Court Opinion

ID: 2641100
Source: CourtListenerOpinion
Date Created: 2013-11-05 01:03:57.25011+00
Date Added: 2024-06-11T12:30:26.769093
License: Public Domain

Cite as: 571 U. S. ____ (2013)                              1

                        Statement of ROBERTS, C. J.

    NOTICE: This opinion is subject to formal revision before publication in the
    preliminary print of the United States Reports. Readers are requested to
    notify the Reporter of Decisions, Supreme Court of the United States, Wash-
    ington, D. C. 20543, of any typographical or other formal errors, in order
    that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
 MEGAN MAREK v. SEAN LANE, INDIVIDUALLY AND ON
  BEHALF OF ALL OTHERS SIMILARLY SITUATED, ET AL.

   ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED

    STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

               No. 13–136.       Decided [November 4, 2013]

   The petition for a writ of certiorari is denied.
   Statement of CHIEF JUSTICE ROBERTS respecting the
denial of certiorari.
   In November 2007, respondent Facebook, Inc., released
a program called “Beacon.” It worked like this: When-
ever someone visited the Web site of a participating com-
pany and performed a “trigger” activity, such as posting a
comment or buying a product, the program would auto-
matically report the activity and the user’s personally
identifiable information to Facebook—regardless of whether
the user was a Facebook member. If the user was a Face-
book member, Facebook would publish the activity on
his member profile and broadcast it to everyone in his
“friends” network. So rent a movie from Blockbuster.com,
and all your friends would know the title. Or plan a vaca-
tion on Hotwire.com, and all your friends would know the
destination. To prevent Facebook from posting a particu-
lar trigger activity, a member had to affirmatively opt out
by clicking an icon in a pop-up window that appeared for
about ten seconds after he performed the activity.
   Beacon resulted in the dissemination of large amounts
of information Facebook members allegedly did not intend
to share, provoking a public outcry against Beacon and
Facebook. Facebook responded about a month after Bea-
2                      MAREK v. LANE

                  Statement of ROBERTS, C. J.

con’s launch by changing the program’s default setting
from opt out to opt in, so that any given trigger activity
would not appear on a member’s profile unless the mem-
ber explicitly consented. Facebook also allowed its mem-
bers to disable Beacon altogether.
   In August 2008, 19 individuals brought a putative class
action lawsuit in the U. S. District Court for the Northern
District of California against Facebook and the companies
that had participated in Beacon, alleging violations of
various federal and state privacy laws. The putative class
comprised only those individuals whose personal informa-
tion had been obtained and disclosed by Beacon during
the approximately one-month period in which the pro-
gram’s default setting was opt out rather than opt in. The
complaint sought damages and various forms of equitable
relief, including an injunction barring the defendants from
continuing the program.
   In the end, the vast majority of Beacon’s victims got
neither remedy. The named plaintiffs reached a settle-
ment agreement with the defendants before class certifi-
cation. Although Facebook promised to discontinue the
“Beacon” program itself, plaintiffs’ counsel conceded at
the fairness hearing in the District Court that nothing in the
settlement would preclude Facebook from reinstituting the
same program with a new name. See Tr. 18 (Feb. 26,
2010) (counsel for named plaintiffs) (“At the end of the day,
we could not reach agreement with defendants regarding
limiting their future actions as a corporation”).
   And while Facebook also agreed to pay $9.5 million, the
parties allocated that fund in an unusual way. Plaintiffs’
counsel were awarded nearly a quarter of the fund in fees
and costs, while the named plaintiffs received modest in-
centive payments. The unnamed class members, by con-
trast, received no damages from the remaining $6.5
million. Instead, the parties earmarked that sum for a “cy
pres” remedy—an “as near as” form of relief—because
                 Cite as: 571 U. S. ____ (2013)            3

                  Statement of ROBERTS, C. J.

distributing the $6.5 million among the large number of
class members would result in too small an award per
person to bother. 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. A Facebook
representative would be one of the three members of the
new foundation’s board.
   To top it off, the parties agreed to expand the settlement
class barred from future litigation to include not just those
individuals injured by Beacon during the brief period in
which it was an opt-out program—the class proposed in
the original complaint—but also those injured after Face-
book had changed the program’s default setting to opt in.
Facebook thus insulated itself from all class claims arising
from the Beacon episode by paying plaintiffs’ counsel and
the named plaintiffs some $3 million and spending $6.5
million to set up a foundation in which it would play a
major role. The District Court approved the settlement
as “fair, reasonable, and adequate.” Fed. Rule Civ. Proc.
23(e)(2); see Lane v. Facebook, Inc., Civ. No. C 08–3845,
2010 WL 9013059 (ND Cal., Mar. 17, 2010).
   Petitioner Megan Marek was one of four unnamed class
members who objected to the settlement. Her challenge
focused on a number of disconcerting features of the new
Foundation: the facts that a senior Facebook employee
would serve on its board, that the board would enjoy nearly
unfettered discretion in selecting fund recipients, and
that the Foundation—as a new entity—necessarily lacked
a proven track record of promoting the objectives behind
the lawsuit. She also criticized the overall settlement
amount as too low. The District Court rebuffed these
objections, as did a divided panel of the Ninth Circuit on
appeal. Lane v. Facebook, Inc., 696 F.3d 811 (2012). A
petition for rehearing en banc was denied, over the dissent
of six judges. Lane v. Facebook, Inc., 709 F.3d 791 (2013).
4                      MAREK v. LANE

                   Statement of ROBERTS, C. J.

  I agree with this Court’s decision to deny the petition for
certiorari. Marek’s challenge is focused on the particular
features of the specific cy pres settlement at issue. Grant-
ing review of this case might not have afforded the Court
an opportunity to address more fundamental concerns
surrounding the use of such remedies in class action liti-
gation, including when, if ever, such relief should be con-
sidered; how to assess its fairness as a general matter;
whether new entities may be established as part of such
relief; if not, how existing entities should be selected; what
the respective roles of the judge and parties are in shaping
a cy pres remedy; how closely the goals of any enlisted
organization must correspond to the interests of the class;
and so on. This Court has not previously addressed any
of these issues. Cy pres remedies, however, are a growing
feature of class action settlements. See Redish, Julian, &
Zyontz, Cy Pres Relief and the Pathologies of the Modern
Class Action: A Normative and Empirical Analysis, 62 Fla.
L. Rev. 617, 653–656 (2010). In a suitable case, this Court
may need to clarify the limits on the use of such remedies.