A recent The Recorder story, “Court Approves Facebook Class Settlement, Shaves Attorney Fees,” reports that a federal judge gave final approval to a $20 million settlement but took an axe to the $7.5 million in fees requested by plaintiffs’ attorneys.  Fraley v. Facebook was filed in March 2011 on behalf of some 150 million social network users whose names and likenesses were used to promote products and services through Facebook’s “Sponsored Stories” advertising feature.

The settlement approved by U.S. District Judge Richard Seeborg provides for each Facebook user who submitted a valid claim to receive $15, with remaining funds disbursed to 14 organizations focused on consumer protection, privacy and other issues raised in the suit.  Facebook Inc. is also required to improve its disclosure practices, giving users more control over when and how their names and photos will be used.  The company must also create special controls for minors.

Seeborg granted the plaintiffs’ motion for attorney fees, costs and incentive awards, but reduced some amounts.  The class had moved to recoup $7.5 million in attorney fees, which marked 37.5 percent of the settlement fund.  Though above the typical 25 percent benchmark, plaintiffs’ lawyers argued their fees should reflect the value of the injunctive relief secured for the class.  Seeborg rejected that approach, finding “nothing to suggest…that any class member will see a single dollar more in his or her pocket as a result of any of the injunctive provisions.”

Instead, he awarded plaintiffs’ lawyers 25 percent of the settlement fund after the deduction of administrative expenses, incentive awards and costs.  Those payments are expected to total roughly $1.1 million, making the fee award approximately $4.7 million.

For more on the settlement, visit http://www.fraleyfacebooksettlement.com/