Legal Fee Tracker: Clearview AI's choose-your-own-adventure privacy settlement
By David Thomas
Sept 12 (Reuters) -Most requests for class action legal fees have something in common: a settlement agreement or judgment with a concrete dollar figure from which the plaintiffs' lawyers can attempt to claim their reward.
Not so for Chicago-based law firm Loevy & Loevy, which reached an agreement with facial recognition company Clearview AI in June to resolve claims that Clearview violated the privacy rights of millions of Americans.
Instead, the lawyers agreed to drop their case in a complex deal that would grant the law firm a 39.1% share of a theoretical future settlement amount, based on Clearview's value if the beleaguered company goes public through an IPO or is liquidated through a merger or sale.
The Loevy firm estimated in a fee petition filed on Friday that the settlement fund in such a scenario could exceed $51 million. Based on that estimate, the Loevy firm's fee request would amount to $19.9 million.
"To the best of our awareness, this settlement is trailblazing, with no other class action lawyers having found a way to achieve significant value for their clients under such challenging circumstances," the firm said.
The agreement with Clearview and the fee request are now pending before U.S. District Judge Sharon Johnson Coleman, who gave preliminary approval to the deal in June.
The Loevy team, led by Jon Loevy, Michael Kanovitz and Thomas Hanson, has not disclosed how many hours the firm spent on the litigation or the lawyers' usual rates. They did not immediately respond to a request for comment.
Clearview, which denied any misconduct, is represented by a team of attorneys at Chicago-based Lynch Thompson. The company and its lawyers did not immediately respond to requests for comment.
There have been other settlements granting plaintiffs some kind of equity stake or stock in the defendants, legal experts said. Adam Pritchard, a professor at the University of Michigan Law School, noted that the ongoing fight over the plaintiffs' fee request in the $56 billion Elon Musk pay package case is about Tesla stock.
"What's unusual about this fee request is that the equity is not already publicly traded," Pritchard said of the Clearview case.
The data privacy case has its origins in a January 2020 New York Times article describing the use of Clearview's facial recognition tool by law enforcement agencies and private companies. The lawsuit accused Clearview of violating an Illinois biometric privacy law when it scraped billions of facial images from the web and sold information without consent.
The company struck a separate settlement with the American Civil Liberties Union in May 2022. Clearview agreed to stop granting paid or free access to its database of facial images to most private businesses and individuals, and to stop providing its database to government agencies in Illinois for five years.
The ACLU settlement left Clearview with "few assets" to compensate the private plaintiffs who also sued, thus requiring the lawyers to come up with a novel settlement strategy, the Loevy firm said in June.
The proposed resolution has other unusual provisions for the class and its attorneys to get paid absent a Clearview IPO or acquisition. Up until September 2027, a court-appointed settlement master could require Clearview to make a cash payment equal to 17% of its revenue since the settlement approval date.
The same master could also sell the settlement rights to a third party in order to maximize class recoveries.
A 39.1% fee request is "reasonable," the Loevy firm told Coleman in Friday's filing. The accord with Clearview is a "first of its kind equity-based settlement that dwarfs similar cases from a valuation perspective," the firm said.
So far, the settlement has attracted only one formal objection. Chicago resident Jessica Wang told the court it "would effectively trade the legal rights of class members for a nebulous promise of a small sum of money." Wang did not immediately respond to a request for comment.
- In other legal fee news, DLA Piper is requesting $1.17 million in fees from a shareholder of one of its former clients that brought a failed $180 million malpractice lawsuit against the firm.
A Manhattan federal judge in March sanctioned China AI Capital Limited and its counsel for its lawsuit against DLA Piper over the law firm's work for the Chinese software company Link Motion.
DLA Piper was represented in the lawsuit by a team of attorneys from Gibson, Dunn & Crutcher, whose partners charged between $1,245 and $1,675 an hour, according to the filing.
- Lawyers who represented T-Mobile customers in a $350 million data privacy class action settlement have asked a federal judge in Missouri to award them $46 million in legal fees after a federal appeals court struck down their earlier bid for nearly twice the amount.
(Legal Fee Tracker is a weekly feature exploring attorney compensation awards and disputes in class actions, bankruptcies and other matters. Please send tips or suggestions to D.Thomas@thomsonreuters.com.)
Read More:
Legal Fee Tracker: Giuliani's bill for Trump work could go to Georgia poll workers
Legal Fee Tracker: Sanctions pile up for Texas patent lawyer
Legal Fee Tracker: Lawyers play the long game in $2.7 billion NCAA settlement
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
