To Be Or Not To Be: Standing In Invasion of Privacy Cases


To Be Or Not To Be: Standing In Invasion of Privacy Cases

Standing In Privacy Cases

“It’s merely a flesh wound.”

In the case of Frank v. Gaos, argued before the United States Supreme Court on October 31, 2018, oral argument took an unexpected turn, leading the Justices to direct the parties (and the Solicitor General) to brief the question of whether any named plaintiff had standing, i.e., whether they were in fact injured, in a class action case alleging an invasion of privacy.   Ultimately, the Supreme Court decided not to decide — at least not until the lower courts took a first crack at whether standing existed.  But, signals from the Court suggest that standing may not be so easily established in privacy lawsuits.


The case of Frank v. Gaos arose out of the settlement of a class action lawsuit against Google, alleging that Google violated the privacy rights of web browsers by disclosing their search terms to third party website owners.  Claims were asserted both under the federal Stored Communications Act and state law.

The case made it to the U.S. Supreme Court not on the issue of standing, but on the appropriateness of so-called cy pres settlements in class action cases.  Such settlements share a common feature:  other than the few named plaintiffs, members of the class get nothing.  Instead, the remains of the settlement go not to class members, but to charitable organizations or educational institutions that agree to use such funds in an manner that has a “nexus” with interests of the class.  But, don’t be worried about the plaintiffs’ attorneys.  In the proposed Gaos settlement, those lawyers would harvest their fees off the top, in this case over $2 million dollars out of a total settlement of $8.5 million — for what even the California courts acknowledged were “shaky” claims.

As the Ninth Circuit in Gaos explained, “Cy pres, which takes its name from the Norman French expression cy pres comme possible (or “as near as possible”), is an equitable doctrine that originated in trusts and estates law as a way to effectuate the testator’s intent in making charitable gifts. Nachshin v. AOL, LLC, 663 F.3d 1034, 1038 (9th Cir. 2011). In the class action settlement context, the cy pres doctrine permits a court to distribute unclaimed or non-distributable portions of a class action settlement fund to the “next best” class of beneficiaries for the indirect benefit of the class. Id.”

A number of class members objected, lost before the United States District Court for the Northern District of California, and then appealed to the United States Court of Appeals for the Ninth Circuit.


On appeal, the Ninth Circuit focused on the propriety of the cy pres settlement, noting that such settlements are to be the exception, rather than the rule. “However,” it wrote, “they are appropriate where the settlement fund is “non-distributable” because “the proof of individual claims would be burdensome or distribution of damages costly.” Lane, 696 F.3d at 819 (quoting Nachshin, 663 F.3d at 1038).”  The alternative would have been, the court explained, the distribution of a 4-cent payment to each class member if all 129 million class members submitted claims. (In reality, in the ordinary case, only a very tiny percentage of class members submit claims no matter how much they are worth.)

The total amount of the settlement, the Ninth Circuit concluded, was appropriate given the “shakiness of the plaintiffs’ claims.”  And it rejected the argument that claimed relationships between counsel, the parties, and the cy pres recipients created what amounted to a conflict of interest that precluded approval of the settlement.  That can only happen, the court of appeals concluded, where fraud or collusion are shown.  There was a dissenting opinion, but only on the point of whether the lower court should have pushed for more answers on the claimed conflict with the organizations receiving settlement funds.

That “shaky” claims result in $8.5 million settlements is a matter for another blog post, on another day.  Suffice it to say that, in the opinion of this author, it points to a fundamental flaw in the class action litigation process that leads defendants to surrender vast sums of money for even weak claims.


Review by the U.S. Supreme Court was on the basis of a claim that the class members interests were not sufficiently taken into account in the cy pres settlement approval process.  But, about ten minutes into the argument, see page 15, Justice Kagan shifted gears, raising the question of whether the plaintiffs had suffered sufficient “harm” to give them standing to bring suit.  Could standing be based on a mere statutory violation, or did the plaintiffs need to allege (and ultimately show) “a particularized or a concrete injury?” Justice Kagan asked.  Without standing, Chief Justice Roberts added, “”the whole class is thrown out, right?” “That would be correct,” counsel for petitioner conceded.

Justice Gorsuch picked it up from there: “Is there any evidence that [the plaintiff’s] personal information, for example, wasn’t already available through the white pages and otherwise published so that there is no injury in fact?”  Petitioner’s counsel responded that the mere allegation of standing was sufficient in the context of upholding a class settlement, but the Justices pushed back.  Justice Breyer pointed out that nothing that was allegedly disclosed seemed all that private:

JUSTICE BREYER: So what is the private — I mean, what I have here, my law clerk looked it up, is that the search that Mr. Italiano engaged in was his name, that’s 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 name and the name of his then soon-to-be ex-wife and the words “forensic accounting.” Now how, if that — if those are all the things that he looked up, how are the -­ what concrete injury was there because somebody might discover through Google that he made those searches? I mean, I — I don’t quite see how this is some kind of secret or private or -­ information. And I don’t see alleged anywhere how those things were hurt. So I had a hard time distinguishing this from Spokeo.


After additional briefing, the Court released its per curiam decision on March 20, 2019, deciding that “[b]ecause there remain substantial questions about whether any of the named plaintiffs has standing to sue in light of our decision in Spokeo, Inc. v. Robins, 578 U.S. ___ (2016), we vacate the judgment of the Ninth Circuit and remand for further proceedings.”  The Court offered no insights into how that standing question might be resolved, holding that it was up to U.S. District Court or the Ninth Circuit to take the first crack at deciding the issue.  “We ‘are a court of review, not of first view,'” it explained.

But, even without a decision on the merits, we know what concerned the Court:  the information in question didn’t seem to be secret or private in any meaningful sense, and thus didn’t seem to be the stuff of “concrete injury.”  It signals that lawyers on both sides should be focussed like laser beams not only on the “how” in privacy cases, but the “what.”  Information like names and addresses, and the products or services a person searches for or looks at on the web, may well not be enough to show injury.  Courts are increasingly sensitive to this issue, as we’ve just recently learned.

The reality, which courts are grappling with, is that communications over the web aren’t particularly private, are far more akin to written communications than oral ones, and (absent some promise made by the recipient to the contrary) are the kinds of information that are naturally provided by consumers without any expectation of privacy.  No one seriously argues, for example, that a store cannot keep track of customers purchases and use that information to make marketing decisions, or to assemble customized lists of customers for its own use — or to share with other companies who might be interest.  Unless, of course, it makes a promise not to do so.

Of course, this kind of common sense understanding flies in the face of state privacy law initiatives, like the CCPA, which cast such a wide net that even mundane ends up getting treated like state secrets.  In a normal world, one might expect Congress to step in like a grownup to create a reasonable, national law to replace overreaching by states like California — just as it did with CAN-SPAM.  But, this isn’t a normal world where things get done in Washington.

It’s hard to predict what will ultimately happen, but maybe these “shaky claims” won’t produce a pirate’s hoard for plaintiffs’ counsel after all.  Of course, as is always the risk, a dismissal on standing might drive the case into California state court — but, fortunately, the test for standing is identical.  Of course, in state court, anything can happen.

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