Frank v. Gaos [SCOTUSbrief]
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Frank v. Gaos [SCOTUSbrief]

The case was originally brought by Pamela
Gaos and a couple of other named plaintiffs. They objected to Google’s, uh, business model
when it comes to internet searches. They filed the claim on behalf of themselves
and 129 million Americans, about 40% of the American public. There was a second motion to dismiss pending
when Gaos and Google came up with the current settlement that is the subject of the dispute. That settlement was approved over the objections
of Ted Frank and Melissa Holyoak. Frank and Holyoak objected to the settlement
agreement because the settlement agreement gives no money to the individual victims of
the case who were allegedly hurt by Google’s actions. The settlement in this case awards 8.5 million
dollars. Apart from 25% that goes to attorney’s fees,
the rest will go to a group of charitable organizations that have all promised to promote
internet privacy. The recipients of the cy pres awards have
ties to both plaintiff’s counsel and Google, the defendant. Cy pres awards started out as a way of redirecting
funds that were originally granted to a purpose that is no longer possible. It could be that it’s illegal. It could be that the subject of the grant
is no longer available. Rather than send the money back, the court
can invoke cy pres in order to designate the money for a similar purpose. Class actions don’t often involve cy pres
awards, but they have become more common in recent years. The reason is because class actions often
reach a point where all of the known victims have been compensated, and there’s still money
left over. Rather than send the money back to the defendant,
courts can invoke the cy pres doctrine to allocate the funds for a purpose similar to
that which the class action was intended to receive. There are two primary concerns that arise
from that. The first is a due process concern, that you
are taking the money that technically belongs to the victims, to Google’s victims in this
case, and you are giving it to a third party without meaningful consent of the victims. In other words, their money is going to a
third party and they really didn’t have a choice in the matter. That’s the due process concern. The second concern is a First Amendment concern,
that by requiring the individual victims to give their claims or the value of their claims
to a third party, you are forcing them to speak in the voice of that charitable organization
who has its own goals. They may be laudable goals, but they may also
not be the goals of the individual victims, and by forcing those individual victims to
give their money to the charities, you are in fact forcing them to speak in violation
of the First Amendment. The best argument for Frank is that cy pres-only
settlements are a collusion between the defendant’s and the plaintiff’s lawyers to enrich themselves
at the expense of the class. By disposing of plaintiff’s legal claims without
providing the victims any actual compensation, then the defendant and the plaintiff’s lawyers,
and the courts by association, are depriving those individual plaintiffs of their due process
rights. The best argument for Gaos in this case is
that these type of settlements are necessary to re- remediate important societal harms
and promote important societal goals and that this is a voluntary settlement between plaintiffs
and defendants, and that individual objections by one or two out of 129 million should not
be allowed to derail an important settlement of this type. One side of the case says that individual
victims deserve better protection than this. The oth- other side of the case says that
these types of settlements are an important tool for promoting social welfare and that
social welfare is a legitimate aim of class action litigation.


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