DOJ Win in Google Case Could Limit Consumers’ Right to Sue


  • Justice Department wants top court to use Google case to restrict plaintiffs’ ability to sue in court
  • Kavanaugh could be more reliable conservative vote than Kennedy on type of injury needed

The Justice Department wants the U.S. Supreme Court to address whether Googleusers suffered enough injury to bring privacy claims that resulted in an $8.5 million class settlement.

That’s not the issue the top court agreed to hear when it accepted Frank v. Gaos for review in April. The petition for review asked whether the settlement was fair, given that all the money goes to plaintiffs’ attorneys and charities that work on privacy-related issues.

But if the justices do take up the injury question, big business could get the victory it sought before Justice Antonin Scalia died in 2016.

Justice Anthony M. Kennedy, whose last day on the court was July 31, usually voted with the conservative justices on business issues. But he wasn’t a consistently conservative vote on Article III standing, Professor Adam Zimmerman of Loyola Law School in Los Angeles said.

Brett Kavanaugh, the nominee to replace Kennedy, has reliably taken a much narrower view of the issue. Access to the courts for plaintiffs in privacy class actions could be restricted if the court revisits the question that it largely punted in Spokeo Inc. v. Robins.

“In some ways, this question is more important than any one single position Kavanaugh has taken on workers rights, abortion or net neutrality,” Zimmerman told Bloomberg Law.

“Whether or not one has standing to challenge defendants involves the one of the most fundamental questions for our courts, ‘the right to have rights,’” he said.

No Money for Class Members

Standing wasn’t what brought the Google case to the Supreme Court. Frequent class settlement objector Ted Frank challenged the settlement here because none of the money goes directly to class members. Instead, class counsel gets $3.2 million and $5.3 million goes to consumer privacy groups as cy pres.

Under cy pres, funds are distributed in a way that indirectly benefits class members because it isn’t feasible to compensate them directly. That’s what Frank wants the court to look at, especially when cy pres applies to the entire settlement fund, not just a remainder that’s too small to distribute efficiently.

The DOJ doesn’t want the court to get that far. There is “considerable doubt whether the court has Article III jurisdiction” to address the cy pres question, the federal government argued in a July 16 amicus brief.

The suit challenges Google’s practice of disclosing users’ internet search terms to third-party websites. Sharing information about what terms the users searched for violates the users’ privacy rights and the Stored Communications Act, the users alleged.

The lower court held that a a Stored Communications Act violation by itself would be sufficient to establish Article III standing.

But the U.S. Supreme Court subsequently rejected the theory that a bare statutory violation alone creates enough of an injury to sue in Spokeo Inc. v. Robins. That ruling came when the court was equally split between conservatives and liberals after Scalia’s death, and the lower courts have struggled with how to apply its injury requirements since it came out in May 2016.

“Plaintiffs do not appear to identify any particular injury that actually resulted from Google’s use of referrer headers,” the DOJ argues. It wants the court to remand the case for the lower court to address the standing question.

The DOJ’s aggressive position on standing surprises plaintiffs’ attorney Jason L. Lichtman.

“Google’s alleged behavior in selling user data without permission is egregious,” Lichtman, partner at Lieff Cabraser Heimann & Bernstein LLP in New York, told Bloomberg Law.

The “case involves an alleged injury that is similar to the type of injury recognized in intellectual property litigation,” said Lichtman who has litigated many consumer, privacy, and class cases but isn’t involved in the case before the top court.

Kennedy to Kavanaugh

If Kavanaugh is confirmed, the Google case could give the justices the first chance to reconsider the standing issue, Professor Zimmerman said.

That could be bad news for plaintiffs, he said.

Kennedy broke with them in the landmark 1992 standing case, Lujan v. Defenders of Wildlife, which held that Congress can’t create standing where the plaintiff can’t show injury-in-fact, a causal connection, and redressability.

He and Justice David H. Souter wrote an oft-cited concurrence to carve out a role for Congress to identify injuries that satisfy standing.

More recently Kennedy vacillated or refused to join the conservative wing on standing in several class cases, Zimmerman said.

He pointed to Campbell-Ewald Co. v. Gomez, where the court held defendants can’t defeat class actions by offering to pay off lead plaintiffs; Spokeo, where the court said statutory violations may constitute sufficient injury-in-fact in some instances; andMicrosoft v. Baker, where Kennedy joined the majority holding that plaintiffs can’t voluntarily dismiss their cases to get another shot at class certification.

Zimmerman pointed to the last decision as the most significant because Kennedy didn’t join the conservative concurrence that argued the plaintiffs didn’t have standing. “Baker provides the best insight into where a Kennedy-less Supreme Court is going,” he said.

Since the 1980s, the top court has held that plaintiffs whose injuries have expired could continue representing a class, he said. But the Baker concurrence, without Kennedy, seems to have undermined that line of cases.

Kavanaugh, meanwhile, has said Article III should be read narrowly to avoid intruding on the other branches of government, Zimmerman said.

“I think he’ll be a much more reliable conservative vote for dramatically limiting when plaintiffs in class actions have standing to sue,” Zimmerman said. And the Google suit, “where so much of the settlement will go to a third party, provides the perfect atmospherics for narrowing standing doctrine.”

But defense attorney Steve Rummage told Bloomberg Law it’s hard to draw the conclusion from Baker and Spokeo that Kennedy wasn’t conservative on standing. Both were decided by eight-justice courts, he noted.

Without Scalia on the court, the conservatives had to modify their approach in Spokeo to get an extra vote, he said.

“That means Justice Kennedy would have been in the majority with the conservatives had Scalia lived through issuance of the opinion,” said Rummage, a partner at Davis Wright Tremaine LLP in Seattle.

He also doesn’t think Kennedy’s vote in Baker “suggests he was soft on standing,” just that he didn’t approve of the plaintiffs’ procedural gamesmanship. Rummage represented Microsoft Corp. in that case.

Will Court Take the Bait?

But it’s far from clear the court will take up the standing argument the DOJ has dangled in front of it in the Gaos case.

“It seems like the court has been angling to consider cy pres settlements for a while, starting at least from” Chief Justice John G. Roberts Jr.’s “comments in the Facebook case in 2013, so I think the justices (or at least five of them) will be looking for a way to decide the issue if they can,” Rummage said.

Though the Justice Department wants the issue addressed, the parties to the case themselves haven’t raised standing, so the court has a way to get around the question if it wants to reach the merits, Rummage said.

On the other hand, courts are always required to make sure they have jurisdiction to hear a case. The justices could take that route and address standing whether or not the parties themselves want it considered, Zimmerman said.

If Not Now, Soon

Even if the top court doesn’t take on the injury question in the Google case, it’s only a matter of time before it does.

“Regardless of whether or not the court decides the standing question in Gaos, it’s sure to come up again before a Kavanaugh court, as both defendants and now the DOJ, continue to press the question of standing,” Zimmerman said.

There are enough “no-injury” class actions—where plaintiffs’ suffer no discernible, concrete injury—that the court could find another vehicle if it’s looking for one, Rummage said.

“I don’t read the DOJ brief as inviting a new look at Spokeo—even though that may be a long-term goal,” he said.

The case is Frank v. Gaos, U.S., No. 17-961, amicus brief filed 7/16/18.

To contact the reporter on this story: Perry Cooper in Washington at pcooper@bloomberglaw.com

To contact the editor responsible for this story: Steven Patrick at spatrick@bloomberglaw.com