Judge steps away from Facebook privacy lawsuit

Facebook logos on a computer screen are seen in this photo illustration taken in Lavigny May 16, 2012.

SAN FRANCISCO (Reuters) - A judge recused herself from overseeing a privacy lawsuit against Facebook over the social networking service's "Sponsored Stories" feature, one day before she was set to hold a hearing on a proposed settlement.

District Judge Lucy Koh in San Jose, California, federal court did not provide a reason for the recusal in a brief order on Wednesday.

Five Facebook members filed a lawsuit seeking class-action status against the social networking site, saying its "Sponsored Stories" feature violated California law by publicizing users' "likes" of certain advertisers without paying them or giving them a way to opt out. The case involved over 100 million potential class members.

As part of a proposed settlement, Facebook agreed to allow users more control over how their personal information is used. The value to Facebook members resulting from the changes is about $103 million, in the opinion of one economist hired by the plaintiffs.

However, the amount Facebook will actually pay to settle the case is just over $20 million, according to court documents filed last month.

Any settlement must be approved by a judge. In the order on Wednesday, Koh vacated all pending dates for motions in the case, and asked that it be reassigned to another judge.

Koh had overseen the lawsuit since it landed in federal court last year. In an order last December, Koh rejected Facebook's attempts to dismiss the case, saying plaintiffs had shown economic injury could occur through Facebook's use of their names, photographs and likenesses.

The case is Angel Fraley et al., individually and on behalf of all others similarly situated vs. Facebook Inc, U.S. District Court, Northern District of California, 11-cv-1726.

(Reporting By Dan Levine; Editing by Gary Hill and Tim Dobbyn)