The Settlement: A Stake in the Company, Not Just Cash
The deal includes an unconventional payout structure, granting the affected class a 23% ownership stake in Clearview AI, based on the company’s September 2023 valuation. If Clearview goes public or is acquired, that stake could yield approximately $52 million. Alternatively, the class members may opt to receive 17% of the company’s revenue through 2027.
Critics, including the attorneys general, have questioned the uncertainty of financial compensation, arguing there is no concrete evidence that Clearview is on the verge of an IPO or acquisition.
Meanwhile, class counsel defended the agreement, arguing that Clearview lacks the cash reserves to pay a lump sum settlement. One attorney emphasized that this structure allows victims to reclaim some control over their biometric data—an innovative yet controversial remedy.
Attorney Fees and Class Objections
A 39% attorney fee award—totaling roughly $20 million—was another point of contention. The objecting states called it excessive, but Judge Coleman disagreed, citing precedent in the Seventh Circuit that commonly awards fees above 30% in complex class actions.
Beyond legal fees, objections also surfaced over class notification methods. Some argued that digital advertising and a dedicated settlement website were insufficient, but Judge Coleman pushed back.
“To accept the contention that it is impossible to provide meaningful notice to nationwide classes would be to foreclose class action as a method of litigation despite the increasing interconnection of our digital society,” she wrote.
