Clearview AI Settlement: Equity Payouts and Seventh Circuit Appeal

The Clearview AI settlement resolved a consolidated class action over the company’s facial recognition database by giving class members a 23% equity stake in Clearview instead of cash. The stake was valued at roughly $51.75 million based on a January 2024 company valuation of about $225 million, and a federal judge in Chicago granted final approval on March 20, 2025.¹ The catch: no one gets paid until something specific happens to Clearview as a company, and as of mid-2026 nothing has. An appeal is also pending before the Seventh Circuit, which would delay payouts even if a payout event occurred.

Who Is Covered by the Settlement

The class includes anyone who lived in the United States between July 1, 2017, and June 21, 2024, and whose facial images or biometric data ended up in Clearview’s database.² Because Clearview built its database by scraping publicly available photos from social media, news sites, and other public sources without notice or consent, the potential class runs into the tens of millions. By early 2024 the database held more than 40 billion images.³

The claims deadline was October 25, 2024.⁴ Epiq, the claims administrator, projected between 65,000 and 125,000 valid claims would come in.⁵ If you did not file a claim by that date, you are not in line for a payment even if your image was in the database.

Why the Settlement Is Equity Instead of Cash

Clearview AI has never turned a profit. The parties concluded that squeezing a large cash payout out of the company would push it into bankruptcy, where secured creditors would jump ahead of class members and leave them with little or nothing.⁵ Rather than fight over an empty pot, the settlement gave the class an ownership stake in the company, on the theory that a share of a going concern is worth more than a claim against a liquidated one.

Judge Sharon Johnson Coleman acknowledged the structure was unorthodox but found it fair under Rule 23(e), writing that “necessity is the mother of invention.”⁵ A coalition of 23 state attorneys general plus the District of Columbia, led by Vermont, filed an amicus brief opposing the deal, arguing it had “severe flaws that undermine consumers’ fundamental right to privacy” and that the 39.1% attorneys’ fee award was higher than what courts typically approve in common-fund cases.⁶ Judge Coleman overruled every objection, citing Seventh Circuit precedent that “have routinely provided fee awards of 30% or greater of a common fund.”

When Class Members Actually Get Paid

The equity converts to cash only if one of four events occurs:

Clearview goes public. The settlement fund equals 23% of the shares at the IPO price.
Clearview is sold, merges, or otherwise disposes of substantially all its assets. Class members receive the cash equivalent of their 23% stake.
The class elects a revenue-based payment, taking 17% of Clearview’s total revenue earned between final approval and the election date. This option expires September 30, 2027.
The court-appointed Settlement Master sells the class’s equity rights to a third party if he determines it is in the class’s best interest.⁷

Retired Magistrate Judge Sidney I. Schenkier serves as Settlement Master. He can inspect Clearview’s books, interview management twice a year, monitor secondary sales of Clearview stock, and sell the class’s rights if that would serve the class better than waiting.²

How Individual Payouts Will Be Divided

When money does come in, it will be split on a tiered basis that tracks how strong a claimant’s underlying privacy claim was under state law:

Illinois residents get 10 shares each.
California, New York, and Virginia residents get 5 shares each.
All other U.S. residents get 1 share.²

Illinois sits at the top because its Biometric Information Privacy Act is the strongest biometric privacy statute in the country. California, New York, and Virginia have their own privacy or consumer protection laws that gave those subclasses more viable claims than the rest of the country had.

Attorneys’ fees of 39.1% of the settlement fund and incentive payments capped at $1,500 for each named plaintiff come off the top before class members are paid.⁵

The Pending Seventh Circuit Appeal

Two class-member objectors, Robert Weissman and Rick Claypool, filed a notice of appeal on April 18, 2025. The case is No. 25-1673 in the U.S. Court of Appeals for the Seventh Circuit.⁸ Briefing wrapped up in October 2025, and the panel heard oral arguments on January 28, 2026. The appeal challenges the settlement’s valuation, the absence of injunctive relief for the nationwide class, and the adequacy of class representation.⁹

As of mid-2026 the Seventh Circuit had not ruled.¹⁰ The appeal freezes distribution: even if a triggering event happened tomorrow, payments cannot go out while the approval order is under review.

What Could Change the Stake’s Value

The class’s 23% is only worth what Clearview is worth when a payout event happens, and the company has been in flux. Founder Hoan Ton-That stepped down as CEO in December 2024, resigned as president in February 2025, and was voted off the board by shareholders in April 2025. Co-CEO Hal Lambert said the company was being taken “in a different direction.” Ton-That has no remaining role at Clearview and is now CTO at a separate firm, Architect Capital.¹¹

Under co-CEOs Lambert and Richard Schwartz, Clearview has pivoted toward federal government work in immigration enforcement, defense, and border security.¹² In September 2025, ICE’s Homeland Security Investigations arm awarded the company a $9.2 million contract for biometric matching software used in child exploitation cases and investigations into assaults on law enforcement officers. The Army and the State Department have also bought smaller licenses.¹³

Even so, Clearview remains unprofitable, with estimated annual revenue of about $8.4 million.¹² Its last known funding round was a $30 million Series B in July 2021 at a $130 million valuation.¹⁴ No IPO has been filed, and no sale or merger has been publicly announced.¹⁵ The $51.75 million figure attached to the settlement rests on a January 2024 valuation of $225 million, and whether the company is worth that much when a payout event actually arrives is an open question.

Where Things Stand in Mid-2026

None of the four triggering events have happened. Clearview has not gone public, has not been acquired, and the revenue-based payment option has not been exercised (that window closes September 30, 2027). The Settlement Master’s authority to sell the class’s rights to a third party is on the shelf but has not been publicly invoked.¹⁶ The Seventh Circuit appeal remains under advisement. Class members who filed valid claims are, for now, shareholders in a private, unprofitable facial recognition company, waiting for something to happen.

1
Law360. Judge OKs $51.75M Clearview AI Deal Despite AG Objections
2
Courthouse News Service. Clearview AI Class Settlement Memorandum Opinion and Order
3
MLex. Exclusive Interview: Clearview AI Founder Hoan Ton-That on Weathering Global Privacy Storm
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ClearviewClassAction.com. Clearview AI Class Action Settlement
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Justia. In Re: Clearview AI, Inc., Consumer Privacy Litigation, Document 631
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Bloomberg Tax. States Granted Leave to Oppose Clearview AI Privacy Settlement
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ClearviewClassAction.com. Clearview AI Class Action Settlement FAQ
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CourtListener. In Re Clearview AI, Inc., Consumer Privacy Litigation Docket
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CourtListener. Robert Weissman v. Clearview AI, Inc. Oral Argument
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CourtListener. Robert Weissman v. Clearview AI, Inc. Docket
11
The Register. Clearview Founder Ousted From Board After Shareholder Vote
12
Forbes. Clearview AI’s Founder Removed
13
Biometric Update. ICE Awards Clearview AI $9.2M Facial Recognition Contract
14
Clearview AI. Clearview AI Closes $30 Million Dollar Series B Funding Round
15
Forge Global. Clearview AI IPO
16
Constangy. Moving Ahead: Details of the Court-Approved Clearview Settlement