Time to end class-action settlements that only reward lawyers, not plaintiffs.By David B. Rivkin Jr. and Lee A. Casey
The Supreme Court will soon decide whether to hear a case that could determine the future of particularly abusive class-action settlements. Not abusive in the usual sense, where a class of injured plaintiffs is awarded an exorbitant amount. Instead, these settlements are abusive in that absolutely nothing goes to the injured plaintiffs. At issue is whether federal courts may approve such agreements rewarding lawyers and defendants, leaving plaintiffs out in the cold.
The case is Marek v. Lane, and it arose out of Facebook’s notorious 2007 “Beacon” program. Beacon gathered and published information about Facebook users’ other Internet activities as an advertising and marketing tool, invading the privacy of millions. It may also have violated a number of state and federal laws, including the 1988 Video Privacy Protection Act, which includes a liquidated-damages provision of $2,500 for each offense. A class-action suit was filed in 2008 on behalf of as many as 3.6 million injured social networkers.