WASHINGTON Nov 4 The U.S. Supreme Court on
Monday let stand Facebook Inc's $9.5 million class action
settlement over allegations the social networking company's
defunct "Beacon" service violated its members' privacy rights.
Although the court declined to hear the case, Chief Justice
John Roberts issued a statement raising concerns about the
particular type of settlement in the case and said the Supreme
Court might take up another case in the future to clarify the
The court's decision not to hear the case means the
settlement is final.
Four users who were part of the class action lawsuit
objected to the settlement, which set up a not-for-profit group
that addresses online privacy rights. They claimed it gave
nothing of value to the approximately 3.5 million plaintiffs.
One of them, Megan Marek, sought Supreme Court review after
the 9th U.S. Circuit Court of Appeals in San Francisco ruled in
September 2012 that the settlement could go ahead.
One member of the three-judge panel dissented, saying the
settlement unfairly benefited Facebook and plaintiff attorneys.
In 2007 Facebook launched Beacon, which would notify a
user's friends of transactions the user made on such third-party
websites as Overstock.com Inc, a discount retailer.
Facebook did not ask users to agree to participate in the
program, prompting complaints about how private data was being
transmitted without their permission. Facebook eventually
discontinued the service.
A group of 19 plaintiffs filed a proposed class action in
federal court against Facebook and other businesses that
participated in Beacon. Facebook soon agreed to settle the case
for $9.5 million.
Roughly $3 million was set aside for attorney fees, with the
rest going to establish the charitable group focused on online
privacy rights. The board members of the group would be selected
by Facebook and the lawyers representing the users.
In his statement on Monday, Roberts noted that settlements
similar to those in the Facebook case, in which the majority of
plaintiffs get no damages, with the money put to another use,
have become increasingly common in the class action context.
"In a suitable case, this court may need to clarify the
limits on the use of such remedies," he wrote.
The case is Marek v. Lane, U.S. Supreme Court, No. 13-136.