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Timothy Davis, et al v. Videoegg

July 21, 2011


The opinion of the court was delivered by: George H. Wu Judge Of The United States District Court



WHEREAS Plaintiffs contend Defendant VideoEgg, Inc. ("VideoEgg" or "Defendant") used or deposited Adobe Flash Local Shared Objects ("LSOs") on the computers or devices of consumers visiting websites; did so to circumvent such consumers' attempts to block or delete browser cookies; did so to obtain or provide information from or about such consumers to track them; did so without providing such consumers adequate notice or choice; and did so without such consumers' consent and did so contrary to their intent.

WHEREAS, on September 23, 2010, Plaintiffs filed their Class Action Complaint, which alleged claims for violations of (i) the Computer Fraud and Abuse Act, 18 U.S.C. 1030; (ii) California's Computer Crime Law, Penal Code § 502; (iii) California's Invasion of Privacy Act, California Penal Code § 630; (iv) the California Consumer Legal Remedies Act; (v) the California Unfair Competition Law, Cal. Bus. and Prof. Code § 17200; and common law claims for Trespass to Personal Property/Chattels and Unjust Enrichment. On October 6, 2010, Davis et al., v. VideoEgg, Inc. was transferred as a related case to the Valdez, et al. v. Quantcast Corporation, et al. and Aguirre v. Quantcast Corporation, et al. actions in the Central District of California.

WHEREAS, commencing in November 2010, certain of the Parties conducted a series of settlement negotiations including, among other things, an in-person mediation conducted by the Mediator on January 15, 2011, during which those Parties each represent that they have candidly aired the strengths and weaknesses in their respective litigation positions.

WHEREAS, Defendant denies any and all wrongdoing whatsoever. WHEREAS, Class Counsel have conducted extensive research and investigation relating to the claims and the underlying events and transactions alleged in the Complaint during the prosecution of the Litigation which included: (a) the interview of the Representative Plaintiffs and analysis of their computers to assess the potential claims of each individual; (b) the review of public statements, including consumer-facing statements on websites on which Defendant serves advertisements, press releases attributed to Defendant, and articles about Defendant; (c) analysis of Defendant's interactions with web browsers; and (d) research of the applicable law with respect to the claims asserted in the Complaint and arguments asserted by Defendant. Although Class Counsel believe that the claims asserted against Defendant in the Litigation have substantial merit, Class Counsel recognize and acknowledge that continued prosecution of the Litigation through trial and possible appeal would be protracted and expensive.

WHEREAS, Class Counsel and Defendant recognize and acknowledge that continued prosecution of the Litigation through trial and possible appeal would be protracted and expensive, and the outcome uncertain.

WHEREAS, each of the Parties and counsel believes, in consideration of all the circumstances and after substantial arms' length settlement negotiations between counsel, that its interests are best served by entering into the settlement set forth in the Settlement Agreement, and that this proposed settlement is fair, reasonable, adequate and in the best interests of the Settlement Class.

WHEREAS, the Settlement Agreement defines "Protected Persons" as Defendant and each of its respective past and present officers, directors, employees,insurers, agents, representatives, investors, customers, partners, joint-venturers, parents, subsidiaries (defined as any entity in which Defendant owns or controls at least 50 percent of the voting securities or the right to elect a majority of the members of the board of directors or by contract or otherwise controls such entity), affiliates, attorneys, successors and assigns; as well as all Persons that used, deployed or caused the deployment of, in online interactions with Class Members, an LSO on a computer or device owned, controlled, or used by a Class Member; and not including Six Apart for its conduct prior to its September 2010 merger with VideoEgg, Inc.

WHEREAS, the Settlement Agreement among the parties defines "Released Claims" as "Any and all claims for payment, non-economic or injunctive relief of any kind or nature and any and all liabilities, demands, obligations, losses, actions, causes of action, damages, costs, expenses, attorneys' fees and any and all other claims of any nature whatsoever, based on any of the laws, regulations, statutes or rules cited, evidenced or referenced by such allegations and statements, or any other claims, including but not limited to: all claims, including unknown claims, as set forth in Section 5.3 below, arising from or relating to (i) any of the allegations, facts or statements set out in, or to any claim that was or could have been brought in any of the Complaints; (ii) Defendant's its subsidiaries' and affiliates' use of LSOs; alleged depositing of LSOs on the computers of persons who accessed one or more of Defendant's or its subsidiaries' or affiliates' websites or other online content; and (iii) claims that Defendant or its subsidiaries or affiliates allegedly tracked users, shared their information or displayed advertising to them without sufficient notice. Notwithstanding the foregoing, excluded from Released Claims are all claims related to the use or deployment of non-VideoEgg LSOs by any Person other than the Defendant.

WHEREAS, the Settlement Agreement provides for the release of Released Claims against all Protected Persons.

WHEREAS, the Parties have engaged in intensive, complex, difficult and hard-fought arm's-length negotiations.

WHEREAS, as a result of those lengthy negotiations, the Parties have been able to reach an agreement to settle these Actions.

WHEREAS, by the terms of the proposed Settlement of this Action, in exchange for the dismissal of the Action with prejudice, dismissal of all Released Claims with prejudice, and for entry of this Final Order and Judgment, the Defendant shall take all the actions required by the Settlement Agreement, the terms of which are expressly incorporated by reference herein, in accordance with the procedures set forth therein.

WHEREAS, on March 3, 2011, this Court entered a Hearing Order (the "Hearing Order"), which, inter alia:

a. conditionally certified, for settlement purposes only, pursuant to Rule 23(a) and Rules 23(b)(2) and 23(b)(3) of the Federal Rules of Civil Procedure, a class consisting of all persons in the United States who, during the Class Period visited any other internet site employing any of Defendant's technologies involving the use of local shared objects stored in Adobe Flash Media local storage ("LSOs");

b. appointed Timothy Davis, Jessica Fishbein, Jeff Hall, and Amanda Spear as representatives of the Settlement Class;

c. appointed Scott A. Kamber and David A. Stampley of KamberLaw, LLC as counsel to the Settlement Class;

d. preliminarily approved the Settlement, pursuant to Rule 23 (c) and

(e) of the Federal Rules of Civil Procedure;

e. set a hearing to take place on July 18, 2011, at 9:30 a.m., before this Court, at the United States Courthouse for the Central District of California, 312 North Spring Street, Los Angeles, California (the "Fairness Hearing"), upon ...

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