Federal Court Rejects Google Email Scan Class Settlement

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By Jimmy H. Koo

A group of Alphabet Inc.'s Google consumers failed to convince Judge Lucy H. Koh to approve a proposed settlement of class claims over the company’s non-consensual scanning and storing of non-user emails for advertising purposes ( Matera v. Google, Inc. , 2017 BL 81418, N.D. Cal., No. 15-cv-04062, 3/16/17 ).

The notice of settlement is “difficult to understand” and “does not clearly disclose what technical changes the settlement requires,” Koh, of the U.S. District Court for the Northern District of California, ruled March 15. The move to reject a settlement proposal, particularly by a judge whose courtroom hosts such Silicon Valley tech giants as Facebook Inc. and Apple Inc., may not bode well for those seeking a way to more easily resolve consumer class actions.

The plaintiffs’ bid for settlement would have enjoined Google from email scanning without consent, released all class claims and paid $2.2 million in attorneys’ fees. But the parties didn’t provide authority explaining why the proposed injunction would bring Google into compliance with the federal Wiretap Act or the California Invasion of Privacy Act, Koh said.

Google declined Bloomberg BNA’s requests for comment.

Injunction-Only Settlements Overused

Jay Edelson, partner and founder of plaintiff-side class action law firm Edelson PC in Chicago, told Bloomberg BNA March 16 that he is “encouraged that Judge Koh is carefully scrutinizing the deal to make sure it benefits the class.” Injunction-only privacy settlements “where significant damages were originally being sought should be the exception, rather than the norm,” he said.

Injunction-only settlements “are being over-utilized, which will lead to criticism that the settlements benefit the attorneys more than their clients,” Edelson said.

According to the plaintiffs’ amended class complaint, Google didn’t have a policy of obtaining non-users’ consent or notifying nonusers about its email scanning practice. In settling the allegations, Google agreed in December 2016 to eliminate the processing of private emails for advertising purposes prior to inbox delivery.

Although the settlement doesn’t include a monetary award, it doesn’t bar individual plaintiffs from seeking monetary damages in separate claims.

Rejecting the proposed settlement, Koh said the court couldn’t conclude that the settlement is fundamentally fair, adequate and reasonable.

Cooley LLP represents Google. Gallo LLP, Carney Bates & Pulliam PLLC and Lieff Cabraser Heimann & Bernstein LLP represent the putative class.

To contact the reporter on this story: Jimmy H. Koo in Washington at jkoo@bna.com

To contact the editor responsible for this story: Donald Aplin at daplin@bna.com

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