Late last week, the three law firms spearheading a TikTok consumer privacy suit, which accused the company of illegally sharing users’ data with the Chinese government, moved for an award of attorneys’ fees of 33.33% of the non-reversionary $92 million settlement. The filing stresses that plaintiffs’ counsel investigated and developed the case on their own, engaged in over a year of litigation, directed experts to delve into TikTok’s source code, and pursued two hard-fought mediations.
The case dates to the Trump Administration, when the short video 0sharing app came under scrutiny for its ties to the Chinese government. The former regime labeled the Beijing-based company a national security threat and sought to ban it and predicate its domestic use on sale to an American company. The latter action never came to pass, but motivated the company to settle the instant lawsuit.
The action, a consolidation of cases transferred to Chicago, Illinois, states claims for invasion of privacy relating to the collection of the class’s biometric and other data.
In September 2021, Judge John Z. Lee found that the proposed settlement would adequately compensate approximately 89 million TikTok users, many of whom were minors. The court also underscored that proposed injunctive relief would avoid future invasions of privacy.
Since then, a handful of objectors have written to oppose the settlement, including one who claimed that the relief is insufficient to compensate for TikTok’s quite possibly criminal actions. That objector, represented by Edelson PC, also said the attorneys’ fees sought were too high.
In this week’s motion, and in response to the “Sliding Scale” attorneys’ fee approach that the objector advocated for, plaintiffs’ counsel said that the suggested method is “neither necessary nor appropriate.” In a sliding scale approach, counsel receives a diminishing percentage of the settlement as money is distributed from the fund, the motion explains.
Counsel cites Seventh Circuit case law suggesting that the sliding scale approach is disfavored in view of clients’ desire to “‘incentivize their counsel to pursue every last settlement dollar, and a declining percentage award operates to the contrary.’”
The motion also points out that the settlement figure “ranks among the nation’s highest privacy-related settlements.” Plaintiffs’ counsel argues that it will meaningfully redress the harm caused by TikTok, prevent it from happening again, and will eliminate the risk of continued but uncertain litigation. To this end, the filing notes that the plaintiffs would be up against personal jurisdiction challenges on part of the Chinese defendants and motions to compel arbitration on part of the domestic ones.
Co-lead counsel for the plaintiffs and putative class are Carlson Lynch LLP, Fegan Scott LLC, and Bird, Marella, Boxer, Wolpert, Nessim, Drooks, Lincenberg & Rhow P.C.
TikTok is represented by Wilson Sonsini Goodrich & Rosati.
