No. 17-961 IN THE Supreme Court of the United States ———— THEODORE H. FRANK, ET AL., Petitioners, v. PALOMA GAOS, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, ET AL., Respondents. ———— On Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit ———— BRIEF FOR CLASS RESPONDENTS ———— KASSRA P. NASSIRI JEFFREY A. LAMKEN Counsel of Record MICHAEL G. PATTILLO, JR. NASSIRI & JUNG LLP JAMES A. BARTA 47 Kearny St. WILLIAM J. COOPER Suite 700 MOLOLAMKEN LLP San Francisco, CA 94108 The Watergate, Suite 660 (415) 762-3100 600 New Hampshire Ave., N.W. [email protected] Washington, D.C. 20037 (202) 556-2000 [email protected] Counsel for Class Respondents (Additional Counsel Listed on Inside Cover) :,/621(3(635,17,1*&2,1&± ±:$6+,1*721'& MICHAEL ASCHENBRENER JUSTIN B. WEINER KAMBERLAW, LLC JORDAN A. RICE 201 Milwaukee St. MOLOLAMKEN LLP Suite 200 300 N. LaSalle St. Denver, CO 80206 Chicago, IL 60654 (303) 222-0281 (312) 450-6700 [email protected] QUESTION PRESENTED Federal Rule of Civil Procedure 23(b)(3) permits rep- resentatives to maintain a class action where so doing “is superior to other available methods for fairly and effi- ciently adjudicating the controversy,” and Rule 23(e)(2) requires that a settlement that binds class members must be “fair, reasonable, and adequate.” The question pre- sented is: Whether, or in what circumstances, a class-action set- tlement that provides a cy pres award of class-action proceeds but no direct relief to class members comports with the requirement that a settlement binding class members must be “fair, reasonable, and adequate” and supports class certification. (i) TABLE OF CONTENTS Page Introduction .................................................................. 1 Statement ...................................................................... 3 I. Legal Framework ............................................ 3 A. The Federal Rules Process ...................... 3 B. Rule 23’s Requirements for Class Actions ........................................................ 4 C. Rule 23’s Protections Governing Settlements ................................................ 5 D. Congressional Revisions to Class- Action Procedures ..................................... 6 E. Judicial and Congressional Consid- eration of Cy Pres Settlements ............... 7 II. Proceedings Below .......................................... 11 A. Proceedings Before the District Court ........................................................... 11 1. The Complaints and Resulting Motions ................................................. 11 2. Uncertainty and Mediation Drive the Parties to Settlement ................... 12 3. The Selection of Cy Pres Recipients ............................................. 14 4. District Court Approval ..................... 16 B. Proceedings in the Court of Appeals ...... 18 Summary of Argument ............................................... 20 Argument ...................................................................... 23 I. The Federal Rules and Relevant Statutes Do Not Prohibit Cy Pres Settlements .......... 25 (iii) iv TABLE OF CONTENTS—Continued Page A. The Text, Structure, and History of Rule 23 Do Not Support Peti- tioners’ Prohibition on Cy Pres Settlements ................................................ 25 1. Petitioners’ Categorical Ban Defies Rule 23(e)’s Clear Text ........... 25 2. Petitioners’ Categorical Ban Ignores Rule 23(e)’s Structure and History .......................................... 28 B. Federal Courts Have Identified the Limited Contexts Where Cy Pres Settlements Might Satisfy Rule 23(e) .................................................... 31 C. Rule 23(b)(3)’s “Superiority” Requirement Does Not Preclude Cy Pres Resolution .................................... 35 D. Petitioners’ and Their Amici’s Remaining Arguments Fail ..................... 37 1. Petitioners’ First Amendment Argument Is Waived and Meritless ............................................... 37 2. Cy Pres Raises Neither Redressability Nor Rules Enabling Act Concerns ...................... 38 II. Petitioners’ Proposed Attorney’s Fees Rules Are Misplaced and Unfounded ........... 40 A. Petitioners’ Attorney’s Fees Pro- posals Are Not Properly Before the Court ........................................................... 40 B. Petitioners’ Fee Rules Defy Text and History ................................................. 41 v TABLE OF CONTENTS—Continued Page III. Petitioners’ Policy Arguments Fail .............. 43 A. Existing Standards Address Petitioners’ Concerns ............................ 43 B. Petitioners’ Accusations Are Unfounded ............................................... 47 IV. This Settlement Complies with Rule 23 ....... 48 A. The Settlement Provides Valuable Prospective Relief To Prevent Violations ................................................. 48 B. The District Court Properly Found the Cash Component Adequate and Non-Distributable ......... 49 C. The District Court Did Not Abuse Its Discretion in Approving Recipients ................................................ 52 V. The Government’s Jurisdictional Argument Counsels Dismissing the Petition as Improvidently Granted ............... 54 Conclusion ..................................................................... 56 Appendix A – Federal Rule of Civil Procedure 23 ............................................................ 1a Appendix B – AARP Foundation Proposal .............. 9a Appendix C – Berkman Center for Internet & Society at Harvard University Proposal ......... 20a Appendix D – Carnegie Mellon Proposal ................. 48a Appendix E – Center for Information, Society and Policy at IIT Chicago-Kent College of Law Proposal ........................................ 86a Appendix F – Stanford Law School’s Center for Internet and Society Proposal ........................ 114a vi TABLE OF CONTENTS—Continued Page Appendix G – World Privacy Forum Proposal .................................................................... 167a vii TABLE OF AUTHORITIES Page(s) CASES Adarand Constructors, Inc. v. Mineta, 534 U.S. 103 (2001) ....................................... 54, 55 In re Airline Ticket Comm’n Antitrust Litig., 268 F.3d 619 (8th Cir. 2001) .................. 44 In re Airline Ticket Comm’n Antitrust Litig., 307 F.3d 679 (8th Cir. 2002) .................. 7 Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) ..................................... passim Amgen Inc. v. Conn. Ret. Plans & Tr. Funds, 568 U.S. 455 (2013) ....................... 3, 24, 30 Arizona v. Hicks, 480 U.S. 321 (1987) ................. 56 ATD Grp. v. Frank, No. 16-2850, 2017 WL 4014951 (2d Cir. Mar. 29, 2017) ........................ 47 In re Baby Prods. Antitrust Litig., 708 F.3d 163 (3d Cir. 2013) ....................... passim In re BankAmerica Corp. Sec. Litig., 775 F.3d 1060 (8th Cir. 2015) ............................ 31 Bay Area Laundry & Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of Cal., Inc., 522 U.S. 192 (1997) ........................... 37 In re Bayer Corp. Litig., No. 09-md- 2023, 2013 WL 12353998 (E.D.N.Y. Nov. 8, 2013) ........................................................ 44 Beastie Boys v. Monster Energy Co., 983 F. Supp. 2d 369 (S.D.N.Y. 2014) ............... 28 Beech Aircraft Corp. v. Rainey, 488 U.S. 153 (1988) ............................................. 25 Boeing Co. v. Van Gemert, 444 U.S. 472 (1980) ............................................................... 41, 42 viii TABLE OF AUTHORITIES—Continued Page(s) Bowen v. Massachusetts, 487 U.S. 879 (1988) .................................................................... 39 Califano v. Yamasaki, 442 U.S. 682 (1979) ...... 3, 39 Caperton v. A. T. Massey Coal Co., 556 U.S. 868 (2009) ............................................. 46 Carnegie v. Household Int’l, Inc., 376 F.3d 656 (7th Cir. 2004) .............................. 36 Carpenter v. United States, 138 S. Ct. 2206 (2018) .................................................................... 56 In re Cendant Corp. Litig., 264 F.3d 201 (3d Cir. 2001) ....................................................... 6 Christian Legal Soc’y Chapter of Univ. of Cal. v. Martinez, 561 U.S. 661 (2010) .............. 38 City of Los Angeles v. Lyons, 461 U.S. 95 (1983) .................................................................... 39 Connick v. Thompson, 563 U.S. 51 (2011) ........... 43 In re Dry Max Pampers Litig., 724 F.3d 713 (6th Cir. 2013) .............................. 44 Eisen v. Carlisle, 417 U.S. 156 (1974) .................. 37 Eubank v. Pella Corp., 753 F.3d 718 (7th Cir. 2014) ..................................................... 5 Evans v. Jeff D., 475 U.S. 717 (1986) .................... 25 In re Facebook Privacy Litig., 791 F. Supp. 2d 705 (N.D. Cal. 2011) ............... 12 Fischel v. Equitable Life Assurance Soc’y of U.S., 307 F.3d 997 (9th Cir. 2002) ................ 54 Fox v. Vice, 563 U.S. 826 (2011) ............................ 54 ix TABLE OF AUTHORITIES—Continued Page(s) Fraley v. Facebook, Inc., 966 F. Supp. 2d 939 (N.D. Cal. 2013) ............... 44 Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167 (2000) ........... 38 Gallego v. Northland Grp. Inc., 814 F.3d 123 (2d Cir. 2016) .......................... 45, 52 Gill v. Whitford, 138 S. Ct. 1916 (2018)................ 39 Glover v. United States, 531 U.S. 198 (2001) ...... 37 Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287 (2010) ............................................. 37