IP Law Daily Court approves settlement of publicity rights dispute between LinkedIn and users
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Friday, February 19, 2016

Court approves settlement of publicity rights dispute between LinkedIn and users

By Jody Coultas, J.D.

The federal district court in San Jose has approved a class action settlement agreement between social network site LinkedIn Corp. and former LinkedIn users related to the allegedly unauthorized collection and use of email addresses from the contact lists associated with its users’ accounts (Perkins v. LinkedIn Corp., February 16, 2016, Koh, L.). The court also awarded $3.25 million in attorney fees and $1,500 incentive awards to each of nine class representatives.

LinkedIn is a social networking website aimed toward professionals and has more than 200 million users. The LinkedIn users alleged that LinkedIn harvested email addresses from contact lists of email accounts associated with the plaintiffs’ LinkedIn accounts and by sending repeated invitations to join LinkedIn to the harvested email addresses. The plaintiffs also alleged that the emails were valuable to LinkedIn to attract new users and expanded the market the LinkedIn could advertise its premium services.

In June 2014, the court held that the users alleged sufficient facts to establish a violation of California’s common law right of publicity. However, they failed to establish claims under the federal Wiretap Act and Stored Communications Act (SCA) and under California’s Unfair Competition Law and Comprehensive Computer Data Access and Fraud Act. In November 2014, the court ruled that the users failed to state California statutory right of publicity law claims under California Civil Code Section 3344 against LinkedIn for sending emails to those professionals’ contacts using the professionals’ names and likenesses to personally endorse LinkedIn’s services, and granted LinkedIn’s motion to dismiss on the grounds of Communications Decency Act immunity, the First Amendment, and incidental use.

The parties submitted a settlement agreement for final approval. In deciding whether to approve a settlement, courts consider “the strength of plaintiffs’ case; the risk, expense, complexity, and likely duration of further litigation; the risk of maintaining class action status throughout the trial; the amount offered in settlement; the extent of discovery completed, and the stage of the proceedings; the experience and views of counsel; the presence of a governmental participant; and the reaction of the class members to the proposed settlement.”

The court found that the settlement is fair, adequate, and reasonable. The settlement reflected the strength of Plaintiffs’ case as well as the Defendant’s position, and was reached after arm’s length negotiations by capable counsel, aided by two experienced mediators, and was not a product of fraud, overreaching, or collusion among the parties. The risks, expense, complexity, and likely duration of further litigation also supported final approval. The extent of discovery completed and the stage of proceedings supported approval, as did the views of the users’ counsel.

As a result of the settlement, LinkedIn revised the disclosures relating to the Add Connections service challenged in the suit. The settlement also provided $13 million to a class of approximately 20.8 million. The size of the fund provided more recovery to the class than other settlements that have been approved in privacy cases in this district, even when factoring in the carve-outs for attorney fees and service awards.

Objections. None of the objections to the settlement and the settlement relief warranted rejection of the settlement, according to the court. Nine individuals submitted valid objections, and an additional 77 individuals submitted objections that failed to comply with the procedural requirements. The class members failed to adequately take into account the risks and delays involved in proceeding to class certification, summary judgment, and/or trial, and ignored that the settlement provided a timely, certain, and meaningful cash recovery.

Notice. The court concluded that the Notice Plan included in the settlement agreement was fully implemented in compliance with a court’s order. Notice was sent to class members by direct email, and provided a clear description of who qualified as a class member and the class members’ rights and options under the settlement. The Notice also explained the conduct at issue in the litigation, how to receive money, how to opt-out, how to object, how to obtain copies of relevant papers filed in the case, and how to contact class counsel and the Settlement Administrator.

Plan of distribution. The Plan of Distribution submitted by the parties as part of the settlement agreement was fair, reasonable, and adequate, according to the court. Each class member will receive a pro rata payment from the monetary relief available for such payments. Each Authorized Claimant will receive approximately $20. Such pro rata distributions are “cost-effective, simple, and fundamentally fair.”

The court found that the request for $3.25 million in attorney fees and request for class representative awards were reasonable.

The case is No. 13-CV-04303-LHK.

Attorneys: Larry C. Russ (Russ August & Kabat) for Paul Perkins. Jerome Cary Roth (Munger Tolles & Olson LLP) for LinkedIn Corp.

Companies: LinkedIn Corp.

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