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Fraley v. Facebook Settlment 2

Fraley v. Facebook Settlment 2

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Published by: jeff_roberts881 on Oct 09, 2012
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02/02/2013

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 1 of 28
AMENDED SETTLEMENT AGREEMENT AND RELEASE
T
HIS
A
MENDED
S
ETTLEMENT
A
GREEMENT AND
ELEASE
(“
 Settlement Agreement 
or 
 Settlement 
” or “
 Agreement 
” or “
 Revised Agreement 
”) is entered into between plaintiffs SusanMainzer, James H. Duval, and W.T., a minor, by and through Russell Tait as Guardian ad Litem(“
 Plaintiffs
”), individually and in their representative capacity as plaintiffs on behalf of the Class(including the Minor Subclass), and defendant Facebook, Inc. (“
Facebook 
” or “
 Defendant 
”)(Plaintiffs and Facebook collectively, “
 Parties
,” or singularly, “
 Party
”).
ECITALS
 A.
 
On or about March 11, 2011, plaintiffs Angel Fraley, Paul Wang, and Susan Mainzer commenced a lawsuit (“
 Action
”) by filing an unverified Complaint in the Superior Court of the Stateof California, County of Santa Clara entitled
 Angel Fraley, Paul Wang, and Susan Mainzer,individually and on behalf of all others similarly situated v. Facebook, Inc., a corporation, and DOES 1-100.
The case was assigned the number 11-cv-196193. The Complaint sought relief on behalf of a putative class and asserted claims under California Civil Code section 3344 and California Businessand Professions Code section 17200 (California’s Unfair Competition Law (“
UCL
”)) and for unjustenrichment. The Complaint generally asserted that Facebook used the plaintiffs’ names, photographs,likenesses, or identities (or some combination thereof) to advertise or sell products or services through“Sponsored Stories” without the plaintiffs’ permission.
B.
 
On March 18, 2011, plaintiffs Angel Fraley, Paul Wang, Susan Mainzer, and newly-added plaintiffs James H. Duval, a minor by and through James Duval, as Guardian ad Litem, andW.T., a minor, by and through Russell Tait, as Guardian ad Litem, filed an Amended Complaint. TheAmended Complaint, like the original Complaint, sought relief on behalf of a putative class related toSponsored Stories and asserted claims under California Civil Code section 3344 and California’s UCLand for unjust enrichment.
C.
 
On April 8, 2011, Facebook removed the Action from the Superior Court of the State of California, County of Santa Clara to the United States District Court for the Northern District of California (“
Court 
”). Following removal, the Action was assigned case number 11-cv-01726.
D.
 
On May 18, 2011, Facebook moved to dismiss the Amended Complaint and all of itsclaims pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of Article III standing, andFederal Rule of Civil Procedure 12(b)(6), for failure to state a claim.
E.
 
On June 6, 2011, Plaintiffs responded to Facebook’s motion to dismiss by filing aSecond Amended Complaint. The Second Amended Complaint, like the prior complaints, soughtrelief on behalf of a putative class related to Sponsored Stories and asserted claims under CaliforniaCivil Code section 3344 and California’s UCL and for unjust enrichment.
F.
 
On July 1, 2011, Facebook moved to dismiss the Second Amended Complaint and allof its claims pursuant to Federal Rule of Civil Procedure 12(b)(1), for lack of Article III standing, andFederal Rule of Civil Procedure 12(b)(6), for failure to state a claim.
G.
 
On December 16, 2011, the Court granted Facebook’s motion to dismiss with respect tothe unjust enrichment claim but denied the motion with respect to the remaining two claims.
Case3:11-cv-01726-RS Document235-1 Filed10/05/12 Page1 of 28
 
 2 of 28
H.
 
On January 9, 2012, Facebook filed its Answer to the Second Amended Complaint.The Answer denies the Second Amended Complaint’s allegations of wrongdoing and raises severalaffirmative defenses.
I.
 
On February 14, 2012, Plaintiffs filed a motion to dismiss the claims of Angel Fraleyand Paul Wang without prejudice and to withdraw Angel Fraley and Paul Wang as classrepresentatives. On March 13, 2012, the Court entered an order dismissing Angel Fraley and PaulWang’s claims without prejudice and granting their request to withdraw as class representatives.
J.
 
On March 1, 2012, the Parties attended a full-day mediation before the HonorableEdward A. Infante (ret.) of JAMS. The Parties also submitted briefs and supporting papers to themediator. Although a settlement was not reached at that time, with the assistance of the mediator, theParties continued their arms-length settlement discussions after March 1, 2012.
K.
 
On March 29, 2012, Plaintiffs filed a motion for class certification (along withsupporting papers) pursuant to Federal Rule of Civil Procedure 23(b)(3), or in the alternative, FederalRule of Civil Procedure 23(b)(2) or (c)(4). On April 19, 2012, Facebook filed an opposition (alongwith supporting papers) to Plaintiffs’ motion for class certification. On May 3, 2012, Plaintiffs filed areply (along with supporting papers) in support of their motion for class certification.
L.
 
The Parties have engaged in extensive formal discovery for almost a full year,including depositions of fact witnesses and expert witnesses, requests for production of documents andwritten responses thereto, requests for admission and written responses thereto, interrogatories andwritten responses thereto, and production of documents and electronically stored information.
M.
 
Based on the Parties’ investigations, Plaintiffs believe the Action has merit, whileFacebook believes the Action has no merit. The Parties have also each looked at the uncertainties of trial and the benefits to be obtained under the proposed Settlement, and have considered the costs,risks, and delays associated with the continued prosecution and defense of this complex and time-consuming litigation and the likely appeals of any rulings in favor of either Plaintiffs or Facebook.
N.
 
Accordingly, it is now the intention of the Parties and the objective of this SettlementAgreement to avoid the costs, risks, and delays of continued litigation, including but not limited to trialand likely appellate proceedings, and settle and dispose of, fully and completely and forever, any andall claims and causes of action asserted or that could have been asserted in the Action.
O.
 
The Parties previously entered a Settlement Agreement and Release with an executiondate of June 14, 2012. Plaintiffs filed a motion for preliminary approval of that settlement on June 14,2012 (Dkt. No. 181), and Facebook filed a brief in support of it two weeks later (Dkt. No. 188). OnAugust 2, 2012, the Court held a hearing on Plaintiffs’ preliminary approval motion. In an order datedAugust 17, 2012 (Dkt. No. 224) (“Order”), the Court denied the motion without prejudice, stating thatthe Parties “may elect to negotiate for modifications to their agreement” or “may present a renewedmotion for preliminary approval of the existing agreement, with additional evidentiary and/or legalsupport directed at ameliorating the listed concerns.” (Order at 2.) The Order further explained that,“[a]s discussed at the hearing, plaintiffs generally appear to have satisfied the prerequisites for  preliminary approval of the settlement, except with respect to the issues discussed [in the Order].” (
 Id.
 at 8.)
Case3:11-cv-01726-RS Document235-1 Filed10/05/12 Page2 of 28
 
 3 of 28
P.
 
Subsequent to this Court’s Order, the Parties made several substantial modifications totheir agreement, and they now enter into this Amended Settlement Agreement and Release.
A
GREEMENT
 1.
 
D
EFINITIONS
.
 
The following section defines terms, including terms that are not definedabove. Some definitions use terms that are defined later in this section:
1.1
 
The terms “
 Authorized Claimant 
” or “
 Authorized Claimants
” mean any ClassMember (including Minor Class Member) who submits a valid and timely Claim Form consistent withSection 4.1 below and for whom Facebook’s records reflect that the Class Member appeared in aSponsored Story on or before the date of entry of the Preliminary Approval Order.
1.2
 
The terms “
Claim Form
” or “
Claim Forms
” mean the form Class Members(including Minor Subclass Members) must timely submit to receive payment under this SettlementAgreement. The Claim Form must be substantially similar to the form attached as Exhibit 5.
1.3
 
The term “
Claimant 
” means any Class Member (including Minor SubclassMember) who submits a Claim Form under this Settlement Agreement.
1.4
 
The terms “
Class Counsel 
” or “
 Plaintiffs’ Counsel 
” mean the Arns Law Firmthrough Robert S. Arns and Jonathan Jaffe Law through Jonathan Jaffe.
1.5
 
The term “
Class Counsel’s Fees and Costs
” means the reimbursement of attorneys’ fees, costs, and expenses incurred by Class Counsel, if any, that is awarded by the Court toClass Counsel following the petition for such awards by Class Counsel as described in Section 2.5.
1.6
 
The terms “
Class
,” “
Class Member 
,” and “
Class Members
” mean all persons inthe United States who have or have had a Facebook account at any time and had their names,nicknames, pseudonyms, profile pictures, photographs, likenesses, or identities displayed in aSponsored Story, at any time on or before the date of entry of the Preliminary Approval Order.
1.7
 
The term “
Court 
” means the United States District Court for the NorthernDistrict of California.
1.8
 
The term “
Cy Pres Recipients
” shall mean any of the following entities that isapproved by the Court for a
cy pres
distribution pursuant to Section 2.3 or Section 2.4: Center for Democracy and Technology, Electronic Frontier Foundation, MacArthur Foundation, Joan GanzCooney Center, Berkman Center for Internet and Society (Harvard Law School), Information LawInstitute (NYU Law School), Berkeley Center for Law and Technology (Berkeley Law School),Center for Internet and Society (Stanford Law School), High Tech Law Institute (Santa ClaraUniversity School of Law), Campaign for Commercial-Free Childhood, Consumers Federation of America, Consumer Privacy Rights Fund, ConnectSafely.org, and WiredSafety.org.
1.9
 
The term “
 Email Notice
 
means the legal notice summarizing the proposedSettlement terms, as approved by Class Counsel, Facebook’s Counsel, and the Court, to be provided toClass Members (including Minor Subclass Members), under Section 3.3 of this Agreement viaelectronic mail or the Facebook domain of www.facebook.com. The Email Notice must besubstantially similar to the form attached hereto as Exhibit 3.
Case3:11-cv-01726-RS Document235-1 Filed10/05/12 Page3 of 28

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