A federal judge has granted final approval to a $115 million to settle a class action lawsuit against Oracle for allegedly violating California privacy laws by allegedly using tracking technology to gather and sell information from hundreds of millions of people who used their software.
Under the deal, more than 3 million class members are scheduled to receive about $25 each, court documents said.
Attorneys who led the legal action have been cleared to receive $28.75 million from the settlement, or 25% of the settlement fund, according to court documents.
Richard Seeborg
| cand.uscourts.gov
U.S. District Judge Richard Seeborg granted final approval to the settlement and granted the lawyers' $28.75 million fee request in orders entered Nov. 15 in San Francisco federal court.
Seeborg serves as chief judge for the U.S. District Court for the Northern District of California, which is based in San Francisco.
The settlement would end a sprawling class action lawsuit lodged in 2022 by attorneys from the class action law firm of Lieff Cabraser Heimann & Bernstein. The lawsuit was filed on behalf of named plaintiffs Michael Katz-Lacabe, Jennifer Golbeck and Johnny Ryan.
The lawsuit asserted Oracle America of allegedly conducting surveillance on its users and then acting as a data broker, selling the information they gathered to other companies to use to target advertising.
Oracle ranks as the third largest software company in the world. They make and sell datbase software and cloud computing. Oracle products are used in a multitude of capacities, including to more easily manage massive amounts of data and support customer interactions, among many others.
The lawsuit specifically accuses Oracle of violating customer rights under the California state constitution, California state law and other state and federal privacy laws.
After Oracle failed to dismiss the lawsuit, the two sides entered mediation, which resulted in the $115 million settlement in mid-July.
Under the deal, Oracle also agreed to alter its business to come into line with the privacy laws plaintiffs claim they violated and end their alleged illegal data brokering practices.
Judge Seeborg granted preliminary approval of the settlement in August.
Several potential class members lodged objections to the deal, mostly asserting plaintiffs settled for too little in a bid to bring the lawsuit to a conclusion, rather than contest rulings from Judge Seeborg that blocked claims brought under the federal Electronic Communication Privacy Act (ECPA.)
In a motion filed in support of the settlement, plaintiffs' attorneys acknowledged the laws under which they had brought the action could entitle them to perhaps many millions or even billions of dollars more. But they said they believed they faced a difficult road in securing such a larger payday through trial or settlement.
After Seeborg granted preliminary approval, the plaintiffs' lawyers said they sent claims information to more than 214 million potential class members.
However, as of late October, they said they had received only about 3.2 million valid claims.
This valid claims rate lined up with plaintiffs' lawyers initial estimates that about 1.5% to 2.5% of potential class members would ultimately submit valid claims.
Claimants had until Oct. 17 to submit eligible claims for a cut of the settlement funds.
"The objections share Plaintiffs’ deep concern for the practices giving rise to this lawsuit, and thus primarily assert a wish for greater monetary compensation," plaintiffs' attorneys wrote in a motion seeking final approval of the deal.
"Respectfully, however, the objections fail to account for the risks, as noted by the Court at Preliminary Approval, inherent in the further litigation of these untested, novel claims. Based on the current estimate of valid claims, Class Members will recover approximately $25 each. This is meaningful compensation for non-out-of-pocket losses, especially in light of the legal and factual risks associated with litigating this case."
In his final approval order, Judge Seeborg agreed the risks of continued litigation in court weighed in favor of granting approval, rather than attempting to wait until the ECPA claims are decided and try for a greater return.
"Most objections ... express that the $115 million monetary relief is too low," Seeborg wrote. "These objections do not adequately account for the risks and delays involved in further litigation, making 'no effort to tie [their comments] to the disputes that would actually go to trial.'
"Moreover, these objections make no effort to assess the risks of class certification, summary judgment, or trial for CIPA claims that this Court found 'barely' survived dismissal."
The plaintiffs have been represented by attorneys Michael W. Sobol, David T. Rudolph, Jallé H. Dafa, John D. Maher, Amelia A. Haselkorn and Nabila Abdallah, of the Lieff Cabraser firm, of San Francisco.