Ginger McCall v. Facebook, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

SEAN LANE; MOHANNAED SHEIKHA; 

SEAN MARTIN; ALI SAMMOUR;

MOHAMMAED ZIDAN; SARA KARROW;

COLBY HENSON; DENTON HUNKER;

FIRAS SHEIKHA; HASSEN SHEIKHA;

LINDA STEWART; TINA TRAN;

MATTHEW SMITH; ERICA PARNELL;

JOHN CONWAY; PHILLIP HUERTA;

ALICIA HUNKER; MEGAN LYNN

HANCOCK, a minor, by and through her parent Rebecca Holey; AUSTIN

MUHS; CATHERINE HARRIS; MARIO

HERRERA; MARYAM HOSSEINY,

individually and on behalf of themselves and all others similarly No. 10-16380 situated,  D.C. No. Plaintiffs-Appellees, 5:08-cv-03845-RS v. FACEBOOK, INC., a Delaware corporation; BLOCKBUSTER, INC., a Delaware corporation; FANDANGO, INC., a Delaware corporation; HOTWIRE, INC., a Delaware corporation; STA TRAVEL, INC., a Delaware corporation; OVERSTOCK.COM, INC., a Delaware corporation; ZAPPOS.COM, INC., a Delaware corporation; GAMEFLY, INC., a Delaware corporation, Defendants-Appellees, 

11531 11532 MCCALL v. FACEBOOK, INC.

GINGER MCCALL, Class Member,   Objector-Appellant. 

SEAN LANE; MOHANNAED SHEIKHA; …

Opinion by Judge HUG; Dissent by Judge KLEINFELD.

OPINION

The question presented is whether the district court abused its discretion in approving the parties’ $9.5 million settlement agreement as “fair, reasonable, and adequate,” either because a Facebook employee sits on the board of the organization distributing cy pres funds or because the settlement amount was too low. We hold that it did not.

I

Facebook is an online social network where members develop personalized web profiles to interact and share information with other members. The type of information members share varies considerably, and it can include news headlines, photographs, videos, personal stories, and activity updates. Members generally publish information they want to share to their personal profile, and the information is thereby broadcasted to the members’ online “friends” (i.e., other members in their online network).

In November of 2007, Facebook launched a new program called “Beacon.” Facebook described the purpose of the Beacon program as allowing its members to share with friends information about what they do elsewhere on the Internet. The program operated by updating a member’s personal profile to…

dissenting:

I respectfully dissent. This settlement perverts the class action into a device for depriving victims of remedies for wrongs, while enriching both the wrongdoers and the lawyers purporting to represent the class.

A. The Facts.

1. “Beacon.”

Millions of people connect themselves to their “friends” on Facebook. Some Face-book “friends” are friends in the traditional sense, people we know and like. Some are more in the nature of contacts, or acquaintances, or people we think may want to see what we post. For people who regularly use Facebook to communicate, “friends” may merely be their address book. The lead plaintiff in this case, Sean Lane, had over 700 Facebook “friends.” Facebook operates like a bulletin board, so that “friends” can see whatever a user chooses to post and not make private.

Facebook is “free,” furnished without a subscription price. The company makes money by selling advertising. To make such sales more lucrative, Facebook started a program called “Beacon” in November 2007. Like an actual beacon, the program shone light to make something easier to see: in this case, a user’s “friends” could see whatever he had bought from *827 companies that paid…