Legal Roundup: Twitter Settles Class Action Suit, Staten Island Yankees Suit Dismissed and More
Twitter to Pay $800 million to Settle Class Action
The case: Twitter investors allege that the company provided deceptive statistics to cover up stagnating or declining user engagement. Originally filed in 2016, the case was on the verge of going to trial in the U.S. District Court for the Northern District of California.
The plaintiffs alleged that CEO Jack Dorsey and other executives “hid facts about Twitter’s slowing user growth while they sold their personal stock holdings ‘for hundreds of millions of dollars in insider profits,’ ” according to Variety. The class action includes investors who purchased the stock between January and July 2015, according to Reuters.
Scorecard: Twitter will pay $809.5 million to settle the suit. The company denied any wrongdoing.
Takeaway: The settlement resolves all claims against the social media company, which plans to pay out using “cash on hand,” according to Reuters. The final agreement requires court approval.
TV News Anchor Fights Facebook Over Unauthorized Image
The case: A Philadelphia newscaster sued Facebook “over the unauthorized use of her image in advertisements for dating sites and sex-related products,” as reported by the Associated Press.
Fox29 host Karen Hepp claimed that a photograph captured by a New York City convenience store security camera caused her to suffer harm “from the unlawful dissemination and publication of her image,” according to the filing.
Scorecard: A split 2:1 decision by the Ninth U.S. Circuit in San Francisco has revived the suit, saying that Facebook is not immune from Hepp’s claim.
Takeaway: This is a closely watched case on both sides, and could reach the U.S. Supreme Court. “The Electronic Frontier Foundation and other free-speech groups filed an amicus brief in support of Facebook in the case, while the Screen Actors Guild filed one in support of Hepp,” according to the AP. It reports that the legal action now returns to the lower court, unless Facebook “appeals or asks for a rehearing.”
Did Facebook Overpay FTC Billions to Shield Zuckerberg?
The case: In a newly unsealed court document, Facebook shareholders claim that the social media company overpaid Federal Trade Commission fines to the tune of nearly $5 billion in an effort to keep CEO Mark Zuckerberg’s name out of a complaint.
The FTC fined Facebook in 2019 for “‘deceiving’ users about its ability to keep personal information private” following an investigation into the Cambridge Analytica data breach, according to The Guardian.
The suit claims that “Zuckerberg, [COO Sheryl] Sandberg, and other Facebook directors agreed to authorize a multi-billion settlement with the FTC as an express quid pro quo to protect Zuckerberg from being named in the FTC’s complaint, made subject to personal liability, or even required to sit for a deposition.”
Scorecard: The case has recently been filed and has not reached a resolution.
Takeaway: According to the court filing, “The central problem of managing Facebook is balancing its users’ privacy interests with the Company’s need to monetize user data to generate revenue…under Zuckerberg’s move-fast-and-break-things leadership, Facebook has repeatedly failed to comply with its data privacy obligations.”
Facebook is now under scrutiny for yet another privacy issue, “admitting it mishandled millions of users’ passwords for Instagram,” as reported by The Washington Post.
Nearly All of Staten Island Yankees Claims Against MLB and Yankees Dismissed
The case: Nostalgic Partners, owners of the now defunct minor league Staten Island Yankees, are suing for $20 million, alleging that the New York Yankees and Major League Baseball “repeatedly promised to maintain their relationship (which began in 1999) in perpetuity,” according to the New York Post.
Scorecard: Judge Barry Ostrager of the New York State Supreme Court tossed out seven of the eight causes of action, according to the Post, and the one cause of action remaining sends the case to trial.
Takeaway: MLB recently downsized its minor league organization from 160 to 120 teams, leaving the Staten Island Yankees out. Meanwhile, a new Staten Island baseball franchise in the independent Atlantic League of Professional Baseball is in the works to fill the void, and ownership is currently seeking submissions for a team name, according to the Staten Island Advance. &