Privacy MVP: Cooley's Michael Rhodes (Law360)

Cooley LLP partner Michael Rhodes has aptly applied traditional legal principles to new technologies to help Facebook Inc. defeat objections to a pair of cutting-edge class action settlements over its data use practices and to prevent class certification in a suit over Google Inc.'s AdWords program, earning him a place among Law360's Privacy MVPs.

During the past year, Rhodes, who chairs the firm's national litigation practice, has demonstrated his versatility and grasp of an emerging legal landscape by successfully negotiating settlements for Facebook in two privacy cases where valuing the consumers' injuries proved difficult. He also used the U.S. Supreme Court's landmark decision in Dukes v. Wal-Mart to help Google prevail in one of its first class-certification fights and guided two Sony Corp. units out of a case of first impression under a federal video privacy statute.

"He's an extremely able and expertly creative lawyer, and he has the ability to understand his clients' needs and address them in a way that gets results that are as effective and efficient as possible," said Weil Gotshal & Manges LLP intellectual property and media practice head Bruce Rich, whose work has frequently overlapped with Rhodes' during the past decade.

Achieving these results in the privacy space is even more difficult because of gaps between existing law and the novel claims being brought to court over different ways that companies are using and sharing data, Rich noted.

"In the technology environment, there usually isn't some pattern or some established precedent that lawyers can fall back on," he said. "Instead, any lawyer that is effective in this space has to be able to map pre-existing legal precedent against new facts in a way that makes sense."

Rhodes, who works out of the firm's San Francisco and San Diego offices, has used this skill in recent months to untangle opposition — by both potential class members and a federal judge — to pacts in separate privacy class actions over Facebook's use of consumers' information and images.

The Ninth Circuit in September upheld a $9.5 million settlement of a class action over the social networking site's failure to obtain user consent to track online purchases and post them on users' pages through its Beacon feature, rejecting arguments by the four class members that the settlement was unfair because it left them with no compensation. Instead, the company was allowed to use the settlement money to set up an independent charity organization whose mission would be to promote the interests of privacy and security, which was a novel settlement proposal.

Facebook again faced opposition to its settlement terms in a suit over its alleged nonconsensual use of users' photos in ads, when Northern District of California Judge Richard Seeborg in August rejected the parties' first $20 million proposal over concerns about the $10 million set aside for attorneys' fees and the inability of the potential class, which could include as many as one in three Americans, to benefit financially from the agreement.

But after reworking the terms of the agreement to allow Facebook users whose images appeared in the company's sponsored stories ads to claim a cash payment of up to $10 each and to permit Facebook to oppose plaintiffs' attorneys' petition for fees and expenses, Judge Seeborg granted preliminary approval to the deal Monday.

"Trying to craft a settlement in these cases is difficult because it's hard to value the cost of this alleged harm to consumers, and there's no benchmark to compare them to like in other practice areas," Rhodes said. "That results in settlements being much more hand-crafted and driven by [the] unique circumstances of each case."

In January, Rhodes coupled the specialized nature of harm in privacy cases with the precedent set in the Supreme Court's Dukes decision to help Google defeat class certification in a suit claiming the company charged for ads on unused and rarely visited websites through misleading contracts. The Ninth Circuit is currently considering an appeal of the district court's decision denying certification on the grounds that the plaintiffs had failed to show that restitution could be calculated by methods of common proof.

The Ninth Circuit is also gearing up to consider another ground-breaking decision that went in the favor of one of Rhodes' clients this year: the September dismissal of a class action accusing Sony of illegally storing and sharing customers' movie and video game purchase and rental histories. The appeal of the lower court's decision that there is no private right of action under the Video Privacy Protection Act for the retention of personal information will mark the Ninth Circuit's first consideration of the statute as it applies to the retention of customer data.

With a busy and successful year behind him, Rhodes, who has been named to Law360's Privacy MVP list for the second year in a row, shows no signs of slowing down in the near future, as evidenced by his ongoing work in other pending matters such as litigation over LinkedIn Corp.'s recent data breach and Facebook's alleged use of "referer headers."

"I love arguing cases that involve the application of the law to new technology and technological models," he said. "I wouldn't trade it for anything."

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