Last week, in a decision that confirms the viability of cy pres settlements in privacy class action cases, the Ninth Circuit affirmed approval of a class action injunctive relief and cy pres-only settlement in In re Google Inc. Street View Electronic Communications Litigation, No. 20-15616, 2021 WL 6111383.  The case featured Wiretap Act claims based on Google Street View vehicles’ collection of “payload data,” including emails, passwords, and documents that Internet users transmitted over unencrypted Wi-Fi networks.

After years of litigation, the district court approved a settlement for a class of approximately 60 million wireless network device users whose payload data Google obtained.  The settlement required Google to extend by several years its compliance with the “Assurance of Voluntary Compliance” (AVC) that it entered to resolve related investigations by state attorneys general.  The settlement also required Google to create a $13 million settlement fund to pay for attorneys’ fees, litigation and administrative costs, and service awards for class representatives, with any remaining amount to go to cy pres recipients rather than class members.

Two putative class members objected to the settlement on multiple grounds, including that the settlement fund should have been distributed to class members rather than cy pres recipients.  The Ninth Circuit rejected the objectors’ arguments across the board.  First, it refused to adopt a rule that cy pres-only settlements are inadequate as a matter of law.  Second, it affirmed that a cy pres award was permissible in the circumstances of this case, which included a low per-class member monetary recovery and difficulty in determining class membership.

In assessing whether the settlement was “fair, reasonable, and adequate” under Rule 23(e)(2), the Ninth Circuit considered both the value of the injunctive relief and the cy pres award.  And even though the injunctive relief added only incrementally to Google’s preexisting obligations under the AVC, the Ninth Circuit held that extending the period of compliance with the AVC by several years and requiring additional educational materials to be posted online provided benefit to the class.

Finally, the Ninth Circuit rejected the objectors’ challenge to the privacy organizations selected as cy pres recipients, including the ACLU and the Electronic Privacy Information Center (“EPIC”).  The objectors urged the Ninth Circuit to adopt a new standard for approving cy pres recipients, which would require examination of whether “any party has any significant prior affiliation with the intended recipient that would raise substantial questions about whether the award was made on the merits.”  The objectors argued that because the ACLU, EPIC, and other recipients had “pre-existing relationship[s]” with class counsel and defense counsel and had received cy pres awards from Google and other tech companies in other cases, they were not appropriate recipients here, but the Ninth Circuit refused to adopt such an “expansive proposed test.”

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Photo of Amy Heath Amy Heath

Amy Heath is a class action and commercial litigator who helps the world’s leading companies in the technology, consumer products, and other sectors navigate their most significant disputes. She has had exceptional success with early dispositive motions, distilling complex arguments to show why…

Amy Heath is a class action and commercial litigator who helps the world’s leading companies in the technology, consumer products, and other sectors navigate their most significant disputes. She has had exceptional success with early dispositive motions, distilling complex arguments to show why claims should not proceed. A former intelligence analyst, Amy brings the same sound strategic judgment, analytical rigor, attention to detail, efficiency, and commitment to client service to her practice of law.

Amy frequently litigates matters involving privacy, wiretap, contract, consumer protection, fraud, unfair competition, antitrust, and intellectual property claims. She has significant experience throughout the litigation lifecycle, including developing strategies to coordinate litigation across jurisdictions, including multidistrict litigation; briefing dismissal, class certification, and summary judgment motions; effectively navigating joint defense groups; and drafting and arguing appeals.

Amy also regularly counsels clients on the strategic considerations related to arbitration agreements. She drafts and revises arbitration clauses and class action waivers in terms of service, including to mitigate mass arbitration risk.

Before joining the firm, Amy clerked for the Honorable Michelle T. Friedland of the United States Court of Appeals for the Ninth Circuit and the Honorable Lucy H. Koh, then of the United States District Court for the Northern District of California. Amy maintains an active pro bono practice that focuses on direct services for individual clients.

Before practicing law, Amy served as an intelligence analyst at CIA, where she was a regular contributor to the President’s Daily Brief.

Photo of Kathryn Cahoy Kathryn Cahoy

Kate Cahoy co-chairs the firm’s Class Actions Litigation Practice Group and serves on the leadership committee for the firm’s Technology Industry Group. She defends clients in complex, high-stakes class action disputes and has achieved significant victories across various industries, including technology, entertainment, consumer…

Kate Cahoy co-chairs the firm’s Class Actions Litigation Practice Group and serves on the leadership committee for the firm’s Technology Industry Group. She defends clients in complex, high-stakes class action disputes and has achieved significant victories across various industries, including technology, entertainment, consumer products, and financial services. Kate has also played a key role in developing the firm’s mass arbitration defense practice. She regularly advises companies on the risks associated with mass arbitration and has a proven track record of successfully defending clients against these challenges.

Leveraging her success in class action litigation and arbitration, Kate helps clients develop strategic and innovative solutions to their most challenging legal issues. She has extensive experience litigating cases brought under California’s Section 17200 and other consumer protection, competition, and privacy laws, including the Sherman Act, California Consumer Privacy Act (CCPA), California Invasion of Privacy Act (CIPA), Wiretap Act, Stored Communications Act, Children’s Online Privacy Protection Act (COPPA), Video Privacy Protection Act (VPPA), along with common law and constitutional rights of privacy, among others.

Recent Successes:

Represented Meta (formerly Facebook) in a putative nationwide advertiser class action alleging violations under the California Unfair Competition Law (UCL) related to charges from allegedly “fake” accounts. Successfully narrowed claims at the pleadings stage, defeated class certification, opposed a Rule 23(f) petition, won summary judgment, and defended the victory on appeal to the Ninth Circuit. The Daily Journal selected Covington’s defense of Meta as one of its 2021 Top Verdicts, and Law.com recognized Kate as a Litigator of the Week Shoutout.
Defeated a landmark class action lawsuit against Microsoft and OpenAI contending that the defendants scraped data from the internet for training generative AI services and incorporated data from users’ prompts, allegedly in violation of CIPA, the Computer Fraud and Abuse Act (CFAA), and other privacy and consumer protection laws.

Kate regularly contributes to the firm’s blog, Inside Class Actions, and was recently featured in a Litigation Daily interview titled “Where Privacy Laws and Litigation Trends Collide.” In recognition of her achievements in privacy and antitrust class action litigation, the Daily Journal named her as one of their Top Antitrust Lawyers (2024), Top Cyber Lawyers (2022), and Top Women Lawyers in California (2023). Additionally, she received the Women of Influence award from the Silicon Valley Business Journal and was recognized by Daily Journal as a Top Attorney Under 40.