There have been a number of significant settlements recently in the class action litigation arena, some of which have been approved by a court. A brief summary of each case is set out below.
$650 Million Facebook Privacy Settlement Gets Final Approval
U.S. District Judge James Donato has given final approval to the $650 million settlement resolving claims that Facebook’s facial recognition technology violated Illinois users’ biometric privacy rights. The settlement resolves claims under the Illinois Biometric Information Privacy Act. This is said to be a major win for consumers in the “hotly contested” area of digital privacy. Judge Donato praised the settlement, calling it a “landmark result.”
There have been 1.6 million class members who filed claims. Facebook has also 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.
The settlement ends a six-year-old consolidated class action over claims the social media giant breached BIPA — one of only three state biometric privacy laws in the U.S. and the only one to include a private right of action — by using facial recognition technology without users’ consent to fuel its photo tag suggestion feature.
Based on reports, this is “the largest cash privacy class action settlement in history.”
The class is represented by Jay Edelson, Benjamin H. Richman and Alexander G. Tievsky of Edelson PC, Paul J. Geller and Stuart A. Davidson of Robbins Geller Rudman & Dowd LLP and Michael P. Canty and Corban S. Rhodes of Labaton Sucharow LLP. The case is In re: Facebook Biometric Information Privacy Litigation (case number 3:15-cv-03747) in the U.S. District Court for the Northern District of California.
TikTok Users Agree To $92 Million Settlement To End Biometric Privacy MDL
The parties involved in multidistrict litigation against the social media company TikTok have asked an Illinois federal judge to approve a $92 million litigation wide settlement. The plaintiffs in the case alleged biometric privacy violations against the short-form video-sharing app and its parent company, ByteDance.
The settlement, if approved, would end 21 proposed class actions against TikTok. The various class actions alleged that TikTok does not inform users — many of whom are children and teenagers — that its facial recognition technology collects and stores their biometric identifiers. Additionally, TikTok does not get the users’ written permission before doing so, as required by Illinois’ Biometric Information Privacy Act.
Under the settlement agreement, the users propose two settlement classes: a nationwide class of people who used TikTok or its Musical.ly predecessor and an Illinois subclass. The users estimate that the Illinois subclass size is about 1.4 million people and the nationwide class has about 89 million members, including the Illinois subclass.
The settlement also includes injunctive relief by requiring TikTok to make certain disclosures and initiate a new data privacy compliance training program for all of its employees and contractors.
The social media company will also require new training on compliance with data privacy laws and company procedures for all incoming employees and contractors, with annual training thereafter. TikTok will hire a third party to review the compliance training for the next three years.
Objectors to the proposed settlement said in the runup to the proceedings that TikTok’s proposed notice plan was defective and would result in artificially low claims that make the “paltry” deal sound better than it is for users of the video-sharing app. They argue that $92 million to release the claims of roughly 89 million class members undervalues class claims, particularly when compared to Facebook Inc.’s recently approved $650 million biometric privacy settlement, which is mentioned above.
The plaintiffs are represented by Carlson Lynch LLP, Fegan Scott LLC, Bird Marella Boxer Wolpert Nessim Drooks Lincenberg & Rhow PC, Freed Kanner London & Millen LLC, Susman Godfrey LLP, Bottini & Bottini Inc., Hausfeld LLP, Burns Charest LLP and Clifford Law Offices PC.
The case is In re: TikTok Inc. Consumer Privacy Litigation (case number 1:20-cv-04699) in the U.S. District Court for the Northern District of Illinois.
Apple iPhone Slowdown Settlement
A California federal judge has approved a settlement of up to $500 million for iPhone users who accused Apple of deliberately slowing down their devices with an update.
In a pair of orders filed last month, U.S. District Judge Edward J. Davila first granted final approval to the settlement, which will see Apple pay out between $310 million and $500 million — which the judge called one of the largest class action settlements in the circuit. The second-order deal with a request for fees to be awarded to Cotchett Pitre & McCarthy LLP; Kaplan Fox & Kilsheimer LLP; the Law Offices of Andrew J. Brown; and the Brandi Law Firm.
The settlement resolves dozens of consumer protection lawsuits filed in 2018 after Apple admitted to issuing software updates that slowed certain iPhones. The suits allege that Apple designed its software updates to slow down some phone models, nudging consumers to buy newer iPhones.
Under the agreement, Apple agreed to pay up to $500 million in total, depending on the amount of iPhone users to participate in the settlement, with a minimum settlement fund of $310 million.
The consumers are represented by Joseph W. Cotchett, Mark Molumphy and Elle D. Lewis of Cotchett Pitre & McCarthy LLP; Laurence D. King and Frederic S. Fox of Kaplan Fox & Kilsheimer LLP; Andrew J. Brown of the Law Offices of Andrew J. Brown; and Thomas J. Brandi and Terence D. Edwards of The Brandi Law Firm.
The case is In re: /Apple Inc. Device Performance Litigation (case number 5:18-md-02827) in the U.S. District Court for the Northern District of California.
Reckitt Benckiser To Pay $53 Million To Settle False Ad Suit
Reckitt Benckiser LLC has agreed to pay $53 million to settle a certified class action claiming the dietary supplement maker had falsely advertised one of its products as treating joint pain. This settlement is believed to be “the largest dietary supplement class action settlement ever reached.”
The consumers had claimed that the company falsely advertised its “Move Free Advanced” dietary supplement. U.S. District Judge Vince Chhabria certified both a California and a New York class of buyers in June 2019, finding that the plaintiffs had shown they could support both their false advertising and damages claims.
In their suit, the supplement buyers said they and others had been induced to buy MFA by packaging and advertising, claiming the supplement treats joint pain and stiffness. However, more than a dozen independent studies since the late 1990s have found no improvement in pain, mobility, or quality of life for patients treated with glucosamine or chondroitin, separately or in combination, and that the same had been found for patients treated with MFA’s secondary ingredients, the consumers alleged.
Judge Chhabria said the consumers couldn’t seek extra damages under California law for deceptive business practices targeting senior citizens, saying the statute requires evidence of “substantial” economic harm and the supplements at issue are “relatively inexpensive.”
The consumers are represented by Timothy G. Blood and Thomas J. O’Reardon of Blood Hurst & O’Reardon LLP, and Craig M. Peters of Altair Law. The case is Yamagata et al. v. Reckitt Benckiser LLC (case number 3:17-cv-03529) in the U.S. District Court for the Northern District of California.
Ex-Fresh Market Investors Reach $27.5 Million Settlement In Merger Suit
Former public stockholders of specialty grocery chain The Fresh Market reached a $27.5 million settlement in Delaware Chancery Court. This will resolve a long-running suit over a purportedly unfair, $1.4 billion take-private sale of the business to affiliates of Apollo Global Capital in 2016.
Stockholders must approve the agreement, and the court also must approve the settlement. Insurers or indemnifying parties will pay for those sued other than JPMorgan Chase & Co., the deal’s financial adviser.
In the case, former Fresh Market CEO and chairman Ray Berry was accused of acting disloyally in concealing or lying about his private communications on terms of Apollo’s acquisition of the gourmet grocer to Apollo, as well as an agreement on rollover of Berry’s equity as part of the deal.
Former company president and CEO Richard Anicetti, who succeeded Berry, and former chief legal officer and senior vice president Scott Duggan were accused of fiduciary duty breaches and are parties to the settlement as well.
The agreement potentially marks the final chapter in a tainted sale process and stockholder challenge dismissed by Vice Chancellor Sam Glasscock III in September 2017 but revived by a three-judge panel of Delaware’s Supreme Court in 2018. The justices rejected the vice chancellor’s conclusion that stockholders were adequately informed about the deal’s terms during a tender offer, including about financial adviser JPMorgan’s alleged deception of the Fresh Market’s board about its communications with Apollo. The decision was seen as refining Delaware’s standards for judging whether decisions by minority or independent stockholders can be viewed as fully informed and when business judgment deference should give way to more plaintiff-friendly review standards.
Stockholder Elizabeth Morrison and the class are represented by Joel Friedlander, Jeffrey M. Gorris and Christopher P. Quinn of Friedlander & Gorris PA and Randall J. Barron and Christopher H. Lyons of Robbins Geller Rudman & Dowd LLP.
The case is Elizabeth Morrison et al. v. Ray Berry et al. (case number 12808-VCG) in the Court of Chancery of the State of Delaware.
Judge Gives Early Approval To $104 Million Settlement With Chicken Companies
An Illinois federal judge has granted preliminary approval to a $104 million settlement with four poultry producers to resolve claims from a group of consumers who say the companies engaged in a long-term scheme to fix prices for broiler chickens.
U.S. District Judge Thomas Durkin said during a hearing on March 22 that the settlement — which was reached with only some of the chicken producer defendants in the case (Tyson Foods, Fieldale Farms, Peco Foods and George’s Inc.) appeared to be fair and reasonable and was reached after hard-fought negotiations, with millions of documents exchanged and more than 100 depositions taken.
Judge Durkin noted that he had “never confronted any class action with this many potential plaintiffs.” That could pose a problem relating to the notice issue.
After granting initial approval, Judge Durkin set a hearing date for June 22 to revisit the notice issue. According to the motion for early approval, the settlements were reached with Tyson for $99 million, Peco for $1.9 million, and George’s for $1.9 million and Fieldale for $1.7 million.
Tyson has disclosed that it will pay $221.5 million to resolve all class claims in the case, which is also being pursued by groups of commercial and indirect purchaser plaintiffs, as well as end-users. Direct buyers had recently gained early approval of an $80 million payment from Tyson as part of $155 million in settlements with direct buyers.
The litigation began in September 2016 when private plaintiffs began claiming the nation’s largest broiler chicken producers coordinated and limited chicken production to raise prices and exchanged detailed information about prices, capacity and sales volume through data compiler Agri Stats Inc.
The case is In re: Broiler Chicken Antitrust Litigation (case number 1:16-cv-08637) in the U.S. District Court for the Northern District of Illinois.
PHARMACY BENEFITS MANAGER (PBM) LITIGATION