Venkat Balasubramani over at Spam Notes has been covering developments in an interesting group of class actions against Blockbuster Video and Facebook. The cases arise out of Facebook’s Beacon feature, which causes news feed stories to be automatically generated about users’ purchases and other actions with online partners like Blockbuster. the plaintiffs in each of the cases allege violations of various privacy laws arising out of the use of the Beacon program.
The first of the three actions was filed against Blockbuster in federal court in Texas. A separate filing against Facebook and various of its online partners, including Blockbuster, followed in federal court in California. The Texas plaintiffs later filed a similar case against Facebook in Texas.
The parties in the California case recently reached a settlement. The settlement calls for Facebook to terminate the Beacon program and pay $9.5 million to a fund to be used to establish a “privacy foundation,” along with payment of administrative costs, incentive payments to the named plaintiffs, and attorneys’ fees. If finally approved, the settlement would include a release of claims by users against both Facebook and its affiliates, thus ostensibly resolving the claims in both Texas cases even though Facebook is the only named defendant in the California case.
As Balasubramani reports, the court in the California case has preliminarily approved the settlement and denied attempts by the Texas plaintiffs to intervene. The cases involve an interesting case study in the struggle between competing plaintiff groups. The settlement also raises interesting questions about the use of cy pres awards to charity in lieu of direct payments to class members and the preclusive effect of a class settlement as to claims against defendants who do not contribute to the settlement consideration.
Check out Spam Notes for the latest developments as well as links to key filings and settlement documents.