EXHIBIT 3

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IN THE UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

T.K. THROUGH HER MOTHER, SHERRI

LESHORE, and A.S., THROUGH HER

MOTHER, LAURA LOPEZ,

individually and on behalf of

all others similarly situated,

Plaintiffs,

-vsBYTEDANCE TECHNOLOGY CO., LTD.,

MUSICAL.LY, INC., MUSICAL.LY THE

CAYMAN ISLANDS CORPORATION, AND

TIKTOK, INC.,

Defendants,

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No. 19 CV 7915

Chicago, Illinois

August 7, 2020

11:00 o'clock a.m.

TRANSCRIPT OF TELEPHONIC PROCEEDINGS - Motion

BEFORE THE HONORABLE JOHN R. BLAKEY

APPEARANCES:

For the Plaintiffs: MASON LIETZ & KLINGER LLP

BY: MR. GARY M. KLINGER

227 West Monroe Street

Suite 2100

Chicago, Illinois 60606

For the Plaintiffs: MASON LIETZ & KLINGER LLP

BY: MR. DAVID K. LIETZ

5101 Wisconsin Avenue NW

Suite 305

Washington, DC 20016

LAURA LACIEN, CSR, RMR, FCRR, CRR

OFFICIAL COURT REPORTER

219 South Dearborn Street

Room 1212

Chicago, Illinois 60604

(312) 408-5032

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for the Objector raised, one was the absence of injunctive

relief within the settlement and the other thing was what he

characterized as a lack of clarity regarding which claims

would be covered or not covered because that would cause

confusion in other litigation. Do you want to address either

or both of those points?

MR. LIETZ: Yes, your Honor. With regard to the

second point, your Honor, there doesn't seem to be any

confusion among other claims. The BIPA, you know, MDL,

consolidated complaint seems perfectly clear and comfortable

in what claims that it's asserting and it doesn't seem to be

having any issues with there being a suggestion that that

claim or the claims raised there are somehow released or

obviated by this settlement. So that was counsel's --

Objector's counsel's sole example of how there is being

alleged confusion created.

And, your Honor, the facts and the records in the

MDL proceeding -- which again are now before this court and

are totally available to the court are -- speak volumes about

the absence of confusion. So that argument, your Honor, is

just not one that is supported by the facts.

THE COURT: Well, is it your position that the

release could not be amended to have more clarity on that

because it's a pretty general -- it's a pretty broad release,

right?

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MR. LIETZ: It could be construed, your Honor, as a

very broad release. We believe that the release is bounded

by the facts that are alleged in the complaint and that that

is what limits it. However, your Honor, if the sole sticking

point to final approval of this settlement is to go back and

rework the release to make it more clear and to make sure

that there's a clear understanding of what the limitations

are, we're certainly happy to caucus with defense counsel and

to -- and to work something out that would make it clear to

the world, although we think it already is clear to the

world, what's being released here so we're not --

THE COURT: I interrupted you. With respect to

injunctive relief, did you want to address that?

MR. LIETZ: No. I actually was saving that for a

second, your Honor. Very briefly, we just think that

the -- all the injunctive relief that was fit to be obtained

here was obtained by the FTC. You know, there's this -- the

privacy advocates, the child privacy advocates case to get

the FTC to go back and enforce its consent order, I mean,

that action is not saying that the injunctive relief that the

FTC obtained was insufficient. It's basically just saying

that TikTok is violating it. And so, your Honor, that makes

our point that all the injunctive relief that could have been

obtained in this case was obtained already by the FTC. And

the only missing piece of the puzzle here, your Honor, was a

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by the attorney general whereas for private plaintiffs like

we have here, there is no such exception so that case is

completely inapplicable. For those reasons, you know, the

plaintiffs here really had an uphill battle and we think they

never would have been able to state a claim that could have

survived COPPA preemption.

The other issues that the Objector has raised deal

with the merits of the claims that were -- that the Objector

would want to bring to this case but those are hypothetical

claims. Those are -- those are claims that plaintiffs'

counsel, I'm sure, looked at and examined and chose not to

bring for good reason. We think they have no merit.

As the plaintiffs' counsel has already represented,

there's, you know, a BIPA claim, an Illinois Biometric

Information Privacy Act claim that is pending in other

litigation. We think it has no merit. In fact, we think it

actually violates Rule 11 to assert it because the TikTok app

just doesn't collect biometric information and in any way

that could be considered in violation of the law. And so for

that reason -- that's a hypothetical but just doesn't belong

here. And I don't think we need to even get into the

question of whether this settlement covers a BIPA claim for

that reason, right. It wasn't contemplated by the plaintiffs

here. It -- it's certainly not covered by the conduct that

was at issue and so we don't think that would be a problem.

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THE COURT: All right. If there's nothing else on

behalf of defense counsel, is there anything that any of the

parties want to add before we conclude today?

MR. DRURY: Scott Drury, your Honor, on behalf of

the Objector. I would like to respond to some of the issues

that were raised by both plaintiffs and defendants with your

Honor's permission.

THE COURT: Yeah, sure. Go ahead.

MR. DRURY: Your Honor, first of all, I think it's

important for the Court to note that none of the claims

asserted in this case are direct claims under COPPA. So when

the plaintiffs and defendants keep saying these are COPPA

claims and this is the first case that's brought under COPPA,

that's just inaccurate. There's a statutory claim under the

Video Privacy Protection Act, there's statutory claims under

Illinois and California law, and there's common law claims;

and those are the claims that are asserted and none of them

are preempted. The critical statute that plaintiffs and

defendants ignore is the Video Privacy Protection Act.

That's a federal statute that is in no way preempted by COPPA

because it's a federal law.

The other thing that's important about the Video

Privacy Protection Act, your Honor, is that it allows for

$2,500 of statutory damages. So when the plaintiffs and

defendants cite to data breach cases where there's results

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where people get $5 per class and the cases that they cite

actually -- there's even -- the settlements are more than

just $5 and I'll get into that in a second. Here, it's

$2,500 per violation and so the damages here are easily

calculable and are far in excess of the $1.1 million. A case

that I would respectfully suggest your Honor look at is

Reynolds v. Beneficial National Bank, 288 F.3d, 277. It's a

Seventh Circuit case from 2002. As well as Synfuel Tech v.

DHL, 463 F.3d 646 at Page 653; and that's another Seventh

Circuit case from 2006. In there, the Seventh Circuit says

that in calculating the strength of the case versus the

offer, a court and the parties should try to look at

different scenarios and compare the outcomes that would

happen under the scenarios. And in Reynolds, the court

specifically said that the court -- that the district court

should look at a high option, a medium option, a low option

and a zero option in terms of recovery.

In applying the numbers here using the $2,500

number, assuming that's the only claim that is successful

here, $2,500 times six million class members, your Honor, is

$15 billion. And the court there in Reynolds what it did is

it said let's assume that there's only .5 chance of success

of success of getting $15 billion and it took that into

consideration. It then gave numbers for medium and low. And

using the same ratios that the court used in Reynolds, the

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medium number here, your Honor, would be $600 million. And

again the court in Reynolds then apply a 20 percent value to

the possibility of success. And the low rate here, your

Honor, would be $30 million and the court in Reynolds said

let's assume that's a 30 percent chance of success. And then

for 49.5 percent, we could assume that there is no chance of

success at all.

If we use those ratios, your Honor, the net

expected value of this case is $204 million. I'm not talking

about punitive damages. I'm just talking about statutory

relief. And neither the plaintiffs nor the defendants tried

to explain anywhere, in their briefs or in their arguments,

how their $1.1 million settlement relates remotely to the net

expected value of the case that the Seventh Circuit laid out

in Reynolds v. Beneficial.

Now I don't want to get bogged down in BIPA because

this case is not about BIPA and I want to make that clear for

the Court. But when looking at the value of the settlement

and is this a good settlement, I think a more apt analogy is

to BIPA cases because in BIPA cases there are statutory

damages of $1,000 to $5,000. And as we set forth in our

brief in a recent case in the Northern District of California

involving Facebook -- and we discussed that at Docket Number

38 at ECF Page 9, the district court there rejected a $550

million settlement that would have returned $150 to $300 to

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Identifiable Information in the VPPA is totally different

than in data privacy litigation and it, quote, includes

information which identifies a person as having requested or

obtained specific video materials or services from a

videotape service provider.

You know, the plaintiffs here shoehorn that into

the facts of this case. But to say that this is a Video

Privacy Protection Act claim that warrants any sort of

damages calculation based upon maximum statutory values, it's

just -- it's just incorrect, your Honor.

And last, your Honor, in terms of us providing

discovery to the Objector/Intervenor, they're not entitled to

that under the rules. So if they get in a case by the

Court's order, we will happily provide discovery but the case

law is clear there's no entitlement to discovery at this

stage. Thank you, your Honor.

THE COURT: Anybody else?

MR. WEIBELL: Yes, your Honor. Tony Weibell for

the defendants. Just to add to what plaintiffs' counsel

mentioned about the Video Privacy Protection Act claim, the

Objector's counsel pointed out that that claim has statutory

damages and it's not based on COPPA. There's two issues with

that. One is to the extent this case goes beyond the

allegation of the collection of information from children

about parental consent, those claims would get captured and

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be related to the MDL that's pending now before Judge Lee in

the Northern District of Illinois. We don't think it does

and my understanding is that plaintiffs' counsel also doesn't

think it does.

And with respect specifically to the Video Privacy

Protection Act claim, I think all the parties involved -- not

the Objector but the plaintiffs and defendants -- recognize

after that claim was asserted there really -- there was

nothing there. There was no merit to it because there's no

facts that TikTok actually disclosed to a third party for

non-business operational purposes both the actual name and

the videos that a particular user was watching, right, and

that's what you need to state a claim under VPPA. So I think

we all recognize that that claim just wasn't going anywhere

in this litigation and it shouldn't factor into whether the

settlement is fair except to the extent that the Seventh

Circuit has said the most important factor is the weakness of

the case and so that's all I wanted to add, your Honor.

THE COURT: Okay. Anyone else?

MR. DRURY: Your Honor, Scott Drury. Just very

briefly. I just wanted to make note that in the settlement,

there's no indication that the Video Privacy Protection Act

was dismissed and so for the plaintiffs and the defendants to

now claim that that -- that the Court shouldn't really

consider Count One of the complaint, it's just inaccurate and

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