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tv   Frank v. Gaos Oral Argument  CSPAN  November 19, 2018 12:38pm-1:45pm EST

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privacy issues. he is interviewed by john handle. >> the privacy shall process involves countries applying to was justrce department a series of quality controls and the company will warrant that they are part of the privacy shield. and in we do the enforcing. we have a number of ways that we make sure that companies that make promises about privacy shield live up to their promises and where they don't, we punish them for that. atch "the communicators," .ight eastern on c-span2 >> the supreme court heard oral on and on how monetary awards from class-action settlement are distributed. auch most ofsus ga
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the $8.5 million of what went to attorneys and charitable groups like aarp, not to those injured. the plaintiff's of taken the nation's highest court, saying such class-action settlements are unfair. the oral argument is about hour. >> the best way to interpret the text is to align councils best interests with those of the absent class members. in guarantee versus roper, page 339, this court called it an abuse when class members were not the primary beneficiaries of a class-action.
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how can it be fair and reasonable for a court to endorse such an abuse? >> why is it such an abuse, because frankly the class numbers will get nothing involved. here at least they get a indirect benefit. >> the indirect benefit is less than nothing. it was at least feasible to distribute money to class members and said class counsel chose to agree to a settlement that directed that money elsewhere. >> how much would it come to each class member? >> each claiming class member could have probably gotten between five and $10. the courts rejected in all site settlement. >> we're going to make this brief that laid out pretty thoroughly the costs associated with first identifying class, second preparing the mailing,
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third executing the mailing, and then processing the claims that came up with a figure of $.67. putting aside that there may be a question about whether the trial court adequately determine feasibility. assuming it did, why would it have been an abuse of discretion for the court to believe that processing $.67 didn't make sense because the cost would outweigh what they would pay? >> the district court applied the wrong legal standard. >> the feasibility is can we give 10% of the class something even if nobody else gets anything. meaning, what you would like to do is select 10% of the class and pay them a loan and do nothing for everybody else. >> no, we would love to get everybody in the class an opportunity to make a claim. a very small minority would not be indifferent to the opportunity. >> everybody else would not even receive a direct benefit. >> they would receive the opportunity to make a claim. >> they always have that opportunity.
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>> they don't have an opportunity here. i asked class members. class members are deprived of that opportunity. >> they could opt out. >> they could opt out, but that does not make the settlement fair. >> back to my point which is are you disputing the finding of fact that under the normal application of feasibility, whether costs outweighs the payment or costs far exceeds whatever could be given out, are you disputing that? >> the court never made that finding. the court applied the 9th circuit stimulus test under lane versus facebook, which required it to divide by the denominator of the entire class. in reality settlements are settled all the time for well under 1 dollar per class member and they successfully distribute that money to the class because most class members are simply indifferent to the opportunity for these small sums. >> and is it all right to have some kind of a -- operate, with all the class members who don't?
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>> i don't understand the question justice, i apologize. >> suppose the class members are notified and only 10% of them make a claim. what happens to the rest of the amount that was agreed upon as a settlement? >> first of all in practice i just want to let the court know that 10% is an extraordinarily high claim rate.
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it is typically below 1%. >> 99%. >> absolutely. >> in the typical settlement, you have a fund of a few million dollars that is tens of millions of class members have the opportunity to make a claim. very small percentage makes a claim. the fund is distributed pro rata to them. that is what happens in fraley. they still had money left over even after giving every claiming class member $15, even though we were talking $9 million for 150 million class members. that is six cents per class member. >> what do they do? do they wait until a reasonable period? >> they will establish 90 days or 60 days or 120 days to make a claim.
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the claims, either electronically or through paper, depending on how claims process is set up. sometimes there is an audit to make sure there aren't fraudulent claims. that is what happens in carrier iq, even though we were talking pennies per class member, and only cost them $600,000 to distribute a few million dollars to 30 million class members and still audit the claims and reject 30% of the claims. >> i'm sorry, i'm talking -- this is a full cy pres award, meaning there is no direct benefit to the class. what about the residuals -- residual cy pres? i thought if a fund is created and the claimants are all paid off, there's some money left over. and that is given indirectly, often. >> circuits differ on that.
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the seventh rejects a proposal because they recognize that the settling parties have the ability to adjust the claims rate depending on how difficult they make the claims process. in one case there was a $1.1 million residual and 12 class members, though that was eight cents per class member, court rejected the idea that that was a benefit of the class and said you've made the claim process too hard and require them to redo the settlement on remand. millions more dollars went to the class because they changed the -- the claims process and made it easier for class members to make claims. so if you have a residual and
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you incentivize the attorneys to prefer the residual to the actual claims, what will happen is you'll have a very difficult claims process. there is a third circuit case of a $35 million fund, and -- but you do fill out a five page claim form to claim your five dollars. and so very few class members did that. they were only going to distribute $3 million with over 15 million to cy pres. in the third circuit rejected that, that the district court failed to prioritize direct benefit to the class. >> assuming all of that -- but the summa very efficient claims process will is assume a careful feasibility study by the district court. you are still taking the position that if there is a residual for any reason that's legitimate, there's been an easy claims process, there's been a simple distribution, whatever, you are still saying that an indirect benefit, a partial cy pres, is not ok? >> i am saying that you can't reward class counsel for it. you have to incentivize them to prioritize the direct benefit. >> so your position is that cy pres is ok, but we should write
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legislation in our opinion saying that we can't pay class counsel for that. have you read the third circuit opinion that talks about this and says there's a lot to balance in this issue, and are the courts the appropriate one or is congress the appropriate one? or is the individual district court's discretion appropriate until congress looks at this decides? >> i think we'll 23e means something. this court has called it an abuse. it is clear -- it's not the case that everything goes under rule 23e so long as the district court rubberstamps it. >> in a case such as this, is in the effort made, and would it even be possible, to determine whether every absent class
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member or even most of the absent class members regard the beneficiaries of the cy pres award as entities to which they would like to make a contribution? even be possible, to determine >> it is ray possible to establish a claims process where so many checks a box and said, instead of sending me a check for six dollars, send it to the american cancer society. nobody does that, or at least we haven't seen settlements that do that. and the reality is, if class members want to send their money to charity, they can do it without the intermediary of class counsel. >> so who decides who these beneficiaries are going to be? >> in various from settlement to settlement. in this case, class counsel and google negotiated and agreed to a set of six beneficiaries. that process was opaque, and we don't understand which beneficiaries did make the cut
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and why they did make the cut, but -- they chose these particular beneficiaries. >> so the parties and the lawyers get together and they choose beneficiaries that they personally would like to subsidize echo that is how it works? >> that is usually how it works. i have seen some as were the judge says, i don't like these beneficiaries, pick these beneficiaries. >> were the judge has designated i have seen some as were the judge says, i don't like these the beneficiaries? >> there are settlement structured were the judge designates the beneficiaries. and and another google settlement that we discussed in our opening brief, the parties designated a beneficiary and the court redesignated the beneficiary. >> mr. frank -- >> i'm sorry. go ahead. >> i was going to change the subject. >> so was i. [laughter] >> jurisdiction? >> yes. >> go for it.
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>> may ask you, mr. frank, to address the standing issue in this case, to talk about what you think the harm was and whether any court has addressed were theories about the harm? >> are you talking my harm or the harm of the plaintiffs? >> the harm of the plaintiffs. >> the harm of the plaintiffs, we discussed that at pages 25 and 26 of our reply brief. one of the named plaintiffs, anthony italiano, alleges a statutory violation that corresponds to the common law tort of public disclosure of private facts. in the lower courts are unanimous in holding that kind of statutory claim satisfies
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spokeo. even on remand, spokeo, the ninth circuit court found standing, and this court denied certain the second time up. >> i had thought the lower court thought it would -- they were standing just because it was a statutory claim and that there was no reason that the plaintiff had to show a particular raised or concrete injury. spokeo. even on remand, spokeo, the ninth circuit court found >> that is certainly the wrong standard for the district court to have applied, with later supreme court jurisprudence indicating that. but we can determine from the face of the complaint that anthony italiano made an allegation of concrete injury within the ambit of what justice thomas is concurrence and spokeo indicated was acceptable and what lower courts have unanimously indicated that it was acceptable. >> i was curious where you are going to come down before you filed your brief. if there's dust and income the
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whole class action is so now, right? >> that would be the right thing to do under arizonans for proper english or official english. that is exactly what the court did. they found the lower court did not have jurisdiction and vacated everything. >> to follow up with justice kagan who anticipated exactly where wanted to go -- you say there's an allegation with respect to mr. italiano that he was injured. but do we know that he was injured? is there any evidence that his personal information, for example, wasn't available through the white pages and otherwise publish so there was no injury in fact? >> well, that goes to merits. if i allege my friend here punched me in the head and owes me over $75,000 and we are citizens of different states, i have a claim first standing even if that claim is completely fictional. >> fair enough, but here we are entering the final judgment and should we at least remand to the
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lower court to make a decision as to whether there is actually standing as opposed to mere allegation of standing? >> i don't think that is the case. i think the allegation of concrete injury establishes the standing, and then the merits questions always different than the jurisdictional question. >> what is the private -- i mean, what i have here, my law clerk brought this up, is a search that mr. italiano engaged in was his name -- certainly public -- his home address -- i imagine that's public -- name in bankruptcy, his name in foreclosure proceedings, his name in short sale proceedings, his name in facebook, and his
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name and the name of his then soon-to-be ex-wife and the words "forensic accounting." if those are all the things that he looked at, how are -- what concrete injury was there because somebody might discover through google that he made those searches? i mean, i don't quite see how this is some kind of secret or private or -- information. and i don't see a ledge anywhere how those things were hurt. so i had a hard time establishing this from spokeo. and the judge, by the way, didn't even try. he just said the very fact that the statute for bids it is enough, which i think is one thing spokeo says is wrong. >> i agree the judge did not apply the spokeo standard. and if you think the ninth circuit would do something differently here than it would in spokeo or have a chance at doing something differently here, the maybe the appropriate decision is to reman and let them consider that. and while the case for mr. italiano's injury may be weak, which suggests why the settlement for such an event is will amount of the statutory
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damages, that does not change the allegation that was made and that -- >> the allegation was made, but where is an allegation of some kind of injury that would actually concretely and particularly hurt him? by some of you looking up at google and discovering he made those searches? >> even under common law, that those searches? >> even under common law, that is public disclosure of private facts -- >> which other private facts? >> the dissolution of his marriage and things of that nature. >> again, we are stuck in the same place i think, which is you have to assume that information isn't otherwise available -- fine, you don't one approve it, then an allegation of it. there is no obligation that the information wasn't otherwise available. what we do about that? i think that is the part we are struggling with here. >> if the complaint is not strong enough to establish the concrete injury under what a majority of the court indicated would be sufficient under spokeo
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and with the lower courts have repeatedly found with respect to spokeo, the appropriate decision is to have a limited remand and take a backup, summing the court finds jurisdiction. >> putting aside the question of whether it is pertinent to the standing analysis, just so i understand the claims, the disclosures go to any searches that somebody engages in, correct? >> that is correct. >> ok. so it may be the have the wrong named plaintiff if the disclosures are not private. >> if both gaos and italiano don't qualify, then they may have the wrong named plaintiff. if one of the name to plaintiff satisfies it -- >> but it has to be one of the named plaintiffs?
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>> it has to be one of the named plaintiffs. >> you are not challenging that. >> we are not challenging standing. we're not challenging the court's finding. nobody is challenging the court's finding under rule 23a that all class members have a common injury. the ninth circuit standard creates perverse incentives for class counsel to divert money away from the clients and to third parties. when courts have insisted that attorneys don't get paid unless the clients get paid, the attorneys find ways to improve the claims process and make money get to the class. >> i understand your fear, but as i look at the full cy pres
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awards, they are rare. the list that i have looked at is, what, five and how many years? it is not as if it is occurring routinely, nor one. number two, you do point to some potentially abusive situations. but in all the situations, it is the cases were the circuit court rejected a cy pres award. it seems like the system is working, not not working. >> well, the system will cease to work at the ninth circuit standard is affirmed by this court. and, otherwise, class counsel will direct settlements to the ninth circuit. there are two all-pres settlements with google alone, just waiting for resolution of this decision. in the night circuit's standard
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is even $100 billion settlements. >> how is the ninth circuit's standard different than all of the other standard? i thought the circuit had basically coalesced around the ali three factor test. >> the ninth circuit rejected that. it's at all that is needed is that the money is de minimis progress member. that is page eight of the petition appendix. and we see that in our supplemental brief, where we point out that in a case with 1.3 million class members were every class member is identifiable and $3 million to $9 million left over, the court said that is de minimis. it is ok to send that to a local university where the defendant can name a chair after itself. >> so is this appeal all about feasibility alone? >> no. it is about settlement fairness under rule 23e. i would like to reserve the rest
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of my time for rebuttal. >> thank you, counsel. >> general wall? >> mr. chief justice, and it may please the court. two points. first, when the district court to result petitioners objectives, approved the settlement agreement, and entered it as a binding agreement that appears at pages 62 to 66 of petition appendix, it was exercising article iii jurisdiction, which made so plaintiffs have to have standing and the courts ordered cy pres relief had to redress plaintiffs' injuries under laidlaw. neither of those are likely to hear. second, the other limitation of feasibility and fee proportionality should not be paper tigers. laura courts need to conduct rigorous numerical analyses of feasibility and determine fees based on actual relief to the class, not as here, based on the inflated percentage or multiples.
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>> i don't understand your argument on fee. i think you either decide the cy pres award provides relief orbit doesn't provide relief. if it doesn't provide relief, you don't get a fee at all. >> i think it a look at what relief it provides to the class. if the court agrees with us at the lower courts are not being very rigorous with respect to addressability of feasibility and it types the inquiry, i still think it is possible to say that tailored cy pres provides some benefit to the class but not benefit that should be treated dollar for dollar like money in the pocket of the class members. i'd certainly agree that not much of a discount would be warranted if you've got really tailored cy pres.
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the problem here is of the six proposals, only one even argue the world privacy forms proposal come even arguably just with referral headers and the subject of this suit. the aarp's proposal deals with online fraud. this was not even a fraud case. those were dismissed. and the other four just deal with the internet privacy in general. if cy pres is going to be so far divorced from despite what i think are serious redressability concerns from the claimed injuries, that i don't think we can trade in your near dollar for dollar. i think the discount has to be more substantial. >> is her any reason why we should not decide the standing question? it is a question of law. at the 12 b6 stage it is the plaintiff's obligation to allege standing. if it wasn't alleged properly, sufficiently, then there isn't any standing. why is a remand necessary? >> i think the court could decided, justice alito. i think it could decided or remand. we would urge the court to do either of those, rather than dave.
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>> but why remand? >> it isn't clear -- the common-law court that everyone keeps talking to do -- requires public facts about you. here we know someone searched mr. italiano's name. here we know that somebody searched his name, but from the fact that some researches my name, doesn't mean it was made. it seems pretty speculative i think for spokeo purposes. there is in a record on that, though i don't know the court needs one. and beyond that, even if you could identify that these people were the ones doing the searches, if they're searching information that's already public and they're not pointing to any other additional harm, is that harm under spokeo, i think that the latter part is a legally great that i agree -- >> do you think every time we get a case where there has been
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a dismissal at the pleading stage and a question of standing arises the we should remand to the lower court to see whether the plaintiff might be able to come up with some additional get a case where there has been allegations, or should we decide whether the plaintiff has sufficiently alleged standing as the plaintiff must sufficiently allege all of the elements of whatever claim is being pressed? >> justice alito, i think if the court thinks that on the basis of these allegations it has enough to decide the standing question, i think it could do that here. >> we know this come on that very point -- we have in the complaint -- there was one search that was his name, spokeo, and then "the name of his soon to be ex-wife." was the search, the words -- it couldn't have been. there must have been a different actual search. do we know what it was and were the words in the search "soon-to-be ex-wife"? those words would seem private. probably.
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and maybe they weren't there. maybe all their was his name and his wife's them, which i don't think is private. so do we know? >> so in fairness -- i don't think what they're pointing to the harm is the disclosure of the information itself. i think the harm they are claiming is the disclosure that they performed that search. i am known into a search for my name, plus the following terms. and for the reasons that i gave to -- >> isn't that an injury, disclosure of what you searched? i don't think anyone would want the disclosure of everything they searched for disclosed to other people. that seems a harm. it may or may not be a cause of action, but it is a harm. >> justice kavanagh, i'm not so sure. at the common law, he was at least uncertain as of the second restatement -- >> but it doesn't have to be exactly at common-law, according to the language in spokeo. >> no, it is just an analog.
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>> just as a common sense matter. just go to plain common sense. what you search for, that is disclosed to other people. >> yes, on a particular rest basis you could conduct searches the disclosure of which would embarrass or harming. it but if all he searched was his own name, is that a sufficient harm for spokeo purposes. >> if it is not disclosed to another person? >> i am not sure that it is a sufficient harm under spokeo. the result think you don't even get there is this related vacation theory itself is so speculative i don't think it is at all clear the internet site to click through to could be used -- >> isn't that a merits question? >> i don't think so. if the harm they're pointing to could not occur because nobody could reverse engineer, they don't have a sufficient injury. >> and what is the record with respect to the question, about
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whether anybody can identify the person who did the search? >> as far as we can tell, there is to record because the district court never re-examine this post-spokeo and no one raised it, either because there are bound not to attack a settlement agreement or because they wanted a ruling on the merits of cy pres. >> general wall, what is the government's position on justice thomas there in spokeo that standing can be proven by violation of a legal right granted by congress, even if it wouldn't otherwise be recognized that come along? >> we have not taken a position on that, justice gorsuch. >> what you recommend accord do about that? the government for nothing to offer us. >> we would be happy to supplement only brief the standing -- supplemental he briefed the standing question. i think if the court once -- >> isn't that a reason why we should not decided in the first instance? >> for the reasons i gave earlier, i think the court could on this record or remand. as long as the court does not dig. i do think if the court reaches the merits, the government's primary submission is the lower courts have not been very
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rigorous. >> to pick up on justice sotomayor's question earlier, why shouldn't that be a question for the rules committee and congress to address in the first instance? >> guidance from congress would be helpful, but in its absence, i think we have to say what the fair, reasonable, and adequate standard means under rule 23. the rules committee essentially punted to the courts by saying the courts are actively looking at this issue, we're not going to address it. they did them in the real embarrass ways that i think support our approach saying you should consider fees, delay what the claims rate is, the course to be looking at the claims rate.
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a number of the things they've done in the amended rule i think are designed to tighten up the inquiry. but they did not directly tackle the question. they defer to the courts. what we would say is, for a number of the things they've essentially -- the reasons that petitioners give, these are three important limitations that the court should articulate and should have real teeth. they are saying they don't have real teeth because there was not a reasonable analysis of feasibility or redressability. in $950,000 in fees were bumped up to $2.1 million through a 2.2 multiplayer that is essentially plucked out of the air. all three of those seem like serious problems. i think it is important that if the court reached the merits that it tighten them up so we don't have cy pres that is completely untethered from the injury of the class in the relief that is actually being multiplayer that is essentially plucked out of the air. all three of those seem like delivered.
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>> thank you, counsel. mr. pincus? >> thank you, mr. chief justice. >> thank you, counsel. may please the court. to the effect petitioners are offering for a cy pres rule where the monetary agreements only go to third parties, nothing in the rules enabling act or rule 23 authorizes a flat prohibition. as justice sotomayor indicated and judge -- professor rubenstein's amicus brief submits, these are very rare settlements. it rule 23e's requirement does impose significant string -- constraints, which is what the settlements are rare. maybe i will just say -- >> is there -- >> something about standing because summoning probably going to ask about it. >> go ahead. >> we agree with the government
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there's a serious question about whether the action was ever properly in federal court and at the standing issue has been addressed before the court could determine a question presented. i think the question is complicated under spokeo. mr. italiano was the only plaintiff's claims were addressed by the district court. in order for his -- for him to have a sufficient allegation of injury, we think it depends on this re-dientification theory, as general wall indicated. a website operator has to get more than one search because the whole idea is you put the searches together to figure out who is taking them. if no allegation here that mr. italiano researchers -- >> what does google admit it disclosed to other parties? >> i don't know. all of us have probably done searches. if i do a search and search for men's shoes come a i will immediately get all sorts of advertisements from its shoes or whatever product i'm searching
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for. so what do you admit you disclosed? >> the issue here is there were lots of cookies and other things that generate -- the serving of ads to your particular computer. the question here is the referrer header that the search terms, when you conduct the search you get a list of websites. when you click on one of those for. sites, the site gets research. that is the issue here. >> and that isn't a harm to disclose that? >> i don't think the mayor disclosure of a search without more, your men's shoes search, is not a harm because there's no disclosure that you are making a search. it's a disclosure that some a searched for men's issues. oaks they somewhat justice alito typed in, right, someone searched for men's shoes? searched for men's shoes?
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>> well, yes, but not -- >> will that is kind of revelatory of private information. >> not the justice alito searched for men's shoes. >> i'm not sure how not. the reverse engineering is self evident because he is receiving the men's issues advertising. so somehow something he is doing is identifying his website. and given that i went into a store not long ago, and without giving them anything except my credit card, they came back with my website, it seems -- >> there are lots of ways that information is disclosed that don't have to do with the referrer header.
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>> oh, i see what you mean. >> the placement of cookies in your browser and other ways that you may be served at based on your searches. >> but you think that problem is going to be meaningfully redressed by giving money to aarp? >> i think the question -- [laughter] >> this is only a problem for elderly people? >> no, but aarp is nothing only recipient and elderly people -- john >> well, you're changing the subject. aarp is one of the recipients. >> it is. and i think one of the questions that a district court has to ask is the fit between the recipients and the harm alleged in the complaint and the plaintiff class. here, the plaintiff class was everyone who used google -- basically, everyone on the internet in america. it is a fact that elderly people are less knowledgeable about privacy and their vulnerability on the internet and other people. and having part of the award be designated for that group we think meets that fit test. >> including a group that engages in political activity, having nothing to do with the inability of elderly people to conduct searches? >> this grant had nothing to do with political activity. aarp, like the other recipients, had to summon a proposal on the
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money was specifically for the proposal. -- submit a proposal and the money was specifically for that proposal. >> i'm not quite sure i understand the re-identification theory. i'm not sure i understand it. >> i think this is one of the reasons for reprinting or remained as necessary. what would have to be alleged is of enough refer headers when to a single website operator and that website operator could combine them and say, i can now figure out that this person who made a search and had the search
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terms to that person. another mertz, the new revelation of facts a common-law in the 1960's was not enough, let alone -- >> that is a merits question. >> i don't think so, your honor. >> we are just talking about harm and you don't have a mini trial on whether the harm is sufficient for standing, is proved. >> i think that standing -- there are two ways that standing can be contested by defendant. one is based on the allegations of the complaint, whether they are sufficient. in the second is whether the allegations of the land are in fact backed up by real facts. with of those are preliminary inquiries of the standing stage.
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in this case, google filed a motion to dismiss mr. italiano's claim. i think the question whether -- the spokeo question whether there is concrete harm has two components. one is the kind of form that is generally recognized. and if it is not, the question is, is it intangible harm that because of its recognition of the common law or because of what congress may have elevated makes it a harm that is actionable. i think under the tort the medications act, there's room question. it is an act that requires the plaintiff be aggrieved and an act that two circuits as that requires proof of actual damages to recover. i think there is a very significant question about whether that act could be -- in that act, congress could have been said to elevate that harm. >> with the following make sense if we get to the merits? professor rubenstein's brief --
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i'm referring to that, interesting. could we say something like this -- where the actual plaintiffs receive something significant, then quite often there is money left over, a little bit, some or sometimes more. and in those circumstances, you apply the ali four step thing and just do it and be sure it's done. but where they get done, under those circumstances, what we then quite often there is money would not say never, what is happening in reality is the lawyers are getting paid and their making sometimes quite a lot of money for really transferring money from the defendant to people who have got nothing to do with it. and under those circumstances, scrutinize very carefully to see that the four standards are met. >> i think there should be careful grew in. >> but i was trying to make up -- >> yes. there's a great difference between most of the cases that
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mr. frank relies on, which are cases where claimants have been identified and there is nonetheless a separate multibillion dollar -- multimillion dollar separate payment. as a very different case because you don't have the question of the cost of identifying the plaintiffs. in this case, is it worth it can only try and identify the claimants because you of a very large class and a very small settlement, there should be a close gurney in the three-part test. one is feasibility. as the amount the class members are likely to receive after administrative costs, the benefit is outweighed by the indirect benefit from the third parties activity? i think that is a to have test. the district court needs discretion because there are two unknowns. what will the administrative costs be of disturbing the money? and, too, how many class members will claim? second, the district court should look at the link between the harm -- the claim injury and the recipients. we don't agree with general wall there is a redressability issue.
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this is a settlement. settlements between individual parties are not limited to things that would be awarded under the statute. for the test to be satisfied, we think the funds have to be used for a purpose that will benefit the class members and address injuries similar to those that are subject to the lawsuit. the third test is no conflict of interest. the lower court here address that test. we don't think the happenstance made given contributions in the past to the organization's should rule them out, but the court should make sure this is in a displacement of money the defendant would otherwise give. that the organization will control the money and decide how it's going to be used. court should make sure this is >> would you agree the district court should never be the one suggesting possible recipients of the funds of the settlement he has to approve? >> i totally agree. i think the settlement is an
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agreement between the parties. the district role is to apply 23 intel the parties because one of these three tests is not met, we would submit the settlement is not approved. then it is up to the parties to come up with different recipients are different process that meets the test. >> why do you assume that simply because someone wants money in the settlement or is entitled to that he's also opposed to what gave rise to the wrong? you may be in an auto accident with someone who is speeding, that doesn't mean you automatically think highway safety is affected and the speed limit should be changed. i just want money because of limit should be changed. i just want money because of what happened to you. >> i think that is what the critical first inquiry is in the real world, the cost of distributing the money going to mean that people get essentially little or nothing were essentially nothing so that this indirect and if it is better? >> isn't always better to at least have a lottery system than that one of the plaintiffs want to be injured arteries gets it
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rather than someone who is not injured? ways and that always more reasonable. >> we agree with the government a lottery system would be strange. a number takes the time to file a claim -- >> this is strange, too. it is a question of what is more strange. >> if i may answer the question, this is partially an answer to the chief justice question. the actual application of a cy pres-like doctrine is the class representative and her lawyers are essentially fiduciaries to the class and they're looking at this and saying doesn't make sense at the end of the day to have this indirect benefit rather than a direct benefit that is essentially going to be $1. >> thank you, counsel. >> mr. lamken? >> this case and deadly
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has interesting policy and empirical questions. but those are the types of questions that the administrative process, judicial conference, advisory committee, congress can investigate an answer. >> where did the cy pres doctrine come from? >> the cy pres doctrine comes out of the notion that someone who gets the reward, so who gets an award can repurpose it to a different thing, to a different purpose if the existing purposes sn't viewed as feasible. boyse the beastie example. private parties regularly will get an award or settlement, but they can go to a third party for their benefit. the question in this case, is there anything in rule 23e that says class representatives where
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it is fair, reasonable, and adequate cannot do what the beastie boys or any other party can. rule 23 does not answer that question by saying never. it provides the standard of fairness or reasonableness, and adequacy. >> the question is, what reasonableness means. >> when the alternative, when you have a possibility of getting millions of dollars of indirect relief, it is better, fair, reasonable, and adequate to get that. when the alternative is likely nothing. that is the fundamental decision that ai made. if it is not possible to get this money out to people without it becoming practically zero or there's a great risk of that happening, then you can take the money and give it to institutions for particular uses that serve the interest of the individual class members. >> and whose opinion do they serve the interest of the individual class members? >> the decision is initially made by the class representatives and the lawyers, and it is subject to judicial review by the court. in this case, rather than -- frankly, this is an issue that is double for the core because the petitioner did not challenge
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the requisite nexus between the recipients and the interests of the class members. but turning to it anyway, in this case, specific puzzles were provided and they are actually quite closely linked to not just the injury that occurred here, that underlies both the cause of action and the actual complaint, but also the specific class. >> but there is the appearance of favoritism and alma maters of counsel. >> your honor, i think in this case, the district court acknowledged that there was up potential of conflict. but he took evidence. he heard from counsel lives in court, including the statement "i got the degree from harvard" and that simply the end of it. here if you do tell proposals which carefully calibrated the money to the specific arms, the impact of search terms and disclosures and third-party data flows. the district court found "no indication" that counsel's
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allegiance to all maters factored into election -- selection. >> don't you think it is a bit fishy that money goes into a charity or 501(c)(3) organization that google had contributed to in the past? >> because where in the high-tech area and we are in emerging area, there are so many organizations that are going to have -- >> i bet there are other organizations active in the area that google had not contributed to in the past. >> and many were included here. but one of the critical things, high-tech area and we are in emerging area, there are so many organizations that are going to have -- while google was involved in identifying potential recipients, counsel for class, the class, not google, vetted -- >> the allegation is that counsel for the class and the defendant are working together because no one is going to anybody else, it's just going to counsel for the class, and that google for its part has part of the deal -- i'm not suggesting that's what is going on -- but
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the allegation, it says part of the deal, they get to give money to their favorite charity. >> and the district court looked at it and understood that google's role in it at selecting potential recipients. the district court heard from counsel and said, look, it is not just an accounting core change. the court responded, i appreciate that. google's own counsel explained to the court that if you look at the detail of these programs of the lack of google's involvement in the development of the program, it rebuts that. if you look at the actual recipients, these are not necessarily flattering recipients for google. there are two that referred google to the ftc, resulting in a $17 million fine. one of them is dedicating money, auditing, from outside the google because fear, google's compliance with privacy policies. >> the appearance problem here, which has happen in many cases, is symptomatic of a broader
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question, which is why is it not always reasonable, more reasonable in a situation, which is a difficult one, to try to get the money to injured parties, either through pro rata distribution or some kind of lottery system. imperfect or strange as that may be, it seems to me potentially less strange or why isn't it less strange than giving it to people who weren't injured, who have affiliations with the council, and to come in many cases, don't need the money? >> in terms of what the standard is, yes, absolutely the priority is to give the individual class members money. and only when it proves infeasible to do that can he go to a cy pres result. in this case, the district court looked and said, the costs to do claims processing, costs due to claims forms, costs to do distribution and said -- >> how about a lottery?
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>> it doesn't help much. first, you have to identify the class members in order to determine who you give your lottery tickets to? so you now have to go out and find the names of 129 million people, or how many you're going to the summit, and ask. yet the process and determine, are these valid request for lottery tickets -- >> but use your analogy, someone >> at least he is someone who paid for the lottery ticket as opposed to giving an award. >> a little strange to use virtually all the money to start up this lottery process for these claims, administer that process, and then explained that we are going to take some people who are injured they're entitled money or not give the money, but we are going to give the money
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to someone else because they won the lottery. the only thing it reduces, does not reduce claims administration costs, does not reduce in terms of vetting the claims, it is just the mail-in costs. >> it reduces the appearance of favoritism and collusion, which is rife in these cases. that has been the allegation. the district here was very concerned about that. >> he was not concerned about the collusion because he specifically found that it did not enter into the decision. the standard everyone agrees is if there is even doubt, substantial doubt about whether the recipient -- that is called against and in favor of trying something different. ali standard, the it had determined that after looking at the evidence and details of a proposal, after
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hearing from counsel, it was not that substantial doubt. we have to not get engaged in that type of process. >> if you step back from what happened in this case and cases like this, how can you say that it makes any sense. the purpose of asking for would benefit a broad class. benefit the public. it is compensation for the class members. and at the end of the day, what happens? the attorneys get money and a lot of it. the class members get no money whatsoever. and money is given to organizations that they may or may not like and that may or may not ever do anything that is of even indirect benefit to them. so how can such a system be
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regarded as a sensible system? fees,st, with respect to that is -- we do not think that is before the court. it is well-established that a court can reduce attorneys fees if it believes that a cy pres is less value than the cash equivalent. this happened, and in this case, the district court heard arguments and said he did not agree that the fees were consistent with the valley of the class benefit. moreover, the request is not disproportionate to the class in a fit. it is a sit -- a situation where district courts can value the cy pres benefit and make a consideration per they can reduce it and they have in the past, and a number of cases. the second part, justice, is that somehow this distribution does not benefit the class. it is not a case reasonably take
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money and give it to charity that happens to be in the space that is similar to or occupied by the underlying injury. there are specific proposals with a close nexus. the injury here is that search terms are given out. i will come back to standing in a moment if i have time. but it is given to third parties without their consent. and the act is clear, it is not illegal to give out that information if there is consent. both respective relief, modifications to google's faq, and these organizations are working towards making sure that the public is properly notified that this is the consequence of entering potentially extremely personal information, what your worries are, your concerns, and to a possible deal. it is not even remotely the case that this is not been a fitting the class. this is targeting the precise type of injury and problem, privacy invasion. with what, for
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me, is a good point, why this is for us and our congress and the committee or that on the other hand, the retort is that the committee thinks it is for us. too, congress does, because reasonable gives common-law like power to the courts to figure things out. how can we rely on congress and the committee of they are thinking the court is going to do it? ask the one thing the court cannot do is give some categorical rule than the rule itself. >> isn't that what courts do all the time with the word "reasonable," and then drying rulessometimes -- drawing sometimes? >> they typically do not substitute a different task such as to say cy pres is there fair, reasonable, and adequate.
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it certainly should be fair, reasonable, and adequate when the alternate is nothing. >> can i ask you to address standing, please? >> yes, ok. neither court below addressed the communication act or the other four causes of action under the danger of spokeo. very few courts have. this is not a situation where the court should be going out on its own and undressing an issue without the benefit of the viewpoints of others, without the benefit of the refinement that occurs when the case comes up through normal courts. a simply do not talk about standing. the court has two options. if the court were clyde to think it might grant again, i think raymond would be the right answer. but this case is so rife with vehicle problems, think the proper answer is to dismiss those as improperly granted. but that is in the court's discretion.
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turning to merits -- >> take an extra minute on standing. >> if the court were to be the first to address this under spokeo, since the framing, the rule has been the disclosure of another's communication without consent is actionable. the court can look to the justice story's opinion, and even a ledger was not permitted to be disclosed without the author's permission. the issue wase, thoroughly briefed by the united states and others, and the court recognized that for privacy harms, often without specific harm, the damage is presumed. this is entitled to get the same judgment. >> the alleged injury here is that a third-party will now that a particular person did the search. it is not simply the nature of the search. correct? >> went associated with you, that is an injury.
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the discussing -- disclosing a letter, even if anonymous, i think that would be actionable common-law, actionable before the framing. even without individual actual harm, the presumed harm because it gave us damages, the wrongdoers profit. to get thetitlement wrongdoer's profit. you have to go deep into history. circumstances, i think the right answer of the court is remand or dismiss. >> thank you. mr. frank, three minutes remaining. >> thank you, mr. chief justice. may i please the court? my friend is alleging that the district court made factual findings that is simply did not
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reach because it believed its hands were tied by the ninth circuit. it did not look at the potential conflicts between google and the recipient because, in lane versus facebook, the ninth circuit approved a settlement where facebook gave to a charity .reated by facebook it did not look at the difficulty of distributing to to because ofbers the brick, the district court found it would be too hard to district -- distribute to over 100 million members. returning to the question that a number of justices raised, one not leave this to congress. under the sherman act, it was introverted, and it had a three decade old precedent already
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that was being asked to reverse. congress had specifically considered the rule over this .hree decades they came to the conclusion about the way to interpret restraint of trade. at no point do my friends indicate that pearson versus wrongs wrong or why it is or what it is not the superior rule here. council responds to incentives.
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and they create incentives for class counsel to argue it is too hard to get the money to class. settling nownts for less than one dollar for class member, less than two dollars per class matter, does distributes tens of millions, even over $100 million to class members, it is now appropriate to take all that money and give it to the favorite charity. if there are no further questions, i ask the court to it >> thankeverse you, council. case is submitted. >> live coverage this evening here on c-span as we get a look at the impact religious voters had on the midterm election. live from georgetown university at 6:30 eastern, watch the discussion streaming live online at or listen live with the free c-span radio app. tonight in primetime, tennessee republican senator lamar
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alexander discusses free speech on college campuses with deputy attorney general rod rosenstein. senator alexander chairs the education committee and talked about whether the government should get involved. >> what the federal government should not do is pass a law trying to solve it. conservatives do not like it when judges try to write laws, and conservatives should not legislators and agencies try to rewrite the constitution. i do not want to see congress or the president or the department of anything defining what a speech code should be your should not be, what you can say or what you should not. i think what should the fine that is the first amendment and 14th amendment and the private right of actions and the courts of the united states, and they should define that. senator alexander also served
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as education secretary during the bush administration. you can watch the entire justice department even on campus free speech tonight at 8:00 eastern here on c-span. ♪ >> this into c-span, "the weekly," podcast. this week, part one of a withart interview presidential historians. they sure historical context for the trump presidency. >> i see him as an andrew johnson like president, someone close or heale to a racial divide in the country. >> here is a real animosity between the press and the president as early as john adams, because he is a person pushing towards the sedition act of 1798. what that does is it actually
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tries to prevent criticism of the government and of the president. >> c-span's the weekly on the free c-span radio app under the podcast tab or wherever you go for podcasts. ♪ announcer: this week on "q&a," democratic congresswoman jacky spear of california. she talks about her memoir, "undaunted: surviving jonestown, summoning courage, and fighting back." brian: jackie speier, your book, "undaunted," your first three words are, "i was dying." why did you decide to start the book that way? rep. speier: because i was. and because it was one of those moments in my life that were


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