United States District Court, N.D. California, San Jose Division
ORDER GRANTING PLAINTIFFS' MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT [Docket Item No(s). 52]
EDWARD J. DAVILA, District Judge.
Presently before the court in this consolidated internet privacy litigation is the unopposed Motion for Preliminary Approval of Class Action Settlement filed by representative Plaintiffs Paloma Gaos, Anthony Italiano and Gabriel Priyev ("Plaintiffs"). See Docket Item No. 52. Federal jurisdiction arises pursuant to 28 U.S.C. § 1331. Having carefully considered Plaintiffs' motion and additional filings as well as the arguments of counsel at the hearing on this matter, the court has determined the motion should be granted for the reasons stated below.
I. FACTUAL AND PROCEDURAL BACKGROUND
According to the Consolidated Class Action Complaint ("CCAC"), "searching" is one of the "most basic activities performed in the Internet, " and Defendant Google, Inc.'s ("Defendant") website offers the most-used search engine in the world." See CCAC, Docket Item No. 50, at ¶¶ 15, 16. This case focuses on that proprietary search engine. Plaintiffs allege Defendant operated the search engine in such a manner that violated their Internet privacy rights by disclosing personal information to third parties.
Specifically, Plaintiffs allege that Defendant's search engine intentionally and by default included the user's search terms in the resulting URL of the search results page. Id. at ¶ 56. Thus, when a user of Defendant's search engine clicked on a link from the search results page, the owner of the website subject to the click received the user's search terms in the "referrer header" from Defendant. Id. at ¶ 57. Several web analytics services parse the search query information from web server logs, or otherwise collect the search query from the referrer header transmitted by each user's web browser. Id. at ¶ 58. Indeed, Defendant's own analytics product provide webmasters with this information in the aggregate. Id.
According to Plaintiffs, the problem with Google's disclosure of search information to these third parties is that the referrer header - which displays the user's search terms - can sometimes contain certain personal information often subject to search queries, including:
users' real names, street addresses, phone numbers, credit card numbers, social security numbers, financial account numbers and more, all of which increases the risk of identity theft. User search queries can also contain highly-personal and sensitive issues, such as confidential medical information, racial or ethnic origins, political or religious beliefs or sexuality, which are often tied to the user's personal information.
Id. at ¶ 3.
Based on these allegations, Plaintiffs assert the following causes of action: (1) violation of the Stored Communications Act ("SCA"), 18 U.S.C. § 2701; (2) breach of contract; (3) breach of the covenant of good faith and fair dealing; (4) breach of implied contract; (5) unjust enrichment; and (6) declaratory and injunctive relief. They seek to represent the following proposed class:
All persons in the United States who submitted a search query to Google at any time between October 25, 2006 and the date of notice to the class of certification. Excluded from the Class are Google, its officers and directors, legal representatives, successors or assigns, any entity in which Google has or had a controlling interest, any judge before whom this case is assigned and the judge's immediate family.
As to the relevant procedural history, Gaos initiated the action in this court on October 25, 2010. See Docket Item No. 1. Judge James Ware granted Defendant's Motion to Dismiss the original complaint with leave to amend on April 7, 2011. See Docket Item No. 24. The case was then reassigned to the undersigned on April 25, 2011, and Defendant's second Motion to Dismiss was granted with leave to amend on March 29, 2012. See Docket Item Nos. 25, 38. Gaos filed a Second Amended Complaint on May 1, 2012, adding Italiano as an additional representative plaintiff and which Defendant, once again, moved to dismiss. See Docket Item Nos. 39, 44.
Meanwhile, Priyev filed his action on February 29, 2012, in the Northern District of Illinois. See Docket Item No. 1 in Case No. 5:13-cv-00093 EJD. That court transferred the action to this district on January 8, 2013. See Docket Item No. 48 in Case No. 5:13-cv-00093 EJD. On April 30, 2013, the undersigned granted the parties' stipulation to relate and consolidate the actions for the purpose of settlement proceedings. See Docket Item No. 51. This motion followed.
II. LEGAL STANDARD
A class action may not be settled without court approval. Fed.R.Civ.P. 23(e). When the parties to a putative class action reach a settlement agreement prior to class certification, "courts must peruse the proposed compromise to ratify both the propriety of the certification and the fairness of the settlement." Staton v. Boeing Co. , 327 F.3d 938, 952 (9th Cir. 2003). At the preliminary stage, the court must first assess whether a class exists. Id . (citing Amchem Prods. Inc. v. Windsor , 521 U.S. 591, 620 (1997)). Second, the court must determine whether the proposed settlement "is fundamentally fair, adequate, and reasonable." Hanlon v. Chrysler Corp. , 150 F.3d 1011, 1026 (9th Cir. 1998). If the court preliminarily certifies the class and finds the proposed settlement fair to its members, the court schedules a fairness hearing where it will make a final determination of the class settlement. Okudan v. Volkswagen Credit, Inc., No. 09-CV-2293-H (JMA) , 2011 U.S. Dist. LEXIS 84567, at *6 (S.D. Cal. Aug. 1, 2011).
A. Class Certification
The court first examines whether this action is appropriate for class treatment keeping in mind the rules that control such an inquiry. The Federal Rules of Civil Procedure describe four preliminary requirements for class certification: (1) numerosity; (2) commonality; (3) typicality; and (4) adequacy of representation. See Fed.R.Civ.P. 23(a)(1)-(4). If these are satisfied, the court must then examine whether the requirements of ...