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No. 22-cv-00237-HSG, 2025 WL 3654114 (N.D. Cal. Dec. 17, 2025)

by Anna Ali

In this litigation, Plaintiffs allege LinkedIn unlawfully monopolized the professional social networking market in violation of Section 2 of the Sherman Act. No. 22-cv-00237-HSG, 2025 WL 3654114, at *1. Plaintiffs allege that LinkedIn protects its monopoly through “data centralization, machine learning models, and resulting trove of inferred data,” without which “a new entrant could not viably compete with LinkedIn.” Id. Defendant allegedly maintains its monopoly by engaging in two forms of anticompetitive conduct: 1) Defendant offers potential rivals access to its private user data through application programming interfaces (“APIs”), on the condition that those rivals do not compete with Defendant; and 2) Defendant integrated its user data with parent company Microsoft’s Azure cloud computing system, “tying up and driving up prices for scarce hardware resources.” Id.

I. Settlement Background

On December 17, 2025, the Northern District of California denied Plaintiffs’ unopposed motion for preliminary approval of class action settlement of their case against LinkedIn (“Defendant”). No. 22-cv-00237-HSG, 2025 WL 3654114, at *1. The parties entered into a settlement agreement after participating in mediation in December 2024. Id. The settlement agreement included a term prohibiting Defendant from including Non-Use of LinkedIn’s API Provisions in any future API Agreement for three years from the date the settlement became effective. Id. Defendant also agreed not to enforce already existing API Provisions for at least three years from the settlement effective date. Id. The settlement agreement further provided for incentive awards for named Plaintiffs for $5,000 and attorneys’ fees and costs in the amount of $4 million and $100,000, respectively. Id. at *2.

III. The Court Refused to Grant Preliminary Approval in light of Lenovo Factors.

The court refused to preliminary approve the settlement because Plaintiffs did not convince the court that the settlement was fair or reasonable, especially since the agreement included high attorneys’ fees while providing class members with only limited injunctive relief. Id. at *3. The court found that courts may preliminary approve a settlement and notice plan to the class if the proposed settlement: (1) appears to be the product of serious, informed, non-collusive negotiations; (2) does not grant improper preferential treatment to class representatives or other segments of the class; (3) falls within the range of possible approval; and (4) has no obvious deficiencies. Id., citing In re Lenovo Adware Litig., No. 15-md-02624-HSG, 2018 WL 6099948, at *7 (N.D. Cal. Nov. 21, 2018).

In this case, the court weighed the relevant factors and found that the proposed settlement agreement was not fair or reasonable. 2025 WL 3654114, at *3. The court rejected Plaintiffs’ claim that the settlement agreement was all they could hope to achieve at trial and found that Plaintiffs’ counsel sacrificed the class members’ damages claims before attempting to certify a damages class. Id.

III. The Court held that the Settlement was not Within the Range of Possible Approval.

The court first analyzed why the settlement was not within the range of possible approval. The court “consider[ed] plaintiffs’ expected recovery balanced against the value of the settlement offer.” Lenovo, 2018 WL 6099948, at *8. This required the court to evaluate (1) the value of the offer; and (2) the strength of Plaintiffs’ case. 2025 WL 3654114, at *3. The court rejected Plaintiffs’ argument that the class obtained essentially all the injunctive relief sought for three reasons. Id. at *4-5. First, the court found there was little evidence or explanation as to why the period of three years of injunctive relief was appropriate and that it did not provide essentially all the injunctive relief sought. Id. at *4.

Further, Plaintiffs did not persuade the court that the relief addressed the class members’ alleged harm. Id. Plaintiffs alleged that Defendant locked up its biggest competitive threats by offering them privileged access to valuable LinkedIn user data and conditioning the use of the data on agreement not to compete in LinkedIn’s principal lines of business. Id. The court found that there was nothing in the settlement agreement stopping Defendant from selling the data to potential competitors in the first place. Id. While Defendant represented that it anticipated continuing to enter partnerships and had already entered into agreements without contractual restrictions, the court remained unconvinced of the actual value of the injunctive relief. Id.  

Moreover, the court took issue with Plaintiffs’ claim that it would quantify the value of the injunctive relief at final approval as it held that parties must “provide enough information to allow the district court to carefully evaluate the strength of the claims, the risks of litigating those claims all the way through, and the value of the relief each class member will receive from the settlement.” Id. at *5, citing Cotter v. Lyft, Inc., 193 F. Supp. 3d 1030, 1037 (N.D. Cal. 2016). The court also reiterated that it found Plaintiffs’ abandonment of the damages claim troubling especially in light of the limited injunctive relief. 2025 WL 3654114, at *5.

Finally, in analyzing the strength of Plaintiffs’ case, the court found that Plaintiffs did not clearly explain the strength of their case, the risks and costs of trial, or the possible relief at trial. Id. Instead, the court found that the Plaintiffs presented generic arguments, largely restating the elements of an antitrust case and the remaining steps in litigation. Id. The court also rejected Plaintiffs’ efforts to compare the settlement to other cases approving injunctive-only relief because the class members in this case appeared to have given up substantially more than the cited cases. Id. at *6.

IV. The Court Held there were Markers of Potential Collusion.

The court found there was evidence of collusion or other conflicts of interest. Id. The Ninth Circuit directed district courts to look for “subtle signs of collusion,” which include whether counsel will receive a disproportionate distribution of the settlement, whether the parties negotiate a “‘clear sailing’ arrangement,” and whether the parties agree to a reverter that returns unclaimed funds to the defendant. Roes, 1-2 v. SFBSC Mgmt., LLC, 944 F.3d 1035, 1049 (9th Cir. 2019).

In this case, the court held that the settlement agreement included both a clear sailing arrangement and disproportionately high attorneys’ fees. 2025 WL 3654114, at *7. The court found $4 million in attorneys’ fees and $100,000 in costs particularly concerning in light of the early stage of the case, the limited non-monetary relief, and the absence of any monetary relief. Id. The court was skeptical of Plaintiffs’ claim that the approximate value of the injunctive relief was greater than—or anywhere close to—$16 million, especially since Plaintiffs failed to provide the court with their expert report. Id. Further, the court held that Plaintiffs did not demonstrate that the settlement agreement represented all the relief they realistically could have obtained in settlement or at trial. Id. As a result, the court held the markers of potential collusion and conflicts weighed against preliminary approval. Id.

V. Preferential Treatment did not Weigh Against the Court’s Refusal to Grant Preliminary Approval.

The court held that the settlement agreement did not provide preferential treatment to any class member. Id. at *8. The Ninth Circuit instructed that district courts must be “particularly vigilant” for signs that counsel have allowed the “self-interests” of “certain class members to infect negotiations.” Id.,citing In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 947 (9th Cir. 2011). Here, the court found that the incentive awards were not per se unreasonable since incentive awards are fairly typical in class action cases. 2025 WL 3654114, at *8. Thus, the court held that this factor weighed in favor of preliminary approval. Id.

VI. Conclusion.

Weighing all the factors, and due to the other obvious deficiencies found in the settlement agreement, the court denied preliminary approval. Id. The court ended its order setting a case management conference to discuss how the case would proceed in light of the denial. Id.  

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The opinions expressed are those of the authors and do not necessarily reflect the views of the firm or its clients. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

This article was originally published in the California Lawyers Association E-Briefs, News and Notes: February 2026