Even as he waits to sign off on a proposed $725 million settlement to end the litigation, a federal judge has ordered Facebook parent Meta, and its lawyers, to pay nearly $1 million in sanctions for an “egregious and persistent” strategy of extending proceedings in class action complaints stemming from Cambridge Analytica’s involvement in the 2016 presidential election.
U.S. District Judge Vince Chhabria issued an order Feb. 9 partially granting a motion for sanctions against Meta and Gibson Dunn for “using delay, misdirection and frivolous arguments to make litigation unfairly difficult and expensive for their opponents.”
Although Chhabria is based in the Northern District of California, Facebook has faced lawsuits in many jurisdictions. In Chicago, for instance, Cook County State’s Attorney Kim Foxx sued Facebook and Cambridge Analytica in March 2018, alleging the companies breached the Illinois Consumer Fraud Act by mining user data to boost the 2016 prospects of former President Donald Trump.
Vince Chhabria
| cand.uscourts.gov
Four years ago, Facebook paid $5 billion to settle a Federal Trade Commission regulatory action against the company over Facebook's privacy practices.
The company also faces potentially more actions from state attorneys general.
The California lawsuits started with dozens of individual complaints. The federal district court appointed two attorneys as plaintiffs’ lead counsel. Those lawyers filed a consolidated class action on behalf of about 36 individual Facebook users hoping to represent a class of all users with a valid claim from 2007 to the present.
After nearly five years of proceedings in San Francisco federal court, the plaintiffs asked the judge in December to approve a settlement to end the court fight. Under the settlement, as many as 280 million Facebook users across the U.S. could receive a cut of the settlement. How much they will get remains unclear, as individual payout amounts will depend on how many people submit valid claims.
Attorneys who led the class action, however, expect to receive as much as $181 million in fees from the deal, or about 25% of the total settlement, in addition to any sanctions that Facebook and its lawyers may ultimately pay under Chhabria's order.
Chhabria said Facebook insisted it didn’t have to disclose what information it collected about users unless it had shared such data with third parties and that plaintiffs should’ve taken at face value the company’s assertion about what it shared.
“Merely reciting this argument shows how ridiculous it is, but Facebook and Gibson Dunn repeated it over, and over and over again — despite the presiding magistrate judge telling them many times that it made no sense,” Chhabria wrote. He said Facebook also repeatedly contorted statements by lawyers and a judge to insist it didn’t need to produce certain documents, such as internal emails, related to investigation of other apps suspected of misusing private information.
Further concerns include deliberately preventing plaintiffs from accessing information during depositions — in one instance instructing a witness not to answer questions almost two dozen times, then later conceding that direction was improper — and “all the while, Facebook and Gibson Dunn had the audacity to accuse the plaintiffs’ lawyers of delaying the case, and to assert that the plaintiffs’ reasonable efforts to obtain obviously relevant discovery were frivolous,” Chhabria wrote. “It’s almost as if Facebook and Gibson Dunn spent the better part of three years trying to gaslight their opponents, not to mention the court.”
Chhabria further said he identified “clear and convincing evidence that Facebook and Gibson Dunn’s conduct reflected a sustained, concerted, bad-faith effort to throw obstacle after obstacle in front of the plaintiffs — all in an attempt to push the plaintiffs into settling the case for less than they would have gotten otherwise. The plaintiffs are entitled to recover $925,078.51 for the fees and costs they incurred responding to this misconduct. Facebook and Gibson Dunn are jointly liable for this amount.”
Although the plaintiffs sought sanctions on several fronts, Chhabria said only the most serious warrant penalties, and not to the degree the plaintiffs requested, which was a total of more than $2 million related to named plaintiff data and an investigation into app developers. Chhabria deducted fees and costs related to the app developer investigation before then-Magistrate Judge Jacqueline Scott Corley rejected a blanket privilege assertion. He further said “it is nearly impossible to disentangle the work that was caused by the misconduct from the work that would have been done anyway” and halved the remaining request.
“While the amount is almost certainly under-compensatory, there is no chance that it’s over-compensatory,” Chhabria wrote. “Given the limits on the authority of courts to impose sanctions, it is better to err on the side of caution.”
Chhabria rejected Facebook and Gibson Dunn’s arguments the plaintiffs’ lawyers were ultimately responsible for the breadth of the litigation by asking for too much information and refusing to narrow requests. He added that even accepting allegations of plaintiffs’ counsel misconduct wouldn’t give cover for conduct like twisting the words of lawyers and judges, “resisting disclosure of obviously discoverable information,” ignoring potential evidence sources, treating “depositions like fighting matches” and encouraging their clients to be obstinant.
“Orin Snyder, who served as lead counsel when Gibson Dunn’s conduct was at its worst, should consider himself lucky that he has not been sanctioned personally,” Chhabria wrote in a footnote. “Presumably this ruling will help ensure that he will not be so lucky if he acts this way again.”
Chhabria also brushed aside due process concerns in the plaintiffs’ request for sanctions and said both entities have been given opportunities to be heard on the misconduct allegations and sanctions amount, including through hundreds of pages of briefings and evidence opposing sanctions.
“To be sure, this amount is loose change for a company like Facebook, and even for a law firm like Gibson Dunn,” Chhabria wrote, giving the companies 21 days to pay. “But it’s important for courts to help protect litigants from suffering financial harm as a result of their opponents’ litigation misconduct. And hopefully, this ruling will create some incentive for Facebook and Gibson Dunn (and perhaps even others) to behave more honorably moving forward.”
Plaintiffs in the action are represented by co-lead counsel Derek W. Loeser, of the firm of Keller Rohrback, of Seattle, and Lesley E. Weaver, of Bleichmar Fonti & Auld, of Oakland, along with other attorneys from those firms.
Jonathan Bilyk contributed to this report.