November 4, 2013
Class Action suits are one avenue to harass Big Data over its ever expanding ways to violate consumers’ privacy. But the potential for a settlement that rivals our national debt is not out of the realm, when most of the suits have millions or even hundreds of millions of plaintiffs and are based upon violations of the Wire Tap Act which allow for statutory damages of $10,000 per illegal wire tap.
The cases usually end up being settled by the violators agreeing to a cy pres award: a fund to give to organizations that educate consumers on privacy. Cy pres awards have been coming under fire as not being true to their name, which means “as close as possible”. In class actions, they are used to allow the court to make an award that promotes the interests of the class members instead of giving an award to the class itself – which means that the plaintiffs get maybe $10 and some (questionable?) organizations get millions. The US Supreme Court had the opportunity to review a recent Facebook class action settlement but declined it today. The court’s reasoning indicates they might still be interested in addressing the issue, but that this was bad case to use because it had such bad facts: the injured plaintiffs didn’t like that the organization getting $9 million is controlled by Facebook. What could be wrong with that? To read more, see Online Powerhouses – Too Big to Sue.