Ct. 1540, 1547 (2016)
(alteration in original) (quoting Steel Co. v. Citizens for a
Better Env’t, 523 U.S. 83, 103 (1998)). Among other things,
“an injury in fact must be both concrete and particularized.”
Id. at 1548.
“[A] plaintiff must demonstrate standing separately for
each form of relief sought.” Friends of the Earth, Inc. v.
Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 185 (2000).
“[A]s the party invoking federal jurisdiction, [the plaintiff]
bears the burden of establishing” standing. Spokeo I, 136 S.
Ct. at 1547.
Our discussion of standing proceeds in two parts. We
first conclude that Plaintiffs identified a concrete injury. 7
Next, we hold that Plaintiffs established standing to seek
injunctive relief and that post-filing developments did not
moot this case. These conclusions satisfy us that there was
and is Article III jurisdiction over this case, and that we may
therefore consider the merits of Objector’s challenges to the
approval of the settlement.
A.
An injury is concrete for purposes of standing if it
“actually exist[s],” meaning it is “real, and not abstract”—
but not necessarily “tangible.” Spokeo I, 136 S. Ct. at 1548–
49 (quotation marks omitted). Where, as here, we deal with
an “intangible harm” that is linked to a statutory violation,
7
Once we conclude that this was a concrete injury, it is clear that it
was also particularized, fairly traceable to Facebook, and likely to be
redressed by a favorable judicial decision. The parties have not
contested any of those other standing requirements in their supplemental
briefs, and we do not discuss them in further detail.
16 CAMPBELL V. ST. JOHN
we are guided in determining concreteness by “both history
and the judgment of Congress,” or the legislature that
enacted the statute. See id. at 1549; Patel v. Facebook, Inc.,
932 F.3d 1264, 1273 (9th Cir. 2019) (looking to “[t]he
judgment of the Illinois General Assembly” to inform the
Article III standing inquiry for a claim alleging a violation
of an Illinois privacy statute), cert. denied, No. 19-706 (U.S.
Jan. 21, 2020). Historical practice is “instructive” as to
“whether an alleged intangible harm has a close relationship
to a harm that has traditionally been regarded as providing a
basis for a lawsuit in English or American courts.” Spokeo
I, 136 S. Ct. at 1549. We also look to legislative judgment
because legislatures may “elevat[e] to the status of legally
cognizable injuries concrete, de facto injuries that were
previously inadequate in law.” Id. (alteration in original)
(quoting Lujan, 504 U.S. at 578). But the fact that a
legislature has “grant[ed] a person a statutory right and
purport[ed] to authorize that person to sue to vindicate that
right” is not by itself sufficient for standing. Id. When a
legislature has enacted a “bare procedural” protection, a
plaintiff “cannot satisfy the demands of Article III” by
pointing only to a violation of that provision, but also must
link it to a concrete harm. Id. at 1550 (emphasis added).
When, however, a statutory provision identifies a
substantive right that is infringed any time it is violated, a
plaintiff bringing a claim under that provision “need not
allege any further harm to have standing.” Eichenberger v.
ESPN, Inc., 876 F.3d 979, 983–84 (9th Cir. 2017).
For the reasons that follow, we conclude that the
statutory provisions under which Plaintiffs sued protect
concrete interests because, like the provisions examined in
several of our recent decisions, they “codif[y] a context-
specific extension of the substantive right to privacy.” See
id. at 983.
CAMPBELL V. ST. JOHN 17
ECPA includes a private right of action, 18 U.S.C.
§ 2520, against anyone who “intentionally intercepts,
endeavors to intercept, or procures any other person to
intercept or endeavor to intercept, any wire, oral, or
electronic communication,” 18 U.S.C. § 2511(1)(a).
Plaintiffs sued under that provision and also alleged a
violation of ECPA’s prohibition on the intentional use of the
contents of information knowingly obtained through such
interception. See id. § 2511(1)(d). Plaintiffs also sued under
CIPA, which likewise includes a private right of action, Cal.
Penal Code § 637.2(a), and which similarly prohibits the
unauthorized reading, or attempting to read, of “any
message, report, or communication while the same is in
transit or passing over any wire, line, or cable,” as well as
the use of “any information so obtained.” Cal. Penal Code
§ 631(a).
The harms protected by these statutes bear a “close
relationship” to ones that have “traditionally been regarded
as providing a basis for a lawsuit.” See Spokeo I, 136 S. Ct.
at 1549. “Violations of the right to privacy have long been
actionable at common law.” Eichenberger, 876 F.3d at 983.
And one of the several privacy torts historically recognized
was “unreasonable intrusion upon the seclusion of another,”
which traditionally extends to, among other things, “tapping
. . . telephone wires” as well as “opening . . . private and
personal mail.” Restatement (Second) of Torts § 652B
cmt. b. There is a straightforward analogue between those
traditional torts and the statutory protections codified in
ECPA and CIPA against viewing or using private
communications. Moreover, under the privacy torts that
form the backdrop for these modern statutes, “[t]he intrusion
itself makes the defendant subject to liability.” Restatement
(Second) of Torts § 652B cmt. b. “In other words, ‘privacy
torts do not always require additional consequences to be
18 CAMPBELL V. ST. JOHN
actionable.’” Patel, 932 F.3d at 1274 (quoting
Eichenberger, 876 F.3d at 983). Thus, historical practice
provides support not only for the conclusion that wiretapping
is actionable, but also for the conclusion that a wiretapping
plaintiff “need not allege any further harm to have standing.”
See Eichenberger, 876 F.3d at 984.
The reasons articulated by the legislatures that enacted
ECPA and CIPA further indicate that the provisions at issue
in this case reflect statutory modernizations of the privacy
protections available at common law. The purpose of ECPA
includes creating “[f]ederal statutory standards,” analogous
to the “protection against unauthorized opening” of mail, “to
protect the privacy and security of communications” made
using newer technology. S. Rep. No. 99-541, at 5 (1986), as
reprinted in 1986 U.S.C.C.A.N. 3555, 3559. CIPA’s
purpose similarly includes “protect[ing] the right of privacy
of the people of [California],” because “the invasion of
privacy” resulting from the use of new technology to
“eavesdrop[] upon private communications” causes “a
serious threat to the free exercise of personal liberties.” Cal.
Penal Code § 630. Plaintiffs’ challenges here arise under the
core provisions of those statutes regarding interception and
use of private communications. We respect the legislatures’
judgment about the importance of the privacy interests
violated when communications are intercepted, as reflected
in their decisions to enact a private right of action that is
available when these provisions are infringed. See Spokeo I,
136 S. Ct. at 1549.
Our precedent confirms that Plaintiffs have asserted a
concrete harm. We have, in the years since Spokeo I,
identified several statutory provisions that guard against
invasions of concrete privacy interests. See, e.g., Patel,
932 F.3d at 1269, 1271–75 (concrete interests protected by
CAMPBELL V. ST. JOHN 19
the Illinois Biometric Information Privacy Act’s
requirements relating to private entities’ “collection,
retention, disclosure, and destruction of biometric identifiers
and biometric information,” such as face templates (quoting
Rosenbach v. Six Flags Entm’t Corp., 129 N.E.3d 1197,
1203 (Ill. 2019))); Eichenberger, 876 F.3d at 981, 983–84
(concrete interests protected by the Video Privacy Protection
Act’s requirement that “video tape service providers” not
disclose “personally identifiable information concerning any
consumer of such provider” (quoting 18 U.S.C.
§ 2710(b)(1))); Van Patten v. Vertical Fitness Grp., LLC,
847 F.3d 1037, 1041–43 (9th Cir. 2017) (concrete interests
protected by the Telephone Consumer Protection Act, which
“establishes the substantive right to be free from certain
types of phone calls and texts absent consumer consent”).
There is no meaningful distinction between the concrete,
substantive privacy interests protected by the statutes at issue
in Patel, Eichenberger, and Van Patten and the interests
protected by the provisions of ECPA and CIPA at issue in
this case. For example, just as the Video Privacy Protection
Act’s prohibition on disclosure of information about an
individual’s video rentals protects a substantive privacy
interest, rather than merely codifying “a procedure that video
service providers must follow,” Eichenberger, 876 F.3d
at 983, ECPA and CIPA section 631 are targeted at the
substantive intrusion that occurs when private
communications are intercepted by someone who does not
have the right to access them, rather than merely setting out
a procedure for handling data.
For all of the foregoing reasons, every violation of the
provisions of ECPA and CIPA at issue in this case
“‘present[s] the precise harm and infringe[s] the same
privacy interests Congress [and the California legislature]
sought to protect’ by enacting” ECPA and CIPA section 631.
20 CAMPBELL V. ST. JOHN
See Eichenberger, 876 F.3d at 984 (first two alterations in
original) (quoting Van Patten, 847 F.3d at 1043). The Third
Circuit has indeed already held that violations of ECPA and
CIPA of the type alleged here “involve[] a clear de facto
injury.” In re Nickelodeon Consumer Privacy Litig.,
827 F.3d 262, 274 (3d Cir. 2016); see also In re Google Inc.
Cookie Placement Consumer Privacy Litig., 934 F.3d 316,
325 (3d Cir. 2019) (concluding, in accord with Nickelodeon
and after Gaos was decided, that “a concrete injury for
Article III standing purposes occurs when Google, or any
other third party, tracks a person’s internet browser activity
without authorization”). We agree. We thus conclude that
Plaintiffs identified a concrete injury by claiming that
Facebook violated ECPA and CIPA when it intercepted,
catalogued, and used without consent URLs they had shared
in private messages. 8
Facebook initially did not contest in this appeal that
Plaintiffs had standing, and it argued that we should affirm
the settlement approval. Facebook now argues in its
supplemental brief, however, that the settlement should be
vacated and the case dismissed because Plaintiffs lacked
standing to bring this case. Specifically, Facebook argues
8
Robins v. Spokeo, Inc. (Spokeo II), 867 F.3d 1108 (9th Cir. 2017),
further supports our conclusion. There, on remand from the Supreme
Court, we held that the plaintiff had alleged sufficiently concrete injuries
resulting from Spokeo’s failure to follow procedures of the Fair Credit
Reporting Act that ensure accuracy of consumer report information. Id.at 1110–11, 1117. Standing is easier to prove here than it was in Spokeo
because “although the [Fair Credit Reporting Act] outlines procedural
obligations that sometimes protect individual interests,” ECPA and CIPA
section 631, as discussed above, codify “a substantive right to privacy”
the intrusion of which causes concrete harm “any time” there is a
violation. See Eichenberger, 876 F.3d at 983–84.
CAMPBELL V. ST. JOHN 21
that Plaintiffs suffered no concrete harm from the “use of
anonymized and aggregated data from website links.”
But, ultimately, this new argument is beside the point in
the context of this case. Plaintiffs alleged, and Facebook has
confirmed (through, among other things, its revised Data
Policy), that Facebook identifies and collects the contents of
users’ individual private messages. Plaintiffs’ position that
this was being done without consent meant that they claimed
a violation of the concrete privacy interests that ECPA and
CIPA protect, regardless of how the collected data was later
used. No more is needed to support standing under Spokeo. 9
B.
To have standing to seek to enjoin Facebook’s private
message practices, Plaintiffs must show “either ‘continuing,
present adverse effects’ due to [their] exposure to
9
Facebook’s supplemental brief also argues that, because Plaintiffs
consented to the uses of URL data, they lack standing. Both this
argument and Facebook’s contention about anonymized and aggregated
use of data are better understood as arguments that ECPA and CIPA were
not actually violated by the practices challenged here. Such merits
arguments in disguise tell us nothing about whether Plaintiffs had
standing to bring the case in the first place. See Kirola v. City & County
of San Francisco, 860 F.3d 1164, 1175 (9th Cir. 2017) (rejecting an
injury-in-fact argument that would have meant there was “no difference
between [the plaintiff] succeeding on the merits and establishing
standing to assert her claims in the first place”). As explained below, the
merits of this case would have turned on several legal questions that
Plaintiffs have since acknowledged are difficult and unresolved.
Because the parties settled this case rather than continuing to litigate, we
have no occasion to resolve any of those questions here. We emphasize
that this case also does not present the question whether standing could
be based entirely on injury from anonymized, aggregated uses of data
because Plaintiffs also focused on unconsented-to collection and storage
of information from private messages that enabled those uses.
22 CAMPBELL V. ST. JOHN
[Facebook’s] past illegal conduct or ‘a sufficient likelihood
that [they] will again be wronged in a similar way.’” Villa
v. Maricopa County, 865 F.3d 1224, 1229 (9th Cir. 2017)
(first quoting O’Shea v. Littleton, 414 U.S. 488, 495–96
(1974); then quoting City of Los Angeles v. Lyons, 461 U.S.
95, 111 (1983)). Objector and Facebook both contend that
Plaintiffs did not satisfy this requirement. We disagree.
This aspect of standing, like any other, must “focus[] on
whether the party invoking jurisdiction had the requisite
stake in the outcome when the suit was filed.” Davis v. FEC,
554 U.S. 724, 734 (2008); see also Slayman v. FedEx
Ground Package Sys., Inc., 765 F.3d 1033, 1047–48 (9th
Cir. 2014) (“When evaluating whether [the standing]
elements are present, we must look at the facts as they exist
at the time the complaint was filed.” (alteration in original)
(quoting Am. Civil Liberties Union of Nev. v. Lomax,
471 F.3d 1010, 1015 (9th Cir. 2006))). It turns out that some
(but not all) of Facebook’s challenged uses of private
message URL data had ended before Plaintiffs sued, as
Facebook ultimately acknowledged in the settlement
agreement. But when Plaintiffs sued, Facebook was actively
accessing private messages—conduct that Facebook has
never claimed to have ceased. Facebook was also still using
the data from these messages for its Recommendations Feed.
And Facebook’s ongoing retention of the data collected from
private messages meant that there was a risk that it would
resume using the data for “Like” counters, resume sharing
the data with third parties, or begin using the data for some
other purpose. This combination of continuing harm plus
likelihood of future harm was sufficient for Plaintiffs to have
standing to seek injunctive relief.
To be sure, Facebook apparently did stop using data from
private messages in its Recommendations Feed after this
CAMPBELL V. ST. JOHN 23
case was filed, and did not resume either that use of URL
data or the already-stopped uses of “Like” counting and
third-party sharing at any time between the action’s filing
and its settlement. But the question whether Facebook’s
conduct since Plaintiffs filed this action made it unlikely that
Plaintiffs would again be injured by the challenged practices
presents a separate issue: whether their challenges had
become moot. There are “important difference[s] between”
standing and mootness, motivated in part by the
“wasteful[ness]” of “abandon[ing]” cases as moot that
“ha[ve] been brought and litigated, often (as here) for years.”
Friends of the Earth, 528 U.S. at 191–92. Among the
differences between standing and mootness is that, to show
that Plaintiffs’ claims had become moot, Facebook would
have needed to satisfy “the formidable burden of showing
that it is absolutely clear the allegedly wrongful behavior
could not reasonably be expected to recur.” See id. at 190.
Neither Facebook nor Objector has suggested that Facebook
could have carried that heavy burden, nor does the record
demonstrate that it could have.
* * *
In sum, we conclude that the district court had
jurisdiction to approve the settlement, and that we therefore
have jurisdiction to review the merits of that decision.
III.
A.
Under Federal Rule of Civil Procedure 23(e)(2), a
district court may approve a class action settlement only
after finding that the settlement is “fair, reasonable, and
adequate.” Courts reviewing class action settlements must
“ensure[] that unnamed class members are protected ‘from
24 CAMPBELL V. ST. JOHN
unjust or unfair settlements affecting their rights,’” while
also accounting for “the ‘strong judicial policy that favors
settlements, particularly where complex class action
litigation is concerned.’” In re Hyundai & Kia Fuel Econ.
Litig., 926 F.3d 539, 556, 568 (9th Cir. 2019) (en banc) (first
quoting Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623
(1997); then quoting Allen v. Bedolla, 787 F.3d 1218, 1223
(9th Cir. 2015)).
We have described several factors for district courts to
consider when evaluating the fairness of a class action
settlement:
[1] the strength of the plaintiffs’ case; [2] the
risk, expense, complexity, and likely duration
of further litigation; [3] the risk of
maintaining class action status throughout the
trial; [4] the amount offered in settlement;
[5] the extent of discovery completed and the
stage of the proceedings; [6] the experience
and views of counsel; [7] the presence of a
governmental participant; and [8] the
reaction of the class members to the proposed
settlement.
Hanlon v. Chrysler Corp., 150 F.3d 1011, 1026 (9th Cir.
1998). District courts may consider some or all of these
factors. See Rodriguez v. West Publ’g Corp., 563 F.3d 948,
963 (9th Cir. 2009). 10
10
After the district court’s approval of the settlement in this case,
Rule 23(e)(2) was amended. Whereas the rule previously did not expand
upon what was necessary for a settlement to be “fair, reasonable, and
adequate,” it now lists criteria that are relevant to that determination. We
CAMPBELL V. ST. JOHN 25
Our review of a district court’s decision to approve a
class action settlement is “extremely limited.” Hanlon,
150 F.3d at 1026. “Parties seeking to overturn the settlement
approval must make a ‘strong showing’ that the district court
clearly abused its discretion.” Hyundai, 926 F.3d at 556
(quoting Linney v. Cellular Alaska P’ship, 151 F.3d 1234,
1238 (9th Cir. 1998)). A district court clearly abuses its
discretion by either failing to apply the correct legal standard
or by making clearly erroneous factual determinations. See
id. When the issue presented is the substantive fairness of
the settlement, we must refrain from “substitut[ing] our
notions of fairness for those of the district judge.” In re
Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 950
(9th Cir. 2011) (alteration in original) (quoting Officers for
Justice v. Civil Serv. Comm’n, 688 F.2d 615, 626 (9th Cir.
1982)); see also Lane v. Facebook, Inc., 696 F.3d 811, 818
(9th Cir. 2012) (explaining that the “district court should
have broad discretion because it ‘is exposed to the litigants,
and their strategies, positions and proof’” (quoting Hanlon,
150 F.3d at 1026)).
B.
The issue Objector raises here is the substantive fairness
of the settlement, so we approach our review with substantial
deference. And this case does not implicate the “higher
standard of fairness” that applies when parties settle a case
need not determine whether this amendment should be applied
retroactively here because applying the amended version of the rule
would not change our conclusions. See Fed. R. Civ. P. 23 advisory
committee’s note to 2018 amendment (explaining that “[t]he goal of this
amendment is not to displace” any of the factors historically considered
in assessing settlement fairness, “but rather to focus the court and the
lawyers on the core concerns of procedure and substance that should
guide the decision whether to approve the proposal”).
26 CAMPBELL V. ST. JOHN
before the district court has formally certified a litigation
class. See Hanlon, 150 F.3d at 1026 (explaining that when
a case settles before class certification, “[t]he dangers of
collusion between class counsel and the defendant, as well
as the need for additional protections when the settlement is
not negotiated by a court-designated class representative,
weigh in favor of a more probing inquiry than may normally
be required under Rule 23(e)”); see also Newberg on Class
Actions § 13:13 (5th ed.) (explaining that earlier settlements
can make it “more difficult to assess the strengths and
weaknesses of the parties’ claims and defenses, to determine
the appropriate definition of the class, and to consider how
class members will actually benefit from the proposed
settlement” (quoting Manual for Complex Litigation
§ 21.612 (4th ed.))). 11
As to the settlement’s substantive fairness, Objector does
not seriously dispute the district court’s findings that several
of the governing factors weigh in favor of approving this
settlement—including that the case proceeded to nearly the
close of discovery before settling, which was “much further
than almost every other class action” for which the judge had
overseen settlement “in the past 17 years”; that the
settlement was “the result of four in-person, arms’-length
mediations before two different mediators”; and that “highly
experienced” class counsel advocated for the settlement. See
Hanlon, 150 F.3d at 1026 (“the extent of discovery
completed and the stage of the proceedings,” as well as “the
experience and views of counsel,” are relevant to approval
of settlement); Rodriguez, 563 F.3d at 965 (“We put a good
11
The district court did, as part of its approval of the settlement,
certify a settlement-only class, but that class did not differ materially
from the litigation class the court had already certified in its order
granting in part the contested class certification motion.
CAMPBELL V. ST. JOHN 27
deal of stock in the product of an arms-length, non-collusive,
negotiated resolution.”).
Objector’s contentions focus instead on only a subset of
the considerations that were relevant to the district court’s
holistic assessment of the settlement’s fairness. First,
relying primarily on our decision in Koby v. ARS National
Services, Inc., 846 F.3d 1071 (9th Cir. 2017), Objector
argues that the settlement should not have been approved
because it provides absent class members with “worthless
injunctive relief.” See id. at 1080–81. Second, relying
primarily on our decision in Bluetooth, Objector argues that
the settlement contains several “warning signs” that indicate
“that class counsel have allowed pursuit of their own self-
interests . . . to infect the negotiations.” See 654 F.3d at 947.
For the reasons that follow, we reject each of these
arguments.
1.
In Koby, we held that a magistrate judge had abused her
discretion by approving a settlement, “for one primary
reason: There [was] no evidence that the relief afforded by
the settlement [had] any value to the class members, yet to
obtain it they had to relinquish their right to seek damages in
any other [similar] class action” against the same defendant.
846 F.3d at 1079. That “primary reason” had two
components. First, the settlement at issue in Koby provided
injunctive relief that was “of no real value” because the
defendant did not have “to do anything it was not already
doing,” plus, “[t]o make matters worse,” there was a clause
in the settlement giving the defendant an option to “escape”
the injunction in “the only scenario in which [it] might be
tempted” to do something inconsistent with the injunction.
Id. at 1080. Second, the lack of any value in what the class
received meant that class members “could not fairly or
28 CAMPBELL V. ST. JOHN
reasonably be required to give up anything in return.” Id.
Yet the settlement would have nevertheless required class
members to “relinquish” something that “plainly” had at
least “some value”: claims for damages in other class actions
against the defendant, including in one such action that was
already pending. Id. at 1080–81.
Objector’s argument that the settlement here is invalid
because the class received only “worthless injunctive relief,”
see id. at 1081, is premised on a view of the settlement’s
value that we decline to adopt. The district court found that
the settlement’s injunctive relief had value to absent class
members. This finding was not clearly erroneous. The
settlement requires, in relevant part, that Facebook make a
plain English disclosure on its Help Center page that tells
users that Facebook “use[s] tools to identify and store links
shared in messages.” The settlement requires Facebook to
display the relevant language on its Help Center page for a
year. 12 In light of the nature of the claims here, a year-long
requirement to make such a disclosure has value: it provides
information to users about Facebook’s message monitoring
practices, making it less likely that users will unwittingly
12
Objector argues that this disclosure is duplicative of the change
Facebook had already made to the disclosure language in its Data Policy,
and therefore that the Help Center disclosure has no marginal value. The
district court did not clearly err by concluding otherwise. As the district
court explained, the twenty-two-word Help Center disclosure provides
“further relief to the class” beyond the Data Policy change because, in
addition to being required to stay on display for a year, it “explain[s]
Facebook’s policy regarding its use of data in messages in plain English,
on a web page accessed by hundreds of thousands of Facebook users per
year.”
CAMPBELL V. ST. JOHN 29
divulge private information to Facebook or third parties in
the course of using Facebook’s messaging platform. 13
Further, contrary to Objector’s apparent interpretation of
Koby, the relief provided to the class cannot be assessed in a
vacuum. Rather, the settlement’s benefits must be
considered by comparison to what the class actually gave up
by settling. See Protective Comm. for Indep. Stockholders
of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424–
25 (1968) (“Basic to [the] process [of evaluating settlements]
. . . is the need to compare the terms of the compromise with
the likely rewards of litigation.”); see also Hanlon, 150 F.3d
at 1026 (relevant considerations include not only “the
amount offered in settlement,” but also “the strength of the
plaintiffs’ case,” i.e., what plaintiffs could expect from
further litigation). Our holding in Koby was that the
settlement was invalid because it gave the class nothing and
yet required the class to give up something. 846 F.3d at 1080
(comparing what the settlement provided to class
members—“nothing of value”—with what they were
“required to give up . . . in return”—the “right to pursue
damages claims against [the defendant] as part of a class
action”).
Here, the class did not need to receive much for the
settlement to be fair because the class gave up very little.
The district court did not err to the extent it concluded that
class members’ claims were weak enough that the class was
fairly likely to end up receiving nothing at all had this
13
Although we hold that the district court did not clearly err in
finding that the settlement had value for the class, this does not mean
that, if we were reviewing the settlement ourselves in the first instance,
we would necessarily conclude that the benefits to the class from this
disclosure were particularly substantial.
30 CAMPBELL V. ST. JOHN
litigation proceeded further. As the district court stated,
“any possible benefit to the class from continued litigation
[was] both uncertain and insubstantial.” Damages claims
had already been eliminated from the case, so the only forms
of potentially available relief (absent a successful appeal
from the damages portion of the class certification order)
were declaratory or injunctive. To obtain such relief,
Plaintiffs would have had to overcome many doctrinal
hurdles. For example, they would have had to show that
Facebook’s reading of messages sent on Facebook amounted
to an unlawful “interception” or wiretap. This would include
proving that Facebook had improperly read Plaintiffs’
messages while the messages were in “transit” as opposed to
in “storage,” see Konop v. Hawaiian Airlines, Inc., 302 F.3d
868, 878 (9th Cir. 2002); Cal. Penal Code § 631(a), an issue
on which even Plaintiffs acknowledged “uncertainty in the
law.” Plaintiffs also would have had to contend with
Facebook’s potential argument that users had consented to
the challenged practices—a defense that similarly could
have precluded liability under both ECPA and CIPA. See
18 U.S.C. § 2511(2)(d); Cal. Penal Code § 631(a). In
addition, Plaintiffs would have had to overcome Facebook’s
potential argument that the challenged activity occurred in
“the ordinary course of its business,” 18 U.S.C. § 2510(5)(a),
and therefore could not be the basis for liability under
ECPA—an issue that Plaintiffs acknowledged turns on
caselaw that is “not fully developed.”
We need not and do not resolve the merits of any of these
issues. Collectively, however, the numerous challenges that
Plaintiffs faced provided the parties and the district court
ample support to conclude that Plaintiffs were ultimately
likely to have lost this entire case.
CAMPBELL V. ST. JOHN 31
In evaluating what class members relinquished in this
settlement, we must also consider whether class members
were required to release claims that were more meritorious
than the theories Plaintiffs pursued in this litigation. As an
initial matter, the settlement here expressly excludes any
release of absent class members’ claims for damages—
unlike the release in Koby. See 846 F.3d at 1080. The
release here does include a release of claims for declaratory
and injunctive relief, and it uses somewhat broad language
in describing which declaratory and injunctive relief claims
are barred. We do not, however, read the terms of the
injunctive and declaratory release in isolation.
Under our precedent, the only claims that would be
barred in a future case by this release are those that share an
“identical factual predicate” with the claims advanced in this
case. See Hesse v. Sprint Corp., 598 F.3d 581, 590–92 (9th
Cir. 2010). Facebook’s counsel assured us at oral argument
that the parties’ intent was to release only those claims that
could be released under that precedent. See Oral Argument
at 36:48–37:20 (asserting that, because of Hesse, “if there
are claims in [a different] case that involve URL shares in
messages, then yes, [those claims] would be covered by this
[release]. But other items would not be.”). Facebook would
be bound in any future litigation by this representation about
the intended scope of the release, even if that litigation took
place in a jurisdiction that lacked the “identical factual
predicate” rule. See U.S. Cellular Inv. Co. of L.A., Inc. v.
GTE Mobilnet, Inc., 281 F.3d 929, 934 (9th Cir. 2002)
(“[T]he fundamental goal of contract interpretation is to give
effect to the mutual intent of the parties as it existed at the
time of contracting.”). Interpreting the release consistent
with that rule, it does not extinguish claims lacking the
weaknesses described above, and thus does not render the
relief provided to the class inadequate.
32 CAMPBELL V. ST. JOHN
In sum, given how little the class could have expected to
obtain if it had pursued claims further based on the facts
alleged here (and, correspondingly, how little it gave up in
the release), it was not unreasonable that the settlement gave
the class something of modest value.
2.
Objector next argues that the settlement is invalid under
our decision in Bluetooth because it prioritizes class
counsel’s interests over those of their clients. In Bluetooth,
we identified three “subtle” warning signs that may indicate
that class counsel colluded with defense counsel to settle the
case in a manner that elevated class counsel’s interests over
those of the class, and that the settlement is therefore not
“fair, reasonable, and adequate” under Rule 23(e)(2):
(1) when counsel receive a disproportionate distribution of
the settlement, or the class gets no monetary distribution but
class counsel are well compensated; (2) when the parties
negotiate “clear sailing” arrangements for the payment of
attorney’s fees wherein the defendant agrees not to object to
the fee application presented to the court; and (3) when the
agreement includes a “reversion” or “kicker” provision
under which any reduction in attorney’s fees reverts to the
defendant rather than being added to the class fund. See
654 F.3d at 947. We explained in Bluetooth that
“assessment of [a] settlement’s overall reasonableness must
take into account the defendant’s overall willingness to pay,”
id. at 949, keeping in mind that the defendant’s indifference
as to how that payment is divvied up on the plaintiffs’ side
could result in “a tradeoff between merits relief and
CAMPBELL V. ST. JOHN 33
attorneys’ fees,” id. at 946 (quoting Evans v. Jeff D.,
475 U.S. 717, 733 (1986)). 14
The district court looked for each of these warning signs
and concluded that none weighed against approval of the
settlement. As to disproportionality, the court explained that
although “it is difficult to put a dollar figure on” the value of
the non-monetary relief obtained by the class, “the privacy
interests of the class vindicated by the settlement” were
significant, and the non-monetary nature of the relief was “a
function of [the district] court’s decision to certify only an
injunctive relief class.” Meanwhile, class counsel, who had
filed this action under provisions that permit a court to award
attorney’s fees, had received a substantial “lodestar
discount,” the result of which was a fee that the court
separately deemed reasonable in its ruling on the fee
application. As to the second and third warning signs, the
district court reasoned that Bluetooth’s concerns with “clear
sailing” and reversion of unawarded attorneys’ fees to
Facebook were “inapplicable to this case because there is no
common fund, ‘constructive’ or otherwise,” and the class
was certified for injunctive relief only. The district court
added that Bluetooth “only requires that the court carefully
scrutinize the settlement for collusion,” and here there was
none. Rather, “[t]he case was extremely hard-fought, and
settled at an advanced procedural stage, after multiple
mediations.”
The district court did not abuse its discretion in
concluding that the settlement was not the result of collusion
14
The Bluetooth warning signs, which bear on a settlement’s
fairness under Rule 23(e)(2), are distinct from the issue whether the
district court awarded “reasonable” fees and costs under the standards of
Rule 23(h)—which was not raised in this appeal.
34 CAMPBELL V. ST. JOHN
between class counsel and Facebook. As an initial matter,
Bluetooth explained that the warning signs were a necessary
addition to the Hanlon factors because the settlement at issue
in Bluetooth had been “negotiated prior to formal class
certification,” when “there is an even greater potential for a
breach of fiduciary duty owed the class during settlement.”
Bluetooth, 654 F.3d at 946. Bluetooth therefore left open a
question no subsequent case has answered: whether district
courts are required to look for these subtle warning signs in
cases, like this one, that are settled after formal class
certification. We need not resolve that threshold question
because, assuming without deciding that courts must look
for these warning signs in a post-certification settlement, we
conclude that applying the Bluetooth framework does not
demonstrate that the settlement in this case was unfair. Cf.
In re Online DVD-Rental Antitrust Litig., 779 F.3d 934, 944
n.6 (9th Cir. 2015) (assuming, without deciding, that
Bluetooth’s “heightened scrutiny” does not apply to post-
certification settlement in a case where such scrutiny had not
been applied by the district court and had not been raised by
the parties on appeal).
Turning to the district court’s evaluation of the specific
warning signs enumerated in Bluetooth, the district court’s
analysis of the first Bluetooth factor, disproportionality, was
reasonable. Objector’s contention distills to her position that
any attorney’s fee award that exceeds “roughly 25% of the
settlement value” is “disproportionate,” and that therefore
the only way to “justify the nearly $4 million allocated for
attorney’s fees” in this settlement is by appraising the overall
settlement “at more than $15.5 million.” Although 25% of
the anticipated settlement value is a useful benchmark to
keep in mind in all cases, our caselaw affords district courts
discretion to refrain from attempting to measure the
unmeasurable. As the district court here explained, “it is
CAMPBELL V. ST. JOHN 35
difficult to put a dollar figure on” the value of what the class
obtained, but the court concluded the class did obtain relief
that has meaningful value. In situations like this one, where
“the benefit to the class” is not “easily quantified,” district
courts have discretion to award fees based on how much time
counsel spent and the value of that time (a lodestar
calculation) without needing to “perform a ‘crosscheck’” in
which they attempt to estimate how this compares to the
recovery for the class. See Hyundai, 926 F.3d at 571
(quoting Bluetooth, 654 F.3d at 942). The district court
reasonably exercised that discretion not to perform a
crosscheck of the lodestar in this case, given the difficulty of
measuring the value of the injunctive relief.
To be sure, in a case where the class primarily receives
non-monetary relief, but class counsel obtain millions of
dollars, it may be an abuse of discretion not to at least
attempt to approximate the value of injunctive relief and use
that valuation in an assessment of disproportionality. But in
this case, the district court did not abuse its discretion by
declining to do so, because of three key circumstances that
are all present here. First, the district court had already
declined to certify a damages class. When further litigation
may result in substantial monetary relief to class members,
the failure to include meaningful monetary relief in a
settlement might be (but is not necessarily) a subtle sign that
class counsel bargained away something valuable to benefit
themselves. In such settlements, in order to show that
nothing was unfairly bargained away by counsel, it may be
necessary for settling parties to show why their non-
monetary settlement is at least as good for the class as any
monetary figure that would approximate what they could
expect from further litigation. But where, as here, further
litigation of the case being settled is extremely unlikely to
result in a damages award, the assessment of whether
36 CAMPBELL V. ST. JOHN
counsel got more fees by bargaining away valuable relief for
the class is more qualitative, and more context-specific.
Second, damages were also not part of the class release, so
to the extent further litigation might yield damages, absent
class members were not prohibited from trying again to
obtain such damages—further reducing the likelihood that
class counsel bargained away any potentially valuable relief.
Third, the district court was well-positioned to recognize,
based on its years-long oversight of this litigation and its
attendant understanding of how users interact with
Facebook, the value of the injunctive relief that was made
available to the class through the settlement. Relatedly, the
district court was able to determine that class counsel had
not, at the eleventh hour after litigating the case well beyond
a hotly contested class certification motion and up to near
the close of extensive discovery, abandoned the interests of
the class in favor of their own. Taking these factors together,
we conclude that the court did not abuse its discretion by
concluding that the value of what the class received was
reasonable not only in proportion to what the class gave up
(as discussed above) but also in proportion to what class
counsel received.
The second and third Bluetooth factors do not
demonstrate that reversal is warranted on the basis that the
settlement was unfair. As to the third factor, the district court
did not err in its evaluation of Bluetooth’s concern with
“reversion.” An injunctive-relief-only class settlement, by
definition, has no fund into which any fees not awarded by
the court could possibly revert. There is no blanket rule
foreclosing parties from agreeing that the class will receive
only injunctive relief.
As to the second factor, we disagree with the district
court to the extent that it held that a defendant’s agreement
CAMPBELL V. ST. JOHN 37
to allow “clear sailing” of class counsel’s fee application
should never be considered in an injunctive-relief-only
settlement. The concern with a “clear sailing” arrangement
is that class counsel may have obtained too little for the class
“in exchange for red-carpet treatment on fees.” Bluetooth,
654 F.3d at 947 (quoting Weinberger v. Great N. Nekoosa
Corp., 925 F.2d 518, 524 (1st Cir. 1991)). There may be
some cases in which courts should be concerned that class
counsel gave up valuable injunctive relief in exchange for a
defendant’s promise not to contest class counsel’s fee
application. But we hold that any error in the district court’s
discussion of this factor is harmless. No one factor is
dispositive. We conclude that the evidence is insufficient to
prove that the class would have gotten meaningfully more
injunctive or declaratory relief if Facebook had merely been
permitted to oppose class counsel’s fee application, which
Facebook already knew would be requesting substantially
less than what class counsel represented would fully
compensate them.
Finally, we reject Objector’s argument that, in addition
to the three warning signs in Bluetooth, this case presents a
“fourth red flag” indicating a lawyer-driven deal: the fact
that the parties did not want to provide any notice of the
settlement to the class, beyond what was already publicly
available. It does seem odd that the parties repeatedly
emphasized the informational value of the settlement while
simultaneously arguing that it was unnecessary to provide
class members formal notice that this information exists and
that, if they had been dissatisfied with the settlement terms,
they could have objected. But this is insufficient to prove
that the settlement was unfair. Indeed, the district court,
38 CAMPBELL V. ST. JOHN
before granting final approval, did require the parties to
provide more notice than they had proposed giving. 15
IV.
For the foregoing reasons, we AFFIRM the district
court’s approval of the settlement.
15
Although Objector argues that the district court should have done
more to notify class members of the settlement, we do not understand
her position to be that the case should be remanded solely for
supplemental notice and a further opportunity for other class members to
object. Whether the class notice was adequate in its own right—as
opposed to whether the claimed failure to provide enough notice
undermines the settlement’s fairness—is thus outside the scope of our
review.