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Ninth Circuit Upholds $180 Million-Plus Attorney-Fee Award
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals has affirmed an award of $180,449,782.62—representing 25% of settlement proceeds—to class counsel in an action against Facebook, Inc. based on its data-sharing practices under which Cambridge Analytica, a political consulting firm, gained access to information on as many as 87 million users which was used to build voter profiles.
Approving the Oct. 10, 2023 order by District Court Judge Vince Chhabria of the Northern District of California were Circuit Judges Danielle J. Forrest and Gabriel P. Sanchez and District Court Judge David A. Ezra of the District of Hawaii, sitting by designation. Their memorandum opinion was filed Thursday.
The panel also found the a $725 million settlement, rejecting arguments put forth by objectors Sarah Feldman and Jill Mahaney.
Chhabria’s Remarks
In making the fee award, Chhabria said:
“The Court does not take lightly the concern that a fee award equaling 25% of the Settlement Fund can be inappropriate in cases involving a massive monetary recovery for the class. In many such cases, the 25% benchmark will be too high….As a result, the Court has viewed the proposed fee award with greater skepticism, and less deference to the 25% benchmark, than in a typical case. That said, the Court finds that the attorneys’ fee award is fair and reasonable under the percentage-of-the-recovery method.”
He noted that if, rather than using a percentage, he had employed the lodestar method—multiplying the rates by the number of hours—and applying a multiplier of 1.99. which he said “is below average in settlements of comparable size,” the award would have been similar.
Ninth Circuit’s View
The Ninth Circuit opinion says that the fee award “though large, was not an abuse of discretion.”
Addressing the objectors’ contention that, in light of the size of the settlement, the fee award should be well below the 25% mark, the judges said:
“We have not required fee percentages to fall in relation to the size of a class settlement….More importantly, our review on appeal is limited to whether the district court granted a reasonable fee award after considering all the circumstances of the case, not whether it should have applied a different percentage….After considering these factors and overruling all objections, the district court was within its discretion in finding both that the 25% fee award was reasonable and that it was properly within the range of class action settlement awards of comparable size and complexity.”
Settlement Approved
The judges, in affirming the settlement, pointed to Chhabria’s careful analysis of the various factors and discerned no flaw. Turning to one aspect of the settlement, they said: “The district court did not abuse its discretion in approving the settlement’s allocation plan, which awards ‘allocation points’ to class members based on the number of months they had an activated Facebook account within the class period and divides the settlement pro rata based on those points. The district court was well within its discretion in finding this plan reasonable and equitable among class members after it determined that the record supported a correlation between the length of time users were on Facebook and the potential degree to which third parties could access their information.”
The case is Feldman v. Facebook, Inc., 23-3550.
Facebook, Inc. is now Meta Platforms, Inc. Cambridge Analytica is defunct.
The misuse of Facebook users’ personal data surfaced in news reports by the New York Times and other publications in 2018.
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