The U.S. Supreme Court on Monday said it will review Google Inc.'s $8.5 million settlement of a class action in which $5.3 million of the funds went to third parties and none to members of the class.

The justices will hear arguments next fall in the case Frank v. Gaos, a so-called “cy pres-only” settlement in which Google settled claims that the company illegally shared the search queries of its users. The U.S. Court of Appeals for the Ninth Circuit in August affirmed the district court's approval of the settlement and the trial judge's finding that the settlement fund was not distributable to a class of an estimated 129 million Google users.

The Ninth Circuit panel said distributing the settlement money would result in each class member receiving about 4 cents, “a de minimus amount if ever there was one.”

Ted Frank, director of litigation and the Center for Class Action Fairness at the Competitive Enterprise Institute, and Melissa Ann Holyoak were objectors to the settlement in the district court and in the Ninth Circuit.

Frank, represented by Baker & Hostetler partner Andrew Grossman, appealed the appellate court decision to the Supreme Court. In the petition, Grossman noted that Chief Justice John Roberts Jr., writing in a 2013 case, said cy pres relief raised “fundamental concerns.” The justices had passed up recent opportunities to take a cy pres case.

Frank, commenting in a statement on the grant of review, said: “We are hopeful that the Supreme Court's review will result in a standard forbidding attorneys from misusing class action settlements to selfishly put themselves and third parties ahead of their clients.​”

Google, represented by Mayer Brown partner Donald Falk, had opposed review of the cy pres settlement.

Falk argued that all of the circuit courts agreed with the Ninth that “a cy pres-only settlement is appropriate in the rare circumstance where direct distribution to class members is infeasible, and all insist on a close nexus between the cy pres remedy and the interests of settling class members.”

Kassra Nassiri of San Francisco's Nassiri & Jung represents three named plaintiffs in the class action. They also opposed high court review.

The Google settlement directs the funds to be distributed proportionally to six recipients that are devoted to web privacy: Carnegie-Mellon University; World Privacy Forum; Chicago Kent College of Law Center for Information, Society, and Policy; Stanford Law School Center for Internet and Society; Berkman Center for Internet & Society at Harvard University; and AARP Foundation.

 

The petition in Frank v. Gaos is posted below:

 

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