A recent Law 360 story by Lauren Berg, “$650M Facebook Privacy Deal OK’d, $110M Atty Fees Trimmed,” reports that a California federal judge praised a $650 million settlement resolving claims that Facebook's facial recognition technology violated Illinois users' biometric privacy rights, calling it a "landmark result," but he trimmed the $110 million requested attorney fees to $97.5 million. U.S. District Judge James Donato gave his final stamp of approval to the multimillion-dollar deal resolving claims under the "new and untested" Illinois Biometric Information Privacy Act, calling it a major win for consumers in the "hotly contested" area of digital privacy.
The settlement will put at least $345 each into the hands of 1.6 million class members who filed claims, according to the order, and Facebook has agreed to set its "face recognition" default setting to "off" for all global users and delete all existing and stored face templates for the class members.
But Judge Donato also cut back the $110 million in attorney fees that class counsel at Edelson PC, Robbins Geller Rudman & Dowd LLP and Labaton Sucharow LLP asked for, saying the $650 million size of the settlement fund is not a typical case that warrants the use of a 25% contingency fee as a benchmark. The judge said in this case it would be more appropriate for him to adjust the benchmark percentage or employ the lodestar method instead to avoid "windfall profits" for class counsel.
"To be clear, the court recognizes the skill, dedication and hard work class counsel brought to this case and their clients," Judge Donato said. "The fact that the court cannot in good conscience award fees on the presumption of a 25% contingency cut should not be read as detracting from that in any way."
"It is simply a matter of fairness and proportion," the judge said. He said a 25% presumption is just too big to be applied to a settlement fund as large as this one. The class counsel spent more than 30,103 hours on the case, according to the order — including 9,577 hours by Robbins Geller, 8,103 hours by Labaton Sucharow and 12,423 hours by Edelson.
The judge adjusted the percentage rate from 16.9% of the settlement fund to 15%, giving the class counsel $97.5 million in attorney fees, according to the order. The judge said he also cross-checked that number with a lodestar calculation and found the award to be more reasonable than the one requested. But the judge said 15% of the attorney fee award will be held back pending further order. He granted the class counsel's request for $915,000 in expense reimbursement, finding sufficient documentation, according to the order.
The judge also reduced the incentive awards for the three class representatives — Nimesh Patel, Adam Pezen and Carlo Licata — from the requested $7,500 each to $5,000 each, saying that even though the requested amount would be a "minuscule proportion" of the settlement, it's still too high in comparison to the amount other class members will receive.
Judge Donato praised the parties' "proposed array of innovative ways to reach class members" and notify them of the settlement, including by direct email, Facebook's newsfeed notifications, publication in Illinois newspapers, a settlement website and an internet ad campaign. "These were robust measures, and they paid off in spades," the judge said.