Petition for Writ of Certiorari — David R. Watkins, et al., Petitioners v. Brian F. Spector, et al.
Supreme Court briefOct 27, 2021
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APPENDIX
i
APPENDIX
TABLE OF CONTENTS
Appendix A Opinion in the United States Court of
Appeals for the Eleventh Circuit
(June 3, 2021) . . . . . . . . . . . . . . . . App. 1
Appendix B Order Granting Final Approval of
Settlement, Certifying Settlement
Class, and Awarding Attorney’s Fees,
Expenses and Service Awards in the
United States District Court for the
Northern District of Georgia Atlanta
Division
(January 13, 2020) . . . . . . . . . . . App. 64
Appendix C Final Order and Judgment in the
United States District Court for the
Northern District of Georgia Atlanta
Division
(January 13, 2020) . . . . . . . . . . App. 186
Appendix D Order Denying Rehearing in the
United States Court of Appeals for the
Eleventh Circuit
(July 29, 2021). . . . . . . . . . . . . . App. 196
Appendix E Transcript of the Final Settlement
Approval Hearing in the United States
District Court for the Northern
District of Georgia Atlanta Division
(December 19, 2019) . . . . . . . . . App. 199
Appendix F Fed. R. Civ. P. 23 . . . . . . . . . . . App. 323
App. 1
APPENDIX A
[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 20-10249
________________________
D.C. Docket No. 1:17-md-02800-TWT
[Filed June 3, 2021]
___________________________________
In re Equifax Inc. Customer Data
)
Security Breach Litigation
)
---------------------------------------------------- )
SHIYANG HUANG, et al.,
)
)
Movants-Appellants,
)
)
BRIAN F. SPECTOR, et al.,
)
)
Plaintiffs-Appellees,
)
)
versus
)
)
EQUIFAX INC., et al.,
)
)
Defendants-Appellees.
)
___________________________________ )
App. 2
________________________
Appeals from the United States District Court
for the Northern District of Georgia
________________________
(June 3, 2021)
Before MARTIN, GRANT, and BRASHER, Circuit
Judges.
MARTIN, Circuit Judge:
This appeal arises from the 2017 data privacy
breach of Equifax Inc. and its affiliates (collectively
“Equifax”). After the breach came to light, scores of
class actions against Equifax flooded the courts. The
cases were consolidated in the Northern District of
Georgia, where Plaintiffs and Equifax eventually
settled their dispute, resulting in “the largest and most
comprehensive recovery in a data breach case in U.S.
history by several orders of magnitude.” But try as they
might, the parties could not please everyone. Of the
approximately 147 million class members, 388 people
objected to the settlement. Even so, the District Court
approved the settlement, certified the settlement class,
awarded attorney’s fees and expenses, and approved
incentive awards for the class representatives. Several
of the objectors appealed, challenging the District
Court’s approval order as well as some related rulings.
This case highlights the role objectors play in the
settlement of class actions. We begin with the
knowledge that settlements are “highly favored in the
law” because “they are a means of amicably resolving
doubts and uncertainties and preventing lawsuits.” In
App. 3
re Nissan Motor Corp. Antitrust Litig., 552 F.2d 1088,
1105 (5th Cir. 1977) (quotation marks omitted).1 The
settlement here is a prime example. Absent the
settlement, the class action could have faced serious
hurdles to recovery, and now the class is entitled to
significant settlement benefits that may not have even
been achieved at trial. And you need not take our word
for this. The Federal Trade Commission, the Consumer
Financial Protection Bureau, and the Attorneys
General for 48 states, the District of Columbia, and
Puerto Rico all support the settlement.
Yet as we mentioned, not everyone bound by this
class action settlement agrees with it, and class
members who oppose the settlement have the right to
object. See Fed. R. Civ. P. 23(e)(5)(A). Often times
objectors play a “beneficial role in opening a proposed
settlement to scrutiny and identifying areas that need
improvement.” David F. Herr, Annotated Manual for
Complex Litigation § 21.643 (4th ed. 2021) [hereinafter
“Manual for Complex Litigation”]. And because
objectors have the right to object, it is our obligation to
closely review the issues they present. Consistent with
our obligation, we have studied the hundreds of pages
of briefing, sifted through the flurry of Rule 28(j)
letters, and familiarized ourselves with the enormous
record in this case. After this careful consideration, and
with the benefit of oral argument, we affirm the
District Court’s rulings in full, subject to one small
asterisk. Specifically, after the District Court approved
1
In Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (en
banc), we adopted as binding precedent all decisions of the former
Fifth Circuit handed down before October 1, 1981. Id. at 1209.
App. 4
incentive awards for the class representatives, a panel
of this Court held that such awards are prohibited. See
Johnson v. NPAS Sols., LLC, 975 F.3d 1244, 1260 (11th
Cir. 2020). As in NPAS Solutions, we must reverse the
District Court’s ruling on the incentive awards alone
and remand this case to the District Court solely for
the limited purpose of vacating those awards. See id.
I. BACKGROUND
In 2017, Equifax, a consumer reporting agency,
announced it had been subject to a data privacy breach
affecting the personal information of almost 150 million
Americans. The breach involved some of the most
sensitive personal information possible: all nine digits
of Americans’ Social Security numbers, coupled with
their names, dates of birth, and addresses, among
other things. Over 300 class actions against Equifax
were filed across the nation, all of which came to be
consolidated and transferred by the Judicial Panel on
Multidistrict Litigation to then-Chief Judge Thomas W.
Thrash in the Northern District of Georgia.2 The
District Court established separate tracks for the
consumer claims and the financial institution claims.
This appeal relates to the consumer claims.
In 2018, Plaintiffs filed a 559-page consolidated
class action complaint against Equifax. The complaint
included 96 named plaintiffs who brought a host of
statutory and common law claims under federal and
state law. These claims included violations of the Fair
2
Chief Judge Thrash ended his service as Chief Judge for the
Northern District of Georgia earlier this year. For consistency, we
refer to him by his former title.
App. 5
Credit Reporting Act, the Georgia Fair Business
Practices Act, and various state consumer protection
and data breach statutes. Plaintiffs also brought claims
for negligence, negligence per se, unjust enrichment,
and breach of contract. Plaintiffs alleged that, due to
the data breach, they are “subject to a pervasive,
substantial and imminent risk of identity theft and
fraud.” They also alleged that they have spent time,
money, and effort attempting to mitigate the risk of
identity theft and that many have already been victims
of identity theft.
Equifax filed a motion to dismiss the complaint in
its entirety, which the District Court granted in part
and denied in part. The District Court dismissed the
Fair Credit Reporting Act claims, the Georgia Fair
Business Practices Act claims, as well as some state
statutory claims. However, it allowed the negligence
and negligence per se claims under Georgia law, as
well as other state statutory claims, to go forward. All
the while, the parties engaged in robust settlement
negotiations. Layn Phillips, a retired federal district
court judge with experience in data breach cases,
served as the mediator. The parties’ efforts paid off.
After 18 months of negotiations, they reached a
settlement agreement. The parties then consulted and
negotiated with various federal and state regulators
and revised their agreement as a result of those
consultations. Ultimately, the Federal Trade
Commission, the Consumer Financial Protection
Bureau, and the Attorneys General for 48 states, the
District of Columbia, and Puerto Rico settled with
Equifax, agreeing that the settlement fund in this case
provides redress to consumers. In July 2019, the
App. 6
parties presented their final settlement agreement to
the District Court.
The District Court described the parties’ settlement
as “the largest and most comprehensive recovery in a
data breach case in U.S. history by several orders of
magnitude.” Under the terms of the settlement,
Equifax agreed to pay an initial $380.5 million into a
fund to benefit the class members and to pay attorney’s
fees and expenses, incentive awards, as well as notice
and administration costs. The settlement includes the
following benefits for each class member:3
• Reimbursement for up to $20,000 of
documented, out-of-pocket losses fairly traceable
to the data breach (e.g., the cost of freezing a
credit file, professional fees due to identity
theft);
• Compensation of $25 per hour for up to 20 hours
(subject to a $38 million cap) for time spent
taking preventative measures or dealing with
identity theft, with no documentation needed for
the first 10 hours;
• Four years of three-bureau credit monitoring
and identity protection services through
Experian;
• An additional six years of one-bureau credit
monitoring and identity protection services
3
The settlement class includes the “approximately 147 million
U.S. consumers identified by Equifax whose personal information
was compromised as a result of the cyberattack and data breach
announced by Equifax Inc. on September 7, 2017.”
App. 7
through Equifax, which will be provided
separately by Equifax and not paid for from the
settlement fund;
• Alternative cash compensation (subject to a $31
million cap) for class members who already have
credit monitoring and who do not wish to enroll
in the settlement’s programs;4 and
• Seven years of identity restoration services
through Experian to help class members who
believe they may have been victims of identity
theft.
Beyond these class benefits, Equifax will pay an
additional $125 million if needed to satisfy claims for
out-of-pocket losses and potentially $2 billion more if
all 147 million class members sign up for credit
monitoring. In no circumstance does money in the
settlement fund revert back to Equifax. Instead, if
money remains in the settlement fund after the claim
periods, the settlement provides ways in which the
4
When the settlement was first announced to the public, media
reports said consumers could get $125 in alternative cash
compensation under the settlement. The original short-form notice
was ambiguous—it simply stated class members “can request” and
“may be eligible” for $125 if they already had credit monitoring.
However, the long-form notice, which was posted the same day
that class members could start making claims, stated in no
uncertain terms that consumers who already had credit
monitoring could get up to $125, which would be reduced on a
proportional basis if the $31 million cap was exceeded. After the
media reports, class counsel cleared up this confusion, and those
who had already submitted a claim for the alternative cash
compensation were given the opportunity to instead choose credit
monitoring.
App. 8
above class benefits are increased. Equifax is also
required to spend a minimum of $1 billion on data
security over five years and to comply with certain data
security requirements. Its compliance will be audited
by an independent assessor and subject to the District
Court’s enforcement powers if it fails to comply.
The District Court ordered that notice of the
settlement agreement be provided to the class, such
that class members had the opportunity to opt-out of
the class or object to the settlement. The District Court
required those who wished to object to provide certain
information about their objections in order to prevent
a “chaotic” objection process. To provide notice of the
settlement to the class, class counsel adopted “an
innovative and comprehensive program,” including
multiple emails, a social media campaign, newspaper
and radio advertising, a settlement website, and a call
center to answer questions. The response from the
class was “unprecedented,” as the claims rate exceeded
10 percent of the class. By contrast, in another recent
data breach case, the claims rate was only about 1.7
percent. As we’ve mentioned, out of the approximately
147 million class members, 388 people objected.
In December 2019, the District Court held a hearing
to consider the motions for final approval of the
proposed class settlement, attorney’s fees and
expenses, and incentive awards for the class
representatives. After hearing arguments from
Plaintiffs, Equifax, and the objectors who wished to
speak, the District Court issued its rulings from the
bench. The District Court approved the settlement as
fair, reasonable, and adequate under the factors set
App. 9
forth in Federal Rule of Civil Procedure 23(e) and
Bennett v. Behring Corp., 737 F.2d 982 (11th Cir.
1984). The District Court then approved the requested
attorney’s fees and expenses as well as incentive
awards for the class representatives.
After issuing its oral rulings, the District Court
directed Plaintiffs’ counsel to prepare a written order
“summariz[ing] [its] rulings on the motions and [its]
adoption basically of the arguments that have been
made by the Plaintiffs and by Equifax in the hearing
today.” The District Court instructed Plaintiffs to
obtain Equifax’s approval before submitting the
proposed order to the court, which it would then
“consider signing.” The District Court later issued a
written order memorializing its rulings. The order
approved the settlement; certified the settlement class,
finding that the class satisfied the requirements of
Rule 23(a) and (b)(3); and approved the requested
attorney’s fees and expenses and incentive awards for
the class representatives. Finally, the order overruled
the objections to the settlement and made findings that
some of the objectors were serial objectors.5
5
Serial objectors are those who bring objections that are merely
“boilerplate and immaterial, while their true goal is to get paid
some fee to go away.” 4 William B. Rubenstein, Newberg on Class
Actions § 13:20 (5th ed. 2021) [hereinafter “Newberg”]. The District
Court’s findings on this topic are largely unrelated to the merits of
this appeal and may be dicta in any event. We do not review those
findings here. See Keating v. City of Miami, 598 F.3d 753, 761
(11th Cir. 2010) (“[A]n appellate court ‘reviews judgments, not
statements in opinions.’”).
App. 10
Several objectors appealed, and the District Court
granted Plaintiffs’ motion to require the objectors to
post appeal bonds in order to ensure payment of costs
on appeal.
With the dust now settled,6 this consolidated case
presents five appeals filed by six objectors: George
Cochran, John Davis, Theodore Frank and David
Watkins (who filed a single appeal and are collectively
referred to as “Mr. Frank”), Shiyang Huang, and Mikell
West. Collectively, we refer to the six objectors as the
“Objectors.” This is their appeal.
II. DISCUSSION
The Objectors raise a wide array of issues for our
consideration. We start by addressing the jurisdictional
questions. From there, and in hopes of maintaining
some semblance of organization, we proceed in as close
to chronological order as this record permits. We begin
our discussion of the merits by addressing the
Objectors’ challenge to the requirements the District
Court imposed on them in its order directing notice of
the settlement to the class. We next consider the
Objectors’ various challenges to the District Court’s
approval order: the process used in adopting the order
and the court’s decisions approving the class action
6
A total of nine objectors appealed the District Court’s orders. Two
of those nine objectors filed a single appeal, so eight appeals were
filed in this Court. This Court sua sponte dismissed two of the
eight appeals for lack of jurisdiction. And in an order issued
together with this opinion, we now dismiss the appeal filed by
Christopher Andrews, leaving us with five appeals filed by six
objectors.
App. 11
settlement, certifying the settlement class, awarding
attorney’s fees and expenses, and approving incentive
awards for the class representatives. Finally, we
address the Objectors’ challenge to the appeal bonds
imposed by the District Court.
A. Jurisdiction
We start now with two jurisdictional questions,
which we consider de novo. See Jacobson v. Fla. Sec’y
of State, 974 F.3d 1236, 1245 (11th Cir. 2020).7 First,
we address whether Plaintiffs had Article III standing
to bring their claims. Second, we consider whether
Article III’s case-or-controversy requirement ceased to
be met once the parties agreed to settle their dispute.
7
The parties do not dispute that we have jurisdiction over the
Objectors’ appeals. This is for good reason. In Devlin v.
Scardelletti, 536 U.S. 1, 122 S. Ct. 2005 (2002), the Supreme Court
held that nonnamed class members “who have objected in a timely
manner to approval of the settlement at the fairness hearing have
the power to bring an appeal without first intervening.” Id. at 14,
122 S. Ct. at 2013. Otherwise, class members would be deprived of
“the power to preserve their own interests in a settlement that will
ultimately bind them, despite their expressed objections before the
trial court.” Id. at 10, 122 S. Ct. at 2011. Although Devlin involved
objectors to a Rule 23(b)(1) settlement, which did not permit
objectors to opt out of the settlement, its logic also applies to
objectors to a Rule 23(b)(3) settlement who did not opt out (like
those here) because they are bound by the settlement. See, e.g.,
Fidel v. Farley, 534 F.3d 508, 512–13 (6th Cir. 2008).
App. 12
1. Article III Standing8
In order for a federal court to have jurisdiction
under Article III of the Constitution, a plaintiff must
have standing to bring the lawsuit. See Lujan v. Defs.
of Wildlife, 504 U.S. 555, 559–60, 112 S. Ct. 2130,
2135–36 (1992). And for the plaintiff to have standing,
he must “show that the defendant harmed him, and
that a court decision can either eliminate the harm or
compensate for it.” Muransky v. Godiva Chocolatier,
Inc., 979 F.3d 917, 924 (11th Cir. 2020) (en banc). More
to the point, the “irreducible constitutional minimum”
of standing contains three requirements. Lujan, 504
U.S. at 560, 112 S. Ct. at 2136. First, the plaintiff must
have suffered an “injury in fact,” which means the
injury is “concrete and particularized” and “actual or
imminent,” as opposed to “conjectural or hypothetical.”
Id. (quotation marks omitted). Second, the plaintiff’s
injury must be “fairly traceable” to the challenged
conduct of the defendant and not the result of some
action by a third party not before the court. Id.
(quotation marks omitted and alterations adopted).
Finally, it must be likely that the plaintiff’s injury will
be redressed by a favorable court decision. Id. at 561,
112 S. Ct. at 2136. These requirements apply with full
force in a class action, Muransky, 979 F.3d at 924, and
even at the settlement approval stage, as a “court is
8
Mr. Huang says Plaintiffs were required to prove they had Article
III standing with evidentiary support at the final approval stage,
yet he says Plaintiffs failed to do so. However, Mr. Huang’s cited
cases do not actually support his proposition. In any event, he does
not raise any factual doubt about Plaintiffs’ standing, so we need
not decide this issue here.
App. 13
powerless to approve a proposed class settlement if it
lacks jurisdiction over the dispute, and federal courts
lack jurisdiction if no named plaintiff has standing,”
Frank v. Gaos, 586 U.S. __, 139 S. Ct. 1041, 1046
(2019) (per curiam). On the other hand, only one named
plaintiff must have standing as to any particular claim
in order for it to advance. Wilding v. DNC Servs. Corp.,
941 F.3d 1116, 1124–25 (11th Cir. 2019).
Mr. Huang argues Plaintiffs lacked Article III
standing to bring their claims for two reasons. First, he
says those Plaintiffs who have not had their identities
stolen have not suffered an injury in fact. Second, he
says those Plaintiffs who have not had their identities
stolen cannot have their injuries redressed by the
settlement, as the settlement does not stop third
parties from committing identity theft. We address
each issue in turn.
i. Injury in Fact
We now turn to the question of whether Plaintiffs
who have not had their identities stolen suffered an
injury in fact. We hold that they have. Again, to
establish standing, a plaintiff’s injury must be
(1) concrete, (2) particularized, and (3) either actual or
imminent. Lujan, 504 U.S. at 560, 112 S. Ct. at 2136.
Only the first and third elements are at issue here, so
we focus on them in more detail.
An injury is concrete if the harm is “real.”
Muransky, 979 F.3d at 926 (quotation marks omitted).
Economic injuries are “[c]ertainly” concrete.
Debernardis v. IQ Formulations, LLC, 942 F.3d 1076,
1084 (11th Cir. 2019). So are identity theft and
App. 14
damages resulting from such theft, see Resnick v.
AvMed, Inc., 693 F.3d 1317, 1323 (11th Cir. 2012), as
well as wasted time, Salcedo v. Hanna, 936 F.3d 1162,
1173 (11th Cir. 2019). A plaintiff can also satisfy the
concreteness element by showing a “material” risk of
harm. Muransky, 979 F.3d at 927 (quotation marks
omitted). This Court has said this is a “high standard”
that requires courts to consider the “magnitude of the
risk.” Id. This Court has also addressed injuries
incurred while mitigating a risk of harm, such as
purchasing a credit freeze or spending time or effort to
minimize a risk of identity theft. “[A]ny assertion of
wasted time and effort necessarily rises or falls along
with this Court’s determination of whether” a risk of
injury is a concrete harm. Id. at 931. For that reason,
when a plaintiff faces a sufficient risk of harm, the
time, money, and effort spent mitigating that risk are
also concrete injuries.
We now turn to the actual-or-imminent element.
When there is no actual injury, an imminent injury
must be “certainly impending,” as allegations of
“possible future injury are not sufficient.” Clapper v.
Amnesty Int’l USA, 568 U.S. 398, 409, 133 S. Ct. 1138,
1147 (2013) (emphases and quotation marks omitted).
It need not be “literally certain” that the injury will
come about, but there must be a “substantial” risk. Id.
at 414 n.5, 133 S. Ct. at 1150 n.5 (quotation marks
omitted).
App. 15
Applying these principles to the case before us,
Plaintiffs have plausibly alleged an injury in fact.9
Plaintiffs alleged that “hackers obtained at least 146.6
million names, 146.6 million dates of birth, 145.5
million Social Security numbers, 99 million addresses,
17.6 million driver’s license numbers, 209,000 credit
card numbers, and 97,500 tax identification numbers.”
With this information, Plaintiffs alleged that “identity
thieves can create fake identities, fraudulently obtain
loans and tax refunds, and destroy a consumer’s creditworthiness.” Plaintiffs also alleged they “remain
subject to a pervasive, substantial and imminent risk
of identity theft and fraud” due to the “highly-sensitive
nature of the information stolen,” and that they spent
time, money, or effort dealing with the breach. Given
the colossal amount of sensitive data stolen, including
Social Security numbers, names, and dates of birth,
and the unequivocal damage that can be done with this
type of data, we have no hesitation in holding that
Plaintiffs adequately alleged that they face a “material”
and “substantial” risk of identity theft that satisfies the
concreteness and actual-or-imminent elements. See
Muransky, 979 F.3d at 927; Clapper, 568 U.S. at 414
n.5, 133 S. Ct. at 1150 n.5.
The actual identity theft already suffered by some
Plaintiffs further demonstrates the risk of identity
theft all Plaintiffs face—though actual identity theft is
by no means required when there is a sufficient risk of
9
Mr. Huang says Plaintiffs forfeited any arguments in support of
standing by not raising them in the District Court. But Plaintiffs
pled countless allegations of injury in their complaint. We
therefore reject Mr. Huang’s argument.
App. 16
identity theft. Here, dozens of Plaintiffs allege they
have already had their identities stolen and thus
suffered injuries in many different ways. Specifically,
those who suffered identity theft had numerous
unauthorized charges and accounts made in their
name; incurred specific numerical drops in their credit
scores; had their ability to obtain loans affected;
purchased credit monitoring; and spent time, money,
and effort trying to mitigate their injuries, including
disputing fraudulent activity, filing police reports, and
otherwise dealing with identity theft. There is no
dispute that these Plaintiffs’ allegations of identity
theft and resulting damages “constitute[] an injury in
fact under the law.”10 Resnick, 693 F.3d at 1323. As
such, the allegations of some Plaintiffs that they have
suffered injuries resulting from actual identity theft
support the sufficiency of all Plaintiffs’ allegations that
they face a risk of identity theft. Indeed, in Tsao v.
Captiva MVP Restaurant Partners, LLC, 986 F.3d
1332 (11th Cir. 2021), our Court recently recognized
that “some allegations of actual misuse or actual access
to personal data” support Article III standing for “a
data breach based on an increased risk of theft or
misuse.” Id. at 1340 (collecting cases); see also, e.g.,
McMorris v. Carlos Lopez & Assocs., LLC, 995 F.3d
10
These Plaintiffs’ allegations of this sort of “injury in fact” provide
them with Article III standing. And as noted, only one named
plaintiff must have standing for any particular claim to advance.
Wilding, 941 F.3d at 1124–25. This means we could also undertake
a claim-by-claim analysis of the many claims in this case to
determine if there is at least one named plaintiff with the sort of
injury required to bring each claim. But because we conclude that
all Plaintiffs have adequately alleged a sufficient risk of identity
theft, we need not undertake this additional task.
App. 17
295, 301–02 (2d Cir. 2021) (“[C]ourts have been more
likely to conclude that plaintiffs have established a
substantial risk of future injury where they can show
that at least some part of the compromised dataset has
been misused.”) (collecting cases).
Beyond the sufficient risk of identity theft and
resulting injuries, a vast number of Plaintiffs who have
not yet suffered identity theft also allege they have
spent time, money, and effort mitigating the risk of
identity theft. Their efforts include purchasing credit
freezes, monitoring their financial accounts, and
purchasing credit monitoring, among other things. As
explained above, because the risk of harm here is a
sufficient injury, the allegations of mitigation injuries
made by these Plaintiffs are also sufficient. See
Muransky, 979 F.3d at 931 (“[A]ny assertion of wasted
time and effort necessarily rises or falls along with this
Court’s determination of whether the risk posed . . . is
itself a concrete harm.”).
Plaintiffs have easily shown an injury in fact.
ii. Redressability
With the issue of injury now resolved, we move on
to address whether Plaintiffs’ injuries are redressed by
the settlement. Mr. Huang says those Plaintiffs who
have not had their identities stolen cannot have their
injuries redressed by the settlement because the
settlement does not stop third parties from committing
identity theft. We need not linger on this issue, as Mr.
Huang’s argument misunderstands the allegations of
the complaint as well as the nature of the settlement.
The Plaintiffs who have not suffered identity theft did
App. 18
not sue Equifax in order to stop third parties from
committing identity theft. Instead, they sued Equifax
because of their injuries associated with the risk of
identity theft. As discussed, these injuries include the
time, money, and effort spent mitigating the risk of
identity theft, including purchasing credit freezes,
monitoring their financial accounts, and purchasing
credit monitoring, among other things.
The settlement redresses the injuries resulting from
these mitigation efforts. Specifically, for each class
member, the settlement includes reimbursement for up
to $20,000 of documented, out-of-pocket losses fairly
traceable to the data breach (e.g., the cost of
purchasing credit freezes and credit monitoring), and
compensation of $25 per hour for up to 20 hours for
time spent taking preventative measures against
identity theft. And while the additional settlement
benefits of 10 years of credit monitoring and seven
years of identity restoration services might not stop a
third party from committing identity theft, these
benefits will help limit Plaintiffs’ injuries. Credit
monitoring can quickly alert Plaintiffs to an identity
theft, and identity restoration services will help
minimize the time and money spent by Plaintiffs to
combat an identity theft. The settlement thus redresses
Plaintiffs’ injuries. See Lujan, 504 U.S. at 561, 112 S.
Ct. at 2136.
2. Case-or-Controversy Requirement
With the issue of standing resolved, we now
consider Mr. Huang’s other argument concerning
Article III jurisdiction. In his view, the District Court
lacked jurisdiction to approve the settlement because
App. 19
once the parties agreed to settle their dispute, there
was not a case or controversy between the parties. Of
course, Article III permits federal courts to address
only “cases and controversies,” which limits their
jurisdiction to “questions presented in an adversarial
context.” Graham v. Butterworth, 5 F.3d 496, 498–99
(11th Cir. 1993) (citing Flast v. Cohen, 392 U.S. 83,
94–95, 88 S. Ct. 1942, 1949–50 (1968)). The controversy
must exist at all stages of the litigation. Preiser v.
Newkirk, 422 U.S. 395, 401, 95 S. Ct. 2330, 2334
(1975).
We are aware of no court that has adopted Mr.
Huang’s idea that a district court is somehow divested
of jurisdiction (and thus lacks authority to approve the
settlement) once parties agree to settle a class action.
As we understand Mr. Huang’s position, no class action
could ever be approved, because as soon as the parties
decide to settle, the case or controversy would vanish,
and the court would therefore lack jurisdiction to
approve the settlement.
To the contrary, we hold that Article III’s case-orcontroversy requirement is satisfied throughout the
settlement process because the litigation remains in an
adversarial posture during that process. First, the
parties themselves remain in adversarial positions
until the district court approves the settlement. Rule
23(e) states a class action “may be settled . . . only with
the court’s approval.” Fed. R. Civ. P. 23(e). This means
the parties’ decision to settle a class action is not
consummated until the district court actually approves
it. Cf. Haven Realty Corp. v. Coleman, 455 U.S. 363,
371 n.10, 102 S. Ct. 1114, 1120 n.10 (1982) (holding
App. 20
that a settlement agreement did not moot certain
claims because the agreement was “still subject to the
approval of the District Court”). Indeed, the parties
remain adversaries all throughout the settlement
approval process because until approval, the settlement
is not final, and if the district court rejects the
settlement, the parties would continue their litigation.
See In re Asbestos Litig., 90 F.3d 963, 988 (5th Cir.
1996) (holding Article III’s case-or-controversy
requirement was satisfied, notwithstanding a
settlement, in light of the “the adversarial positions
which the parties occupied before settlement
negotiations and the positions to which they will return
if the settlement is not approved”), vacated on other
grounds, Ortiz v. Fibreboard Corp., 521 U.S. 1114, 117
S. Ct. 2503 (1997) (mem.).
Second, because the district court acts as a fiduciary
for the class, there remains adversity between the class
and the defendant. Rule 23(e) requires the district
court to ensure the settlement is “fair, reasonable, and
adequate.” Fed. R. Civ. P. 23(e)(2). The district court
thus takes on a type of fiduciary role for the class,
NPAS Sols., 975 F.3d at 1253, and works to ensure the
settlement is “noncollusive in nature,” 4 Newberg
§ 13:40; see also Manual for Complex Litigation § 21.61
(“[T]he judge must adopt the role of a skeptical client
and critically examine . . . the proposed settlement
terms[.]”). Our Court directs district judges to exercise
“careful scrutiny” in order to “guard against
settlements that may benefit the class representatives
or their attorneys at the expense of absent class
members.” Holmes v. Cont’l Can Co., 706 F.2d 1144,
1147 (11th Cir. 1983) (quotation marks omitted). Third
App. 21
and finally (and as this case demonstrates), objectors
cause the settlement process to be more adversarial.
While the settling parties may agree about the prospect
of settlement, class action settlements are routinely
subjected to objections that “provide the court an
adversarial presentation of the issues under review,
bringing the decision-making process closer to a
familiar judicial decision.” 4 Newberg § 13:40.
B. Requirements Imposed on the Objectors
Having established jurisdiction, we now turn to the
Objectors’ various challenges to the District Court’s
decisions in this case. After Plaintiffs and Equifax
presented their final settlement agreement to the
District Court, that court ordered notice of the
settlement agreement to be provided to the class, such
that members of the class had the opportunity to optout of the class or object to the settlement. In the order
directing notice to the class, the District Court imposed
a number of administrative requirements on those
class members who wished to object. The District Court
explained that it imposed these requirements because
in a class action case it previously handled, an objector
came in “out of the blue” and created a “really chaotic
process.” It also found that such requirements can help
“expose objections that are lawyer-driven and filed with
ulterior motives.”
Among other things, the District Court required
that each objection include: the objector’s name and
address; the objector’s personal signature; the grounds
for the objection; previous objections in recent class
actions; and dates on which the objector was available
to be deposed. In addition, if the objector had counsel
App. 22
who intended to speak at the fairness hearing, the
objection needed to include the legal and factual basis
for the objection and the evidence to be offered at the
hearing. Finally, if the objector had counsel who sought
compensation from anyone other than the objector, the
objection needed to include counsel’s previous
objections in recent class actions, counsel’s experience
in class action litigation, and information on the fees
sought. Mr. Davis says these administrative
requirements infringed on the objectors’ right to be
heard and to be represented by counsel in their
objections. More to the point, he says that by imposing
these requirements on objectors, including those with
counsel, the District Court limited their right to object
and deterred objections.11
We review a district court’s management of a class
action for abuse of discretion. See Oppenheimer Fund,
Inc. v. Sanders, 437 U.S. 340, 342, 98 S. Ct. 2380, 2385
(1978) (applying abuse of discretion standard to a
district court’s order “concern[ing] the conduct of class
actions” under Rule 23). Rule 23 grants district courts
broad discretion to manage class actions. See Nissan
Motor Corp., 552 F.2d at 1096 (“In the management of
class actions, [Rule] 23 necessarily vests the district
courts with a broad discretion to enable efficacious
administration of the course of proceedings before it.”);
Gulf Oil Co. v. Bernard, 452 U.S. 89, 100, 101 S. Ct.
2193, 2200 (1981) (“Because of the potential for abuse,
11
Mr. Davis also says the requirements allowed the District Court
to reject objections on technical grounds. However, the District
Court considered and rejected all objections on their merits
“whether or not the objections [were] procedurally valid.”
App. 23
a district court has both the duty and the broad
authority to exercise control over a class action and to
enter appropriate orders governing the conduct of
counsel and parties.”). For instance, Rule 23 authorizes
district courts to “prescribe measures to prevent undue
repetition or complication in presenting evidence or
argument,” to “impose conditions on the representative
parties or on intervenors,” and to “deal with similar
procedural matters.” Fed. R. Civ. P. 23(d)(1)(A), (C),
(E). At the same time, district courts’ discretion is “not
unlimited.” Gulf Oil, 452 U.S. at 100, 101 S. Ct. at
2200.
Mr. Davis has failed to show the District Court
abused its discretion here. The District Court explicitly
imposed the requirements outlined here, not to deter
objections or for some arbitrary purpose, but for the
express purpose of avoiding a “chaotic process” in
evaluating the objections. The District Court said it
found these requirements help “expose objections that
are lawyer-driven and filed with ulterior motives.” The
District Court was well within its broad discretion to
impose the requirements for these stated purposes. See
id.; see also, e.g., In re Deepwater Horizon, 739 F.3d
790, 809 (5th Cir. 2014) (requirement imposed on
objector a “legitimate exercise” of court’s discretion to
minimize abuse); Manual for Complex Litigation
§ 21.662 (courts may be “inclined to find [discovery
from objectors] useful to assess the validity of the
objections”); 4 Newberg § 13:33 (“[C]lass counsel may
seek discovery from objectors on issues such as the
App. 24
objectors’ . . . relationships with the professional
objector counsel.”).12
Beyond that, the requirements the District Court
imposed were not particularly burdensome. Most
requirements were clerical in nature, such as simply
providing information. The most potentially
burdensome requirement was being deposed, yet in
many instances that was no more than a possibility.
And of course, depositions are a normal part of
litigation, see Fed. R. Civ. P. 30, including for objectors
to class settlements, see In re Cathode Ray Tube (CRT)
Antitrust Litig., 281 F.R.D. 531, 532, 534 (N.D. Cal.
2012) (ordering objector to sit for deposition regarding
the “bases for his objection” and his “relationship with
‘professional’ or ‘serial’ objector counsel”); see also
Granillo v. FCA US LLC, 2018 WL 4676057, at *7
(D.N.J. Sept. 28, 2018) (“[C]ourts across the country
have approved . . . depositions of objectors who have
voluntarily inserted themselves into [an] action[.]”
(quotation mark omitted)); In re Netflix Privacy Litig.,
12
Mr. Davis notes that a recent amendment to Rule 23 requires
district courts to approve any agreement between an objector and
class counsel in which payment is “provided in connection with” a
decision to forgo or withdraw an objection. See Fed. R. Civ. P.
23(e)(5)(B). In his view, this means objectors no longer bring
meritless objections with the hope of being paid off, and thus the
District Court’s requirements were unnecessary. But Mr. Davis’s
argument assumes the amendment completely eliminated this
type of extortion, which may not be a settled question. See, e.g., In
re Foreign Exch. Benchmark Rates Antitrust Litig., 334 F.R.D. 62,
64 (S.D.N.Y. 2019) (“Approving agreements in these circumstances
would serve only to encourage objectors or their attorneys to
extract this type of payment[.]”). And even if the question is
settled, this District Court did not abuse its discretion when it
imposed the requirements for the other reasons discussed.
App. 25
2013 WL 6173772, at *5 (N.D. Cal. Nov. 25, 2013)
(“[W]hile absent class members are not normally
included in discovery, Objectors have voluntarily
inserted themselves into this action, and as such,
depositions of the Objectors are relevant and
proper.”).13
To be sure, discovery requirements may in some
cases “dissuade class members from exercising their
right to object.” 4 Newberg § 13:33. But here, the
District Court found that any concerns about
requirements deterring objections were “at odds with
the number of objections received” and the fact that
“few objectors had difficulty meeting these criteria.”
Mr. Davis has not shown the District Court erred in
making this finding, especially given that the
requirements were not particularly burdensome.
Of course, district courts must remain mindful that
burdensome requirements could deter objectors from
exercising their right to object while also fulfilling their
obligation to manage class actions. This can be a
difficult task. Whether a district court abuses its
discretion in striking the right balance will invariably
depend on the facts of each case, and the breadth of a
court’s discretion in this regard will tend to ebb and
flow with the size and administrative difficulties of the
class action. With this class of approximately 147
13
There seems to be a dispute about whether all objectors were
subject to depositions or just those that were represented by
counsel. But Mr. Davis, who was not represented by counsel in his
objection, admits that Plaintiffs sought to depose him. Thus, it
appears both represented and non-represented objectors were
subject to depositions.
App. 26
million members, the District Court acted well within
its discretion to impose the requirements it did.
C. Order Certifying
Settlement
Class
and
Approving
At the final hearing, after hearing arguments from
Plaintiffs, Equifax, and various objectors, and after
giving its oral rulings, the District Court directed
Plaintiffs’ counsel to draft a proposed order
“summariz[ing] [the District Court’s] rulings on the
motions and [its] adoption basically of the arguments
that have been made by the Plaintiffs and by Equifax
in the hearing today.” The District Court instructed
Plaintiffs’ counsel to obtain Equifax’s approval before
submitting the proposed order to the court, which it
would then “consider signing.” The District Court acted
pursuant to its local rule, which states, “[u]nless the
Court directs otherwise, all orders . . . orally announced
by the district judge in Court shall be prepared in
writing by the attorney for the prevailing party.” N.D.
Ga. R. 7.3. There is no indication in the record that the
proposed order was ever disclosed to the class or filed
on the docket. In fact, Plaintiffs acknowledge they
emailed the proposed order directly to the District
Court.
Some Objectors challenge this procedure on various
grounds. These challenges include the assertions that:
the District Court erred in adopting a proposed order
“ghostwritten” by Plaintiffs’ counsel; engaged in
impermissible ex parte communications and violated
various rules by failing to disclose the proposed order
to the class; and erred by not including the proposed
order in the appellate record. The Objectors also
App. 27
request that this case be reassigned to a different judge
on remand.14 We consider each of these issues in turn
after addressing one preliminary matter. Specifically,
it is unclear how much of the proposed order—none at
all, only some, or even verbatim—the District Court
adopted. The Objectors ask us to assume that the
District Court adopted the proposed order in full, and
Plaintiffs and Equifax don’t ask us to do otherwise. For
the purposes of our review, we therefore assume the
District Court adopted the proposed order verbatim.
14
Independently, Mr. Frank also argues that the District Court
improperly relied on a declaration filed by Professor Robert
Klonoff, who writes on class actions. Mr. Frank says the
declaration was inadmissible under Federal Rule of Evidence 702
because Professor Klonoff provided a legal opinion. This issue is
ultimately unrelated to the District Court’s decision to adopt a
proposed order, but Mr. Frank raises this issue in passing when
discussing the proposed order issue, so we address it briefly here.
Courts have held that Rule 702 is flexible at the final approval
stage. See, e.g., Int’l Union, United Auto., Aerospace, and Agric.
Implement Workers of Am. v. Gen. Motors Corp., 497 F.3d 615,
636–37 (6th Cir. 2007); see also 4 Newberg § 13:42 (“[T]raditional
rules of evidence do not necessarily apply to the fairness hearing.”).
However, we need not decide whether Rule 702 applies at the final
approval stage because even if Rule 702 applies—and even if
Professor Klonoff’s declaration violated Rule 702—Mr. Frank fails
to show the error was anything other than harmless. See Furcron
v. Mail Ctrs. Plus, LLC, 843 F.3d 1295, 1304 (11th Cir. 2016)
(“[E]ven a clearly erroneous evidentiary ruling will be affirmed if
harmless.”). Although the District Court said Professor Klonoff’s
declaration was “particularly helpful,” it expressly stated its
rulings were “not dependent upon his declaration.”
App. 28
1. Ghostwritten Order
Mr. Frank and Mr. West say the District Court
erred in adopting a proposed order “ghostwritten” by
Plaintiffs’ counsel. This Court has “repeatedly
condemned the ghostwriting of judicial orders by
litigants,” and cases admonishing courts for the
verbatim adoption of such orders are “legion.” In re
Colony Square Co., 819 F.2d 272, 274–75 (11th Cir.
1987). When such a practice is permitted, the drafting
party has an “overwhelming” “temptation to overreach
and exaggerate.” Id. at 275. Beyond that, the “quality
of judicial decisionmaking suffers when a judge
delegates the drafting of orders to a party,” as “the
writing process requires a judge to wrestle with the
difficult issues before him and thereby leads to
stronger, sounder judicial rulings.” Id.15
Even so, as the parties acknowledge, our Court has
not enforced a per se rule prohibiting this practice.
Even though this Court has sharply critiqued the
practice of having the prevailing party author court
orders, we have continued to approve courts’ adoption
of proposed orders, some even verbatim. See, e.g., In re
Dixie Broad., Inc., 871 F.2d 1023, 1029–30 (11th Cir.
1989) (refusing to vacate “ghostwritten” order when
judge told all counsel “in open court” that he asked a
party’s counsel to draft the order, the other parties did
not request the opportunity to review the draft order or
make objections to it, and the parties had ample
15
We note that Northern District of Georgia Rule 7.3 does not
appear to be in keeping with the admonitions of our Court about
this practice.
App. 29
opportunity to argue their case); Colony Square, 819
F.2d at 276–77 (practice “not fundamentally unfair”
because the judge “reached a firm decision” before
asking counsel to draft the proposed order, which the
judge said must reach a particular result and discuss
specific points, and because the losing party “had
ample opportunity to present its arguments”); Fields v.
City of Tarpon Springs, 721 F.2d 318, 320–21 (11th Cir.
1983) (per curiam) (district judge “did not abdicate his
adjudicative role” in the “wholesale adoption of
plaintiff’s proposed order” because the judge “had
command of the legal issues and the evidentiary
proceedings,” “ruled on the scope and manner of the
evidence presented,” and was “an active arbiter of the
dispute”); see also Anderson v. City of Bessemer City,
470 U.S. 564, 572, 105 S. Ct. 1504, 1510–11 (1985)
(noting criticism of “courts for their verbatim adoption
of findings of fact prepared by prevailing parties” yet
stating “that even when the trial judge adopts proposed
findings verbatim, the findings are those of the court”).
Our guiding principle in determining whether to
vacate the adoption of a proposed order is whether “the
process by which the judge arrived at [the order] was
fundamentally unfair.” Colony Square, 819 F.2d at 276.
If a process was fundamentally fair, then the concerns
ordinarily associated with a ghostwritten order are
greatly tempered. Without a per se rule, we determine
whether a process was fundamentally unfair by
evaluating the facts of each case. Also, we glean some
relevant considerations from our precedent, including:
whether the losing party had “ample opportunity” to
present its arguments, id. at 277; see also Dixie Broad.,
871 F.2d at 1030; whether the court independently
App. 30
“reached a firm decision” before requesting a proposed
order, Colony Square, 819 F.2d at 276; see also Fields,
721 F.2d at 320–21; whether the court, in directing a
party to draft the proposed order, instructed that the
order “reach[] a particular result and discuss[] specific
points,” Colony Square, 819 F.2d at 276; whether the
court directed a party to draft the proposed order in
open court or otherwise publicly, Dixie Broad., 871 F.2d
at 1030; whether other parties requested the
opportunity to review the proposed order or make
objections to it, id.; and whether the court “had
command” of the issues and proceedings and was an
“active arbiter” throughout the litigation, Fields, 721
F.2d at 320–21.
Applying these considerations, we conclude the
process by which the District Court adopted the
proposed order was not fundamentally unfair. Mr.
Frank and Mr. West both had ample opportunity to
present their arguments. Both lodged detailed written
objections to the settlement agreement. Both appeared
through counsel at the final hearing and presented
arguments. And contrary to their assertions, they did
have an opportunity to respond to the order. After the
District Court adopted the proposed order, Mr. West
moved to amend it. And it’s not as if these
opportunities to present their arguments were hollow
procedures; the District Court heard from Mr. Frank
and Mr. West at the fairness hearing, considered their
written objections, and rejected their objections on the
merits. Ultimately, the District Court granted Mr.
West’s motion to amend the order over Plaintiffs’
objections and issued a revised order based on West’s
arguments.
App. 31
The District Court reached a firm decision before
ever directing Plaintiffs’ counsel to draft a proposed
order. And the District Court instructed that the order
reach a particular result and discuss specific points:
the court told Plaintiffs’ counsel that the order should
“summarize[] [its] rulings on the motions and [its]
adoption basically of the arguments that have been
made by the Plaintiffs and by Equifax in the hearing
today.”16 It even informed Plaintiffs’ counsel that it
would only “consider signing” the proposed order,
meaning its instruction to prepare a proposed order
was not a blank check. The District Court did all this
in open court for everyone to hear, including the
Objectors, and not one of them objected to the process
nor requested the opportunity to review the proposed
order or make objections to it. There is also no question
the District Court was an active arbiter of this
litigation and had great command of the proceedings.
For instance, the District Court issued a detailed ruling
16
We don’t find it significant that the District Court’s written order
was more detailed than its oral ruling. District courts often provide
a summary ruling from the bench, which is later memorialized in
a longer written order. And in any event, it is ultimately the
District Court’s written order that controls in civil cases. See, e.g.,
Billingsley v. Jefferson County, 953 F.2d 1351, 1354 (11th Cir.
1992) (“[T]he district court’s memorandum opinion constitutes its
findings of facts and conclusions of law,” as the district court was
not bound by its “findings of fact, rulings, or conclusions of law
made during the course of [the] trial.”); Mercantel v. Michael &
Sonja Saltman Family Tr., 993 F.3d 1212, 1239 & n.23 (10th Cir.
2021) (approving ghostwritten summary judgment order, even
though “the final written decision cover[ed] additional issues not
explicitly addressed at the hearing,” because “at least in civil cases,
a court’s written decision generally controls over . . . an earlier oral
ruling”).
App. 32
on Equifax’s motion to dismiss and engaged with the
issues at the fairness hearing. Finally, the fact that the
District Court granted the motion to dismiss in part
and denied it in part, and that it granted Mr. West’s
motion to amend the approval order over Plaintiffs’
objections, shows us the court was not beholden to any
party. Because the process by which the District Court
adopted its order was not fundamentally unfair, we will
not vacate the order.
We caution that courts should not view this decision
as condoning the District Court’s practice. Judicial
ghostwriting remains most unwelcome in this Circuit.
For this reason, and pursuant to our supervisory
power, we strongly urge the District Court to
reconsider the local rule, see N.D. Ga. R. 7.3, that
brought about this problem in the first place. See
Piambino v. Bailey, 757 F.2d 1112, 1145–46 (11th Cir.
1985) (stating this Court has the “power to supervise
the district courts” in a “wide variety of situations,”
including in formulating rules of civil litigation, in
order to “ensure that the judicial process remains a fair
one”).
2. Ex Parte Communications
Mr. Frank and Mr. West next argue there were
impermissible ex parte communications in the District
Court because Plaintiffs’ counsel failed to disclose the
proposed order to the class. They say the ex parte
communications violated Canon 3(A)(4) of the Code of
Conduct for United States Judges and various local
rules.
App. 33
Any ex parte communications were harmless
error.17 See Colony Square, 819 F.2d at 276 (citing
Rushen v. Spain, 464 U.S. 114, 104 S. Ct. 453 (1983))
(noting that ex parte communications can be upheld
when the error is harmless). We reach this conclusion
for four reasons. First, at the Objectors’ request, we
assume the District Court adopted the proposed order
verbatim, so for the purposes of our review the
Objectors are privy to the exact communications they
claim were made ex parte. Second, as discussed above,
the District Court’s process was not fundamentally
unfair, and thus we can affirm its decision
notwithstanding any ex parte communications. See id.
at 276–77. Indeed, it appears that the District Court in
Colony Square engaged in more obvious ex parte
communications than what the Objectors assert here,
and yet this Court held there was no fundamental
unfairness and thus upheld the order at issue there. In
Colony Square, the judge called the prevailing party’s
lawyer after the hearing and asked him to draft the
order. Id. at 274. The lawyer’s firm delivered the draft
order to the judge, and the losing party was not notified
of any ex parte communications. Id. Here, by contrast,
the District Court requested that Plaintiffs’ counsel
draft a proposed order in open court, and no one
objected to the process or requested to see a copy of the
proposed order.
17
Because we hold that any ex parte communications were
harmless error, we need not address whether the communications
violated Canon 3(A)(4) or any local rules.
App. 34
Third, as discussed throughout this opinion, we
identify no errors made by the District Court, so we
cannot say any ex parte communications caused the
court to err in a way that prejudiced the Objectors.18
See United States v. Adams, 785 F.2d 917, 921 (11th
Cir. 1986) (holding ex parte communications were
harmless error when there was no prejudice). Finally,
the record demonstrates that the Objectors had the
opportunity to take up with the judge any problems
they identified. After the District Court issued the
approval order, about which these Objectors complain,
Mr. West moved to amend it. The District Court
granted Mr. West’s motion and issued a revised order
based on his arguments. This too shows a lack of
prejudice and thus, at most, harmless error. See id.
3. Record on Appeal
In the District Court, some of the Objectors moved
for the appellate record to be supplemented with the
proposed order under Federal Rule of Appellate
Procedure 10(e). Relevant here, Rule 10(e) says “[i]f any
difference arises about whether the record truly
discloses what occurred in the district court, the
difference must be submitted to and settled by that
court and the record conformed accordingly.” Fed. R.
App. P. 10(e)(1). In other words, the appellate record
need not be supplemented when the record “truly
18
As addressed later, we must remand this case to the District
Court for it to vacate the incentive awards for the class
representatives based on this Court’s decision in NPAS Solutions,
which postdated the District Court’s order. This of course is not an
error that resulted from any ex parte communications, and thus it
does not amount to prejudice.
App. 35
discloses what occurred in the district court.” Hoover v.
Blue Cross & Blue Shield of Ala., 855 F.2d 1538, 1543
n.5 (11th Cir. 1988) (quotation marks omitted). The
District Court ultimately denied the Objectors’ motion,
finding Rule 10(e) did not apply because “the record
truly discloses what occurred in the district court.”
Mr. Frank and Mr. West challenge this ruling and
take issue with the fact that the proposed order is not
in the record on appeal. They wish to supplement the
record in order to show that the final order was a
verbatim copy of the proposed order. Mr. Davis likewise
says the public has a right to view the proposed order,
primarily to determine whether the District Court
adopted it in full. But in light of our decision to accede
to the Objectors’ request that we assume a verbatim
adoption of the proposed order by the District Court,
there is no need to supplement the record with this
material on appeal. Id. Because we assume the
proposed order (which is not in the record) is identical
to the approval order under review here (which is in
the record), the record on appeal reflects what occurred
in the District Court, at least for purposes of our
review.
4. Reassignment on Remand
In light of the foregoing supposed errors, as well as
some other late-breaking allegations of bias, Mr. Frank
and Mr. West ask us to reassign this case to a different
judge on remand. As discussed below, we must remand
this case to the District Court solely for it to vacate the
incentive awards. We therefore must briefly discuss the
issue of reassignment on remand.
App. 36
To begin, it’s not obvious to us that we have the
authority to reassign this case. This case was assigned
to Chief Judge Thrash by the United States Judicial
Panel on Multidistrict Litigation (the “Panel”). Under
the Panel’s rules, “[i]f for any reason the transferee
judge is unable to continue [its] responsibilities, the
Panel shall make the reassignment of a new transferee
judge.” Rules of Procedure of the United States Judicial
Panel on Multidistrict Litigation, Rule 2.1(e) (emphasis
added); see In re IKO Roofing Shingle Prods. Liab.
Litig., 757 F.3d 599, 600 (7th Cir. 2014) (explaining
that 28 U.S.C. § 1407(b) “gives the Panel exclusive
power to select the judge”).
But we need not decide that question because
reassignment is not justified here. Reassignment is a
“severe remedy,” which is “only appropriate where the
trial judge has engaged in conduct that gives rise to the
appearance of impropriety or a lack of impartiality in
the mind of a reasonable member of the public.”
Comparelli v. Republica Bolivariana de Venezuela, 891
F.3d 1311, 1328 (11th Cir. 2018) (quotation marks
omitted). The Objectors have not shown any actual bias
from Chief Judge Thrash. While they certainly disagree
with his decisions, “judicial rulings alone almost never
constitute a valid basis for a bias or partiality motion.”
Liteky v. United States, 510 U.S. 540, 555, 114 S. Ct.
1147, 1157 (1994).
Without any indication of actual bias, this Court
considers three factors when deciding whether to
reassign a case: “(1) whether the original judge would
have difficulty putting [his] previous views and
findings aside; (2) whether reassignment is appropriate
App. 37
to preserve the appearance of justice; [and] (3) whether
reassignment would entail waste and duplication out of
proportion to gains realized from reassignment.”
Comparelli, 891 F.3d at 1328 (quotation marks
omitted) (quoting United States v. Torkington, 874
F.2d 1441, 1447 (11th Cir. 1989) (per curiam)). No
factor supports reassignment here. As to the first
factor, Chief Judge Thrash would not have difficulty
putting his views aside, as the record indicates he
corrects his mistake and amends his orders when he
thinks he reached the wrong result. For instance, he
revised the approval order after Mr. West moved to
amend. For the second factor, Mr. Frank and Mr. West
have not shown how reassignment is appropriate to
preserve the appearance of justice. Finally, the third
factor clearly weighs against reassignment. This is a
colossal multidistrict litigation case with over 1200
docket entries in the District Court over the course of
just a few years. Reassignment would create enormous
waste and duplication.
In support of reassignment, Mr. Frank and Mr.
West rely heavily on Chudasama v. Mazda Motor
Corp., 123 F.3d 1353 (11th Cir. 1997), in which this
Court reassigned a case on remand in part because of
“the court’s practice of uncritically adopting counsel’s
proposed orders.” Id. at 1373 n.46. Chudasama is far
from on point. For one, as discussed above, the District
Court’s decision to adopt the proposed order at issue
here was not fundamentally unfair. Beyond that, the
Objectors have not established a “practice” by the
District Court of “uncritically adopting” proposed
orders. Id. Finally, this case involves none of the four
App. 38
other considerations that contributed to this Court’s
decision to reassign the case in Chudasama. See id.
D. Settlement Approval
We now turn to the substance of the approval order,
beginning with the District Court’s approval of the
settlement agreement. A class action may be settled
only with court approval, which requires the court to
find the settlement “fair, reasonable, and adequate”
based on a number of factors. Fed. R. Civ. P. 23(e)(2).19
This Court has also instructed district courts to
19
The Rule 23(e)(2) factors include whether:
(A) the class representatives and class counsel have
adequately represented the class;
(B) the proposal was negotiated at arm’s length;
(C) the relief provided for the class is adequate, taking into
account:
(i) the costs, risks, and delay of trial and appeal;
(ii) the effectiveness of any proposed method of
distributing relief to the class, including the method of
processing class-member claims;
(iii) the terms of any proposed award of attorney’s fees,
including timing of payment; and
(iv) any agreement required to be identified under
Rule 23(e)(3); and
(D) the proposal treats class members equitably relative to
each other.
Fed. R. Civ. P. 23(e)(2). The Objectors do not challenge the District
Court’s application of the Rule 23(e)(2) factors, so we do not
address them in depth. Although Mr. Frank says in passing that
Rule 23(e)(2)(D) was not satisfied, he does not press it with any
argument or authority. We therefore treat his argument
abandoned. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d
1324, 1330 (11th Cir. 2004).
App. 39
consider several additional factors called the Bennett
factors. See Bennett, 737 F.2d at 986. The factors
include (1) “the likelihood of success at trial”; (2) “the
range of possible recovery”; (3) “the point on or below
the range of possible recovery at which a settlement is
fair, adequate and reasonable”; (4) “the complexity,
expense and duration of litigation”; (5) “the substance
and amount of opposition to the settlement”; and
(6) “the stage of proceedings at which the settlement
was achieved.” Id. The District Court here considered
the Rule 23(e)(2) factors and the Bennett factors and
found the settlement was “fair, reasonable, and
adequate” and that the settlement’s relief “exceeds the
relief provided in other data breach settlements and . . .
is in the high range of possible recoveries if the case
had successfully been prosecuted through trial.”
We review an order approving a class action
settlement for abuse of discretion. Ault v. Walt Disney
World Co., 692 F.3d 1212, 1216 (11th Cir. 2012). And
because “[d]etermining the fairness of the settlement is
left to the sound discretion of the trial court,” we will
not overturn its decision “absent a clear showing of
abuse of that discretion.” Bennett, 737 F.2d at 986
(emphasis added); see also 4 Newberg § 13:47
(“[A]ppellate courts review the approval decision under
a highly deferential abuse of discretion standard.”).
This degree of deference to a decision approving a
class action settlement makes sense. Settlements
resolve differences and bring parties together for a
common resolution. See Nissan Motor Corp., 552 F.2d
at 1105 (“Settlement agreements are highly favored in
the law and will be upheld whenever possible because
App. 40
they are a means of amicably resolving doubts and
uncertainties and preventing lawsuits.” (quotation
marks omitted)). Settlements also save the bench and
bar time, money, and headaches. See 4 Newberg
§ 13:44 (“The law favors settlement, particularly in
class actions and other complex cases where
substantial resources can be conserved by avoiding
lengthy trials and appeals.”). As such, there is a “strong
judicial policy favoring settlement.” Bennett, 737 F.2d
at 986.
Mr. Cochran challenges this settlement approval
because he says the District Court’s approval order
failed to recognize the “unique risks associated with
stolen Social Security numbers,” which means the
settlement includes inadequate relief to remedy those
risks. From this vantage point, he thinks the District
Court misapplied two of the Bennett factors: “the range
of possible recovery” and “the point on or below the
range of possible recovery at which a settlement is fair,
adequate and reasonable.” Id.
Mr. Cochran has failed to show an abuse of
discretion, as the record clearly demonstrates the
District Court was aware of the unique risks associated
with stolen Social Security numbers. The complaint
alleged, among other things, that “all of the 147.9
million Americans whose information was stolen in the
breach remain subject to a pervasive, substantial and
imminent risk of identity theft and fraud, a risk that
will continue so long as Social Security numbers have
such a critical role in consumers’ financial lives.” In its
order on Equifax’s motion to dismiss, the District Court
acknowledged the data breach involved Social Security
App. 41
numbers and that “[u]sing this information, identity
thieves can create fake identities, fraudulently obtain
loans and tax refunds, and destroy a consumer’s creditworthiness.” And at the fairness hearing for approval
of the settlement, both Plaintiffs’ counsel and an
objector discussed the risks associated with stolen
Social Security numbers. Finally, the District Court’s
approval order expressly highlighted that the
settlement includes a “lengthy period” of credit
monitoring and “identity theft insurance and identity
restoration services—features designed to address
identity theft.” In this way, the approval order
recognized that the settlement includes measures to
redress the very risks Mr. Cochran says the District
Court ignored.
We also reject Mr. Cochran’s view that the District
Court misapplied two of the Bennett factors: “the range
of possible recovery” and “the point on or below the
range of possible recovery at which a settlement is fair,
adequate and reasonable.” Bennett, 737 F.2d at 986.
When considering these factors, the Court found the
settlement was “fair, reasonable, and adequate because
the settlement reflects relief the Court finds is in the
high range of what could have been obtained had the
parties continued to litigate.” Because the District
Court was aware of the risks associated with stolen
Social Security numbers and found that the settlement
includes benefits to redress those risks, there is no
“clear showing” that the District Court abused its
discretion in applying these factors. See id. And while
Mr. Cochran might wish for longer credit monitoring
and identity theft restoration services, such quibbling
with a settlement’s terms is not a part of an abuse of
App. 42
discretion review. See Cotton v. Hinton, 559 F.2d 1326,
1330 (5th Cir. 1977) (trial judge “should be hesitant to
substitute its own judgment for that of counsel”);
Manual for Complex Litigation § 21.61 (“The judge
cannot rewrite the agreement.”); see also Bennett, 737
F.2d at 986 (“[C]ompromise is the essence of
settlement.”).
E. Class Certification
In addition to approving the settlement, the District
Court’s order also certified the class action for
settlement purposes. Rule 23 sets forth a number of
requirements that a class action must meet in order for
a district court to certify the class. First, all four
requirements in Rule 23(a) must be satisfied: (1) the
class must be “so numerous that joinder of all members
is impracticable”; (2) there must be “questions of law or
fact common to the class”; (3) the class representatives’
claims or defenses must be “typical” of the class’s
claims or defenses; and (4) the class representatives
must “fairly and adequately protect the interests of the
class.” Fed. R. Civ. P. 23(a); see Vega v. T-Mobile USA,
Inc., 564 F.3d 1256, 1265 (11th Cir. 2009). These four
requirements are often referred to as the numerosity,
commonality, typicality, and adequacy requirements,
respectively. See Vega, 564 F.3d at 1265.
In addition to meeting these four requirements, a
class action must also satisfy one of the three parts of
Rule 23(b). Fed. R. Civ. P. 23(b); see Vega, 564 F.3d at
1265. The District Court here found that the class
action satisfied Rule 23(b)(3). Rule 23(b)(3) requires
that “questions of law or fact common to class members
predominate over any questions affecting only
App. 43
individual members, and that a class action is superior
to other available methods for fairly and efficiently
adjudicating the controversy.” Fed. R. Civ. P. 23(b)(3).
We review a class certification ruling for abuse of
discretion. See Ault, 692 F.3d at 1216.
Only Mr. Frank challenges the District Court’s class
certification ruling, and he does so only as to the
adequacy requirement.20 We thus focus solely on the
adequacy requirement in Rule 23(a)(4). The adequacy
requirement is that a class representative “must
adequately protect the interests of those he purports to
represent.” Valley Drug Co. v. Geneva Pharms., LLC,
350 F.3d 1181, 1189 (11th Cir. 2003) (quotation marks
omitted). To determine whether the adequacy
requirement is met, we ask: “(1) whether any
substantial conflicts of interest exist between the
representatives and the class; and (2) whether the
representatives will adequately prosecute the action.”
Id. (quotation marks omitted). Mr. Frank’s challenge
concerns only the first question, further narrowing our
focus. According to Mr. Frank, there is a fundamental
conflict of interest between the class representatives
and the class because some class members had state
statutory damages claims while others did not. He says
there should have been subclasses and separate
counsel to address these different types of claims.
20
When discussing Article III standing, Mr. Huang briefly says
Rule 23(b)(3)’s predominance requirement is not met. He does not
press this assertion with any argument, so we consider it
abandoned. See Access Now, 385 F.3d at 1330.
App. 44
Minor differences in the interests of the class
representatives and the class are not enough to defeat
class certification under the adequacy requirement. Id.
Instead, only a “fundamental” conflict “going to the
specific issues in controversy” can defeat class
certification. Id. (quotation marks omitted); see 1
Newberg § 3:58 (“[N]ot every potential distinction . . .
will render the representative inadequate. Only
conflicts that are fundamental to the suit and that go
to the heart of the litigation prevent a plaintiff from
meeting the Rule 23(a)(4) adequacy requirement.”
(footnote omitted)). A conflict is fundamental “where
some party members claim to have been harmed by the
same conduct that benefitted other members of the
class.” Valley Drug, 350 F.3d at 1189. This Court has
also recognized that a class action “cannot be certified
when its members have opposing interests” or “where
the economic interests and objectives of the named
representatives differ significantly from the economic
interests and objectives of unnamed class members.”
Id. at 1189–90 (quotation marks omitted).
Mr. Frank has failed to show the District Court
abused its discretion in certifying the settlement class.
There is no dispute that all these Plaintiffs’ claims
arise out of the same unifying event, Equifax’s data
privacy breach. Likewise, all Plaintiffs seek redress for
the same injury. They all seek compensation for
injuries associated with the risk of identity theft. There
is also no dispute that the data breach harmed all class
members and made none better off. See id. at 1189.
Indeed, the class is expressly limited to the “U.S.
consumers identified by Equifax whose personal
information was compromised.”
App. 45
It is true that some class members had state law
statutory damages claims while others did not, but we
don’t view that difference as a “fundamental” conflict
“going to the specific issues in controversy.” Id. As Mr.
Frank acknowledged at oral argument, only the
District of Columbia and Utah statutory damages
claims are before us on appeal. For one thing, Mr.
Frank’s singular devotion to the D.C. and Utah claims
ignores the fact that all class members had negligence
and negligence per se claims under Georgia law that
united the class. What’s more, Mr. Frank fails to show
that the two statutory damages claims were valuable,
as he demonstrates nothing about how the claims were
a sure bet. In fact, he doesn’t cite a single case in which
a plaintiff recovered statutory damages under either
statute in a data breach case.
Even a brief review of the D.C. and Utah claims
reveals significant barriers to Plaintiffs’ success. While
the D.C. Code authorizes certain damages for a data
breach, this provision wasn’t enacted until 2020, well
after the data breach here occurred in 2017. See
Security Breach Protection Amendment Act of 2020,
D.C. Laws 23-98 (2020). Perhaps Plaintiffs could have
tried to frame the data breach as a violation of D.C.’s
prohibition against certain unfair or deceptive trade
practices, see D.C. Code § 28-3904, but that presents
its own set of issues about proving that a breach by a
third party was an unfair or deceptive trade practice by
Equifax. The Utah claim, in turn, required Plaintiffs to
show Equifax engaged in a “[c]onsumer transaction”
and “knowingly or intentionally” violated an
enumerated prohibition. Utah Code §§ 13-11-3(2), -4(2).
Given that Equifax might not have been in privity with
App. 46
Plaintiffs and that this case arose out of a breach by a
third party, these requirements may well have been
difficult to show. Therefore, to the extent some class
members had D.C. or Utah statutory damages claims
while others did not, there were no opposing or
economic interests that were at odds.
The District Court’s decision aligns with the
reasoned approach adopted by courts in other data
breach cases. For instance, in In re Anthem, Inc. Data
Breach Litigation, 327 F.R.D. 299 (N.D. Cal. 2018), the
District Court found the adequacy requirement
satisfied because all class members had their personal
information compromised in the same data breach and
generally sought the same relief. Id. at 309–11. Beyond
that, the District Court found that even though there
might have been variations in state law, the named
representatives included “individuals from each state”
and the differences in state remedies were not
“sufficiently substantial so as to warrant the creation
of subclasses.” Id. at 310 (quotation marks omitted).
The same reasoning applies here. The class members
all had their personal information compromised in the
same data breach; they seek redress for similar
injuries; and, to the extent some members have
statutory damages under state law and others do not,
there are class representatives from every single state
and, due to litigation risks, the differences in remedies
are not “sufficiently substantial so as to warrant the
creation of subclasses.” Id. (quotation marks omitted);
see also In re Target Corp. Customer Data Sec. Breach
Litig., 2017 WL 2178306, at *6 (D. Minn. May 17, 2017)
(noting the “availability of potential statutory
damages . . . does not, by itself, mean that the interests
App. 47
of these class members are antagonistic to the interests
of class members from other jurisdictions,” particularly
in light of the “substantial barriers to any individual
class member actually recovering statutory damages”).
By contrast, the decisions Mr. Frank relies on, in
which courts held that class actions failed to satisfy the
adequacy requirement, are inapposite. For instance,
Ortiz v. Fibreboard Corp., 527 U.S. 815, 119 S. Ct. 2295
(1999) and Amchem Products, Inc. v. Windsor, 521 U.S.
591, 117 S. Ct. 2231 (1997), addressed two class actions
against asbestos manufacturers, neither of which
involved statutory damages claims. Ortiz, 527 U.S. at
821–22, 119 S. Ct. at 2302–03; Amchem, 521 U.S. at
597, 117 S. Ct. at 2237. The plaintiffs had diametrically
different injuries within each class action. Some
plaintiffs in the classes had already suffered physical
injury as a result of exposure to asbestos, while others
might have been at risk of injury in the future. Ortiz,
527 U.S. at 856, 119 S. Ct. at 2319; Amchem, 521 U.S.
at 602–03, 117 S. Ct. at 2240. This meant some
plaintiffs wanted compensation immediately while
others wanted it in the future. Ortiz, 527 U.S. at 856,
119 S. Ct. at 2320; Amchem, 521 U.S. at 626, 117 S. Ct.
at 2251. Here, by contrast, Plaintiffs alleged that they
face the same risk of identity theft and, among other
things, sought the same compensatory damages for
that injury. Plaintiffs likewise all receive the same
benefits to redress that shared injury. And while Ortiz
was also based on the fact that some plaintiffs had
more valuable claims than others, see Ortiz, 527 U.S.
at 857, 119 S. Ct. at 2320, that’s not the case here. For
the reasons set out above, Mr. Frank has failed to show
App. 48
how the D.C. and Utah statutory damages claims
increased the value of certain Plaintiffs’ cases.
Mr. Frank’s reliance on In re Literary Works in
Electronic Databases Copyright Litigation, 654 F.3d
242 (2d Cir. 2011), even if it was binding on this Court,
is even further off the mark. In Literary Works, there
were three groups of claims (Categories A, B, and C,
which had claims that decreased in value respectively)
involving three different provisions of the Copyright
Act. Id. at 246. The proposed settlement said that if all
claims exceeded a set cap, Category C claims would be
reduced pro rata first, such that those with just
Category C claims might end up with nothing. Id. The
Second Circuit reasoned the adequacy requirement of
Rule 23(a)(4) was not met because Category A and
Category B claims were “more lucrative” than Category
C claims and because the reduction of Category C
claims could “deplete the recovery of Category C-only
plaintiffs in their entirety before the Category A or B
recovery would be affected.” Id. at 252, 254. But here
(putting aside the already addressed issue of the value
of the statutory damages claims), there is no risk that
any members of the class will have their ability to get
settlement benefits reduced to zero because some other
members got more relief from the settlement. Instead,
all class members are entitled to the same class
benefits.
At bottom, this record reflects no fundamental
conflict between the class representatives and the rest
of the class, and thus the adequacy requirement under
Rule 23(a)(4) was satisfied. The District Court
App. 49
therefore did not abuse its discretion in certifying the
class action.21
F. Attorney’s Fee Award
In addition to approving the settlement as fair,
reasonable, and adequate and certifying the class
action for settlement purposes, the District Court also
approved Plaintiffs’ counsel’s request for $77.5 million
in attorney’s fees. See Fed. R. Civ. P. 23(h) (“In a
certified class action, the court may award reasonable
attorney’s fees and nontaxable costs that are
authorized by law or by the parties’ agreement.”).
Relying on our precedent in Camden I Condominium
Association, Inc. v. Dunkle, 946 F.2d 768 (11th Cir.
1991), the District Court applied what’s called the
percentage method. In Camden I, this Court held that
in common fund settlements like this one, an attorney’s
fee award “shall be based upon a reasonable percentage
of the fund established for the benefit of the class.” Id.
at 774. The percentage method requires a district court
21
Mr. Frank also says the District Court erred in finding that
separate subclasses and representation would not benefit the class
as a whole. Related to our conclusion that the District Court did
not abuse its discretion in certifying the settlement class is our
conclusion that the District Court did not err in its separate
finding that subclasses would not benefit the class as a whole. See,
e.g., In re Oil Spill by Oil Rig Deepwater Horizon in Gulf of Mex.,
on Apr. 20, 2010, 910 F. Supp. 2d 891, 918–19 (E.D. La. 2012) (“In
the absence of conflicts between members of the Settlement Class,
subclasses are neither necessary, useful, nor appropriate here. . . .
Such rigid formalism, which would produce enormous obstacles to
negotiating a class settlement with no apparent benefit, is not
required and could even reduce the negotiating leverage of the
class.”).
App. 50
to consider a number of relevant factors called the
Johnson factors in order to determine if the requested
percentage is reasonable. See id. at 772 & n.3, 775
(citing Johnson v. Ga. Highway Express, Inc., 488 F.2d
714 (5th Cir. 1974)).22 The District Court found the
request for $77.5 million in fees was 20.36 percent of
the $380.5 million common settlement fund and found
this percentage was reasonable based on the Johnson
factors. And while noting it was not required to do so,
the District Court also used the “lodestar method” as a
“cross-check on the reasonableness of a percentagebased fee” and found that “the requested fee easily
passes muster if a cross-check is done.”
22
The Johnson factors include 12 factors from the opinion itself:
(1) the time and labor required; (2) the novelty and
difficulty of the questions involved; (3) the skill requisite
to perform the legal service properly; (4) the preclusion of
other employment by the attorney due to acceptance of the
case; (5) the customary fee; (6) whether the fee is fixed or
contingent; (7) time limitations imposed by the client or
the circumstances; (8) the amount involved and the results
obtained; (9) the experience, reputation, and ability of the
attorneys; (10) the “undesirability” of the case; (11) the
nature and the length of the professional relationship with
the client; (12) awards in similar cases.
Camden I, 946 F.2d at 772 & n.3. The Johnson factors also include
a handful of additional factors this Court added in Camden I: “the
time required to reach a settlement, whether there are any
substantial objections by class members or other parties to the
settlement terms or the fees requested by counsel, any nonmonetary benefits conferred upon the class by the settlement, and
the economics involved in prosecuting a class action.” Id. at 775.
The Objectors challenging the District Court’s decision to award
attorney’s fees do not directly challenge its application of the
factors, so we do not undertake a complete review of the factors.
App. 51
Two Objectors, Mr. Davis and Mr. West, challenge
the District Court’s decision. We address their concerns
in turn, reviewing de novo the proper standard for
attorney’s fee awards and reviewing the District
Court’s decision to award attorney’s fees for abuse of
discretion. Loggerhead Turtle v. Cmty. Council of
Volusia Cnty., 307 F.3d 1318, 1322 (11th Cir. 2002).
Mr. Davis makes two arguments. First, he says the
District Court applied the wrong standard and should
have applied the lodestar method,23 not the percentage
method, in determining how much to award in
attorney’s fees. In his view, Camden I’s percentage
method is no longer good law, as he argues the
Supreme Court’s decision in Perdue v. Kenny A. ex rel.
Winn, 559 U.S. 542, 130 S. Ct. 1662 (2010), abrogated
Camden I. Perdue is different, however, because it is a
case in which the Supreme Court applied the lodestar
method to claims made under a fee-shifting statute. Id.
at 546, 130 S. Ct. at 1669. Second, Mr. Davis argues
Camden I and the percentage method are “at odds”
with a handful of other Supreme Court cases that
“essentially” applied the lodestar method.
Mr. Davis’s first argument is foreclosed by our
precedent. It is undisputed that this case involves a
common settlement fund and in NPAS Solutions this
Court expressly held that Camden I is “good law” in
common fund cases and that “Perdue didn’t abrogate
23
Under the lodestar method, a district court determines the
number of hours worked by plaintiffs’ counsel, multiplies those
hours by a reasonable hourly rate, and then adjusts the final
amount upward or downward based on various factors. Camden I,
946 F.2d at 772.
App. 52
Camden I.” 975 F.3d at 1262 n.14; see also In re Home
Depot Inc., 931 F.3d 1065, 1084–85 (11th Cir. 2019)
(“There is no question that the Supreme Court
precedents stretching from Hensley to Perdue are
specific to fee-shifting statutes. . . . Thus, these
precedents are not binding outside of the statutory
context. For this reason, we have held that the
Supreme Court precedent requiring the use of the
lodestar method in statutory fee-shifting cases does not
apply to common-fund cases.”). Indeed, although
Perdue applied the lodestar method, it involved “the
calculation of an attorney’s fee[] under federal feeshifting statutes” and was based on the Supreme
Court’s “prior decisions concerning the federal feeshifting statutes.” 559 U.S. at 546, 552, 130 S. Ct. at
1669, 1672.24 Nothing in Perdue considered the
appropriate method for calculating attorney’s fees in a
common fund case. The percentage method therefore
remains the proper method to apply when awarding
attorney’s fees in common fund settlement cases.
24
That this case at one point included a claim under a fee-shifting
statute (the Fair Credit Reporting Act) is of no consequence. For
one thing, the District Court dismissed that claim before the
parties settled this litigation. Beyond that, the parties’ settlement
involved a common fund settlement, and “[w]here there has been
a settlement, the basis for the statutory fee award has been
discharged, and it is only the fund that remains.” Home Depot, 931
F.3d at 1082 (quotation marks omitted) (quoting Brytus v. Spang
& Co., 203 F.3d 238, 246 (3d Cir. 2000)); see also, e.g., Florin v.
Nationsbank of Ga., N.A., 34 F.3d 560, 563 (7th Cir. 1994) (holding
a fee-shifting statute “do[es] not purport to control fee awards in
cases settled with the creation of a common fund”).
App. 53
Neither are we persuaded by Mr. Davis’s argument
that Camden I and the percentage method are “at
odds” with a handful of Supreme Court cases that
“essentially” applied the lodestar method. The Supreme
Court has never categorically prohibited the percentage
method in common fund cases. See Blum v. Stenson,
465 U.S. 886, 900 n.16, 104 S. Ct. 1541, 1550 n.16
(1984) (noting that for “the calculation of attorney’s
fees under the ‘common fund doctrine’” the “reasonable
fee is based on a percentage of the fund bestowed on
the class”); Goldberger v. Integrated Res., Inc., 209
F.3d 43, 49 (2d Cir. 2000) (noting that Blum “provided
all the impetus needed for a rejuvenation of the
percentage method,” as “Blum indicates that the
percentage-of-the-fund method is a viable” approach to
calculating attorney’s fees in common fund cases
(quotation marks omitted)). To the contrary, and as Mr.
Davis acknowledges, the Supreme Court has applied
the percentage method in common fund cases. Without
a categorical prohibition on the percentage method in
common fund settlement cases, Camden I and the
percentage method remain the law in this Circuit.25
25
Likewise, to the extent Mr. Davis challenges the percentage
awarded here based on percentages awarded in some Supreme
Court cases, he fails to cite a single case in which the Supreme
Court set a categorical ceiling for a reasonable percentage.
App. 54
Mr. West’s arguments also fail.26 According to Mr.
West, the District Court should have considered the
“economies of scale” in this case, which involves a
settlement fund of hundreds of millions of dollars (what
West calls a “megafund” case). As we understand Mr.
West’s position, he thinks a settlement that is ten
times larger than another settlement is often not ten
times harder for the lawyers to work on, such that the
percentage awarded as attorney’s fees should diminish
as the settlement amount gets larger.
As Mr. West admits, our precedent did not require
the District Court to expressly consider the economies
of scale in a megafund case in deciding how much to
award in attorney’s fees. This Court required the
District Court to consider the Johnson factors, and
none of the factors explicitly address the economies of
scale in a megafund case. See Camden I, 946 F.2d at
772 & n.3, 775. That being the case, we cannot say the
District Court erred as a matter of law or abused its
discretion. In any event, the District Court considered
26
One argument we can reject out of hand. Mr. West says the
District Court should have provided Plaintiffs’ counsel’s “lodestar
material” to the class members. Mr. West faults the District Court
for only providing “total hours and lodestar accumulated by the
firms.” While the District Court did conduct a lodestar “cross-check
on the reasonableness of a percentage-based fee,” our precedent did
not require it to do so. See Camden I, 946 F.2d at 774 (“[A]ttorneys’
fees awarded from a common fund shall be based upon a
reasonable percentage of the fund established for the benefit of the
class. The lodestar analysis shall continue to be the applicable
method used for determining statutory fee-shifting awards.”). And
because the District Court was not required to do a lodestar crosscheck, we cannot say it erred in not providing the “lodestar
material” to the class members.
App. 55
the time, labor, and amount involved and the results
obtained when deciding whether the attorney’s fees
were reasonable. We observe that these factors fairly
capture many considerations related to the economies
of scale in a megafund case.
We decline to add an additional factor requiring the
District Court to expressly consider the economies of
scale in a megafund case. See id. at 775 (observing that
the “factors which will impact upon the appropriate
percentage to be awarded as a fee in any particular
case will undoubtedly vary”). For starters, we question
the value of this consideration. Such a factor may
“lack[] rigor because it provides no direction to courts
about when to start decreasing the percentage award,
nor by how much.” 5 Newberg § 15:80. Requiring
consideration of the economies of scale could also create
“perverse incentives,” as it may encourage class counsel
to pursue “quick settlements at sub-optimal levels.” Id.;
see also 5 Newberg § 15:81 (detailing the “rough
justice” of limiting attorney’s fees in megafund cases).
But we need not (and do not) ultimately decide the
virtues (or vices) of such a factor because the District
Court ultimately considered factors that reasonably
capture many considerations related to the economies
of scale in a megafund case.
Finally, to the extent Mr. West challenges the
amount of attorney’s fees awarded in this case, he has
failed to show an abuse of discretion. The District
Court awarded $77.5 million in attorney’s fees, which
it found is 20.36 percent of the $380.5 million
settlement fund. (We note that the $380.5 million
figure does not even account for the additional funds
App. 56
Equifax may be required to pay into the settlement
fund.) 20.36 percent is well within the percentages
permitted in other common fund cases, and even in
other megafund cases.27 See Camden I, 946 F.2d 57 at
774–75 (“The majority of common fund fee awards fall
between 20% to 30% of the fund,” with 25 percent as “a
‘bench mark’ percentage fee award.”); In re Checking
Account Overdraft Litig., 830 F. Supp. 2d 1330, 1367
(S.D. Fla. 2011) (“[C]ourts nationwide have repeatedly
awarded fees of 30 percent or higher in so-called
‘megafund’ settlements.”); Manual for Complex
Litigation § 14.121 (“Attorney fees awarded under the
percentage method are often between 25% and 30% of
the fund.”); see also Wolff v. Cash 4 Titles, 2012 WL
5290155, at *5 (S.D. Fla. Sept. 26, 2012) (average
percentage award in the Eleventh Circuit is “roughly
one-third”); In re Anthem, Inc. Data Breach Litig., 2018
WL 3960068, at *2, *15 (N.D. Cal. Aug. 17, 2018) (data
breach case involving 27 percent award, which
“appears to be in line with the vast majority of
megafund settlements”).28
27
Also, we continue to note that our Circuit does not limit
attorney’s fees in megafund cases as a matter of law.
28
Mr. West says we should view the $77.5 million in attorney’s fees
as 25 percent of a $310 million settlement fund (not $380.5 million)
because that is what Plaintiffs’ counsel initially secured and
agreed to in the original term sheet with Equifax. The additional
$70.5 million of the $380.5 million fund was added after further
negotiations with regulators. But even assuming Plaintiffs’ counsel
did not play a role in securing the additional funds, such that 25
percent really is the operative figure, 25 percent is also well within
percentages approved in other common fund cases. Camden I, 946
F.2d at 775 (25 percent is the “bench mark”). And again, the $310
App. 57
The District Court thus properly applied the
percentage method in this common fund settlement
case, considered the appropriate factors, and did not
abuse its discretion in the amount it awarded in
attorney’s fees.
G. Incentive Awards
After awarding attorney’s fees and expenses to
Plaintiffs’ counsel, the District Court approved
incentive awards (sometimes called service awards) for
the class representatives in order to compensate them
for their services and the risks they incurred on behalf
of the class. The District Court recognized that courts
“routinely approve” such awards, and it found the
awards “deserved” in this case because the class
representatives “devoted substantial time and effort to
this litigation working with their lawyers to prosecute
the claims, assembling the evidence supporting their
claims, and responding to discovery requests.” “But for
their efforts,” the District Court found, “other class
members would be receiving nothing.”
While the parties were briefing this case, a panel of
this Court recognized that incentive awards are
“commonplace in modern class-action litigation,” yet
held that two Supreme Court cases from the 1880s
“prohibit the type of incentive award that the district
court approved here—one that compensates a class
representative for his time and rewards him for
bringing a lawsuit.” NPAS Sols., 975 F.3d at 1260. In
light of NPAS Solutions, Plaintiffs acknowledge that
million figure does not account for the additional funds Equifax
may be called upon to pay into the settlement fund in the future.
App. 58
“service awards are prohibited as a matter of law” in
this Circuit. It is true that NPAS Solutions binds us
here. So the question is how to proceed. Mr. Davis says
the “incentive awards likely compromised Named
Plaintiffs’ representation of the Settlement Class’s
interests” because the class representatives might have
been “tempted to accept [a] suboptimal settlement[]” in
order to obtain the incentive awards.
We reject Mr. Davis’s view that the prospect of
incentive awards infected the entire settlement, so we
decline his invitation to vacate the settlement as a
whole. The record indicates the class representatives’
representation of the class was not affected by the
possibility of receiving incentive awards. The
settlement agreement expressly stated that it remained
in effect even if the District Court declined to approve
the incentive awards. Plaintiffs likewise filed two
separate motions in the District Court: one for approval
of the settlement and certification of the class, and one
for attorney’s fees and expenses and incentive awards
for class representatives. The motion for approval of
the settlement was not contingent on the District Court
approving the incentive awards. Given these facts, the
class representatives’ decision to agree to the
settlement and to seek its approval was not influenced
by the possibility of receiving incentive awards. Cf.
Radcliffe v. Experian Info. Sols. Inc., 715 F.3d 1157,
1164–67 (9th Cir. 2013) (invalidating settlement that
“explicitly condition[ed] the incentive awards on the
class representatives’ support for the settlement”).
Plaintiffs argue that the best approach is to simply
reverse the District Court’s decision approving the
App. 59
incentive awards and remand solely for the limited
purpose of vacating the awards, and we agree. This
approach is administratively feasible, as the settlement
agreement expressly provides that the agreement does
not terminate due to “modification or reversal or appeal
of any decision by the Court[] concerning the amount of
Service Awards.” And this approach makes the most
sense as a matter of judicial economy. Specifically, as
set out above in great detail, the District Court, before
ever approving incentive awards, independently
assessed the proposed settlement and the class and did
not abuse its discretion in finding that the settlement
was fair, reasonable, and adequate and that the class
representatives adequately represented the class. No
purpose would be served by forcing the District Court
to repeat the entire process anew.
To be clear, this is the only issue on which we
reverse the District Court’s decision. On remand, the
District Court is instructed to vacate the incentive
awards and to otherwise leave the settlement
agreement intact. We expect the District Court will be
wary of any attempts to expand this mandate or to
otherwise delay or prevent the settlement from taking
effect, and we encourage that approach.
H. Appeal Bonds
At last, we arrive at the final issue in this case.
After the Objectors appealed the District Court’s
approval order, the court granted Plaintiffs’ motion for
appeal bonds and imposed appeal bonds of $2,000 on
each Objector. The District Court noted that “[c]ourts
routinely require objectors who appeal final approval of
a class action settlement to post a bond to ensure
App. 60
payment of costs on appeal.” The District Court
considered a number of factors and found an appeal
bond of $2,000 was “appropriate.” Mr. Cochran and Mr.
Frank challenge the District Court’s decision to impose
the appeal bonds for a variety of reasons.
Federal Rule of Appellate Procedure 7 states, “[i]n
a civil case, the district court may require an appellant
to file a bond or provide other security in any form and
amount necessary to ensure payment of costs on
appeal.” Fed. R. App. P. 7.29 Mr. Cochran, Mr. Frank,
and Plaintiffs do not cite any cases from this Court
concerning when an appeal bond is permitted under
Rule 7, nor have we found any ourselves. Although our
Court has addressed when attorney’s fees under a feeshifting statute can be included in an appeal bond as
“costs” under Rule 7, those cases don’t deal with the
issue presented here: when a run-of-the-mill appeal
bond is permitted. See Young v. New Process Steel, LP,
419 F.3d 1201, 1207–08 (11th Cir. 2005); Pedraza v.
United Guar. Corp., 313 F.3d 1323, 1333 (11th Cir.
2002). Although we review a district court’s decision to
impose appeal bonds for abuse of discretion, we review
de novo the proper interpretation of federal rules of
procedure, including Rule 7. Young, 419 F.3d at 1203;
see also SEB S.A. v. Sunbeam Corp., 476 F.3d 1317,
1319 (11th Cir. 2007). In interpreting a federal rule, we
examine its text and give effect to its plain meaning.
See Sargeant v. Hall, 951 F.3d 1280, 1283 (11th Cir.
29
Although Plaintiffs moved for appeal bonds under Rules 7 and
8, it appears the District Court imposed them only pursuant to
Rule 7. As such, our discussion of this issue is limited to appeal
bonds imposed under Rule 7.
App. 61
2020) (interpreting the Federal Rules of Civil
Procedure). The plain text of Rule 7 is clear. Again,
Rule 7 says a district court may impose an appeal bond
“in any form and amount necessary to ensure payment
of costs on appeal.” Fed. R. App. P. 7 (emphasis added).
The word “ensure” means “to make sure, certain, or
safe.” Ensure, Merriam-Webster’s Unabridged
Dictionary, https://unabridged.merriam-webster.com/
unabridged/ensure (last visited June 2, 2021).
Therefore, a Rule 7 appeal bond is appropriate when
the bond is imposed to make sure costs on appeal are
paid. See also, e.g., 4 Newberg § 14:15 (risk of
nonpayment is “arguably the only pertinent factor” and
thus “ought to be the primary focus” for appeal bonds);
16A Catherine T. Struve, Federal Practice and
Procedure § 3953 (5th ed. 2021) (“The court should
require a bond only if ‘necessary to ensure payment of
costs on appeal.’”).
The District Court in this case considered several
factors when deciding to impose the appeal bonds:
“(1) the appellant’s financial ability to post a bond;
(2) the merits of the appeal; (3) whether the appellant
has shown any bad faith or vexatious conduct; and
(4) the risk that the appellant will not pay the costs if
the appeal is unsuccessful.” Other courts in this Circuit
have applied similar factors. See, e.g., Aboltin v.
Jeunesse LLC, 2019 WL 1092789, at *3 (M.D. Fla. Feb.
15, 2019). While most of these factors do not appear to
be relevant based on our reading of Rule 7, the last
factor certainly is. Specifically, the District Court
considered “the risk that the appellant will not pay the
costs if the appeal is unsuccessful” and found there was
a “substantial risk that the costs of appeal will not be
App. 62
paid unless a bond is required.” This consideration
squares with Rule 7: if there a risk the appellant will
not pay the costs on appeal, then an appeal bond helps
make sure the costs are paid.
Although the District Court considered other factors
that may not be relevant, we need not ultimately
decide this issue of relevance under Rule 7 because the
record indicates the District Court independently
imposed the appeal bonds based on a proper factor.
Specifically, the District Court found that the
“substantial risk” of nonpayment “warrant[ed] an
appeal bond.” The District Court did not therefore
abuse its discretion when it imposed the appeal bonds
based on its finding that there was a “substantial risk
that the costs of appeal will not be paid unless a bond
is required.” And because we hold that the District
Court did not abuse its discretion in imposing the
appeal bonds on this independent basis, we need not
consider Mr. Cochran’s and Mr. Frank’s arguments,
which challenge the District Court’s ruling to the
extent it was also based on other grounds.30
30
Mr. Cochran appears to briefly challenge the amount of the
appeal bond. Rule 7 simply states that an appeal bond should be
in an “amount necessary to ensure payment of costs on appeal.”
Fed. R. App. P. 7. This means courts should look to 28 U.S.C.
§ 1920 and Federal Rule of Appellate Procedure 39(e), which
provide for taxable costs on appeal, when determining an
appropriate amount to cover “costs on appeal.” See, e.g., Tennille
v. W. Union Co., 774 F.3d 1249, 1257 (10th Cir. 2014) (looking to
section 1920 and Rule 39(e)); see also Federal Practice and
Procedure § 3953 (“Costs on appeal for which a Rule 7 bond can be
required include the costs authorized in [section] 1920 to the
extent those costs relate to the appeal.”); 4 Newberg § 14:16
(“Given that an appeal bond is meant to ensure the availability of
App. 63
III. CONCLUSION
We affirm the District Court’s rulings in their
entirety, except as to the narrow issue of incentive
awards. As discussed, because NPAS Solutions now
prohibits the incentive awards approved for the class
representatives, we must reverse the District Court’s
decision to approve the incentive awards. We remand
this case to the District Court solely for the limited
purpose of vacating those awards. On remand, we
instruct the District Court to leave the rest of the
settlement agreement intact.
AFFIRMED IN PART, REVERSED IN PART,
AND REMANDED.
funds for cost-shifting on appeal, the amount of the bond should
have some relationship to the costs that a losing appellant would
have to shoulder.” (footnote omitted)). The costs under section 1920
and Rule 39(e) include fees of the clerk, fees for printed or
electronically recorded transcripts, fees for printing, costs of
making copies, docket fees, costs of preparing and transmitting the
record, and costs for the reporter’s transcript. See 28 U.S.C.
§ 1920; Fed. R. App. P. 39(e). Here, the District Court found that
$2,000 was “appropriate” to cover the taxable costs listed in section
1920 and Rule 39(e). Mr. Cochran has not shown that this amount
was an abuse of discretion.
App. 64
APPENDIX B
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
MDL Docket No. 2800 No. 1:17-md-2800-TWT
CONSUMER ACTIONS
Chief Judge Thomas W. Thrash, Jr.
[Filed January 13, 2020]
________________________________
In re: Equifax Inc. Customer Data )
Security Breach Litigation
)
)
________________________________ )
ORDER GRANTING FINAL APPROVAL OF
SETTLEMENT, CERTIFYING SETTLEMENT
CLASS, AND AWARDING ATTORNEY’S FEES,
EXPENSES AND SERVICE AWARDS
Consumer Plaintiffs and Defendants Equifax Inc.,
Equifax Information Services, LLC, and Equifax
Consumer Services LLC (collectively, “Equifax”),
reached a proposed class action settlement resolving
claims arising from the data breach Equifax Inc.
announced on September 7, 2017. On July 22, 2019,
this Court directed that notice issue to the settlement
class. [Doc. 742]. This matter is now before the Court
on the Consumer Plaintiffs’ Motion for Final Approval
of Proposed Settlement [Doc. 903] and Motion for
App. 65
Attorneys’ Fees, Expenses, and Service Awards to the
Class Representatives. [Doc. 858]. For the reasons set
forth below and on the record of the hearing of
December 19, 2019, the Court grants both motions,
issues its ruling on the pending objections and motions
from various objectors that have been filed, and will
separately enter a Consent Order relating to the
business practice changes to which Equifax has agreed
and a Final Order and Judgment.
I.
INTRODUCTION.
A. Factual Background and Procedural
History.
On September 7, 2017, Equifax Inc. announced a
data breach that it determined had impacted the
personal information of about 147 million Americans.
More than 300 class actions filed against Equifax were
consolidated and transferred to this Court, which
established separate tracks for the consumer and
financial institution claims and appointed separate
legal teams to lead each track. In the consumer track,
on May 14, 2018, plaintiffs filed a 559-page
consolidated complaint, which named 96 class
representatives and asserted common law and
statutory claims under both state and federal law.
[Doc. 374]. The complaint alleged claims including
negligence, negligence per se, unjust enrichment,
declaratory judgment, breach of contract (for those
individuals who had provided personal information to
Equifax subject to its privacy policy), and violation of
the Fair Credit Reporting Act (“FCRA”), the Georgia
Fair Business Practices Act (“GFBPA”), and various
state consumer laws and state data breach statutes.
App. 66
Equifax moved to dismiss the complaint in its
entirety, arguing inter alia that Georgia law does not
impose a legal duty to safeguard personal information,
plaintiffs’ alleged injuries were not legally cognizable,
and no one could plausibly prove that their injuries
were caused by this data breach as opposed to another
breach. The parties exhaustively briefed the motion
during the summer and early fall of 2018.
After the benefit of oral argument on December 14,
2018, the Court issued an order on January 28, 2019,
granting in part and denying in part the motion to
dismiss. [Doc. 540]. The Court allowed the negligence
and negligence per se claims to proceed under Georgia
law, finding among other things that the plaintiffs
alleged actual injuries sufficient to support a claim for
relief (id. at 15-21). The Court dismissed the FCRA
claim, the GFBPA claim, the contract claims, and the
unjust enrichment claims of those plaintiffs who had no
contract with Equifax. The Court dismissed some state
statutory claims, but allowed many others to proceed.
Following the Court’s order on dismissal, Equifax
answered on February 25, 2019 [Doc. 571]. Before and
after Equifax filed its answer, the parties engaged in
significant discovery efforts and raised numerous
discovery-related disputes with the Court in late 2018.
On April 2, 2019, after more than 18 months of
negotiations, the parties informed the Court they had
reached a binding settlement that was reflected in a
term sheet dated March 30, 2019, and that had been
approved the following day by Equifax’s board of
directors. After consulting and negotiating with federal
and state regulators regarding revisions to the term
App. 67
sheet, the parties entered into the final settlement
agreement on July 19, 2019, and presented the final
settlement agreement to the Court on July 22, 2019.
(App. 1, ¶¶ 17-24).1 After a hearing on July 22, 2019,
the Court entered an order directing notice of the
proposed settlement (“Order Directing Notice”) [Doc.
742]. In the Order Directing Notice, the Court found
that it would likely approve the settlement as fair,
reasonable, and adequate, and certify the settlement
class.
B. Terms of the Settlement.
The following are the material terms of the
settlement:
1. The Settlement Class.
The settlement class is defined as follows:
The approximately 147 million U.S. consumers
identified by Equifax whose personal
information was compromised as a result of the
cyberattack and data breach announced by
Equifax Inc. on September 7, 2017.
Excluded are (i) Equifax, any entity in which Equifax
has a controlling interest, and Equifax’s officers,
directors, legal representatives, successors,
subsidiaries, and assigns; (ii) any judge, justice, or
judicial officer presiding over this matter and the
members of their immediate families and judicial staff;
1
References in this Order to “App.” refer to the declarations
comprising the Appendix [Doc. 900] accompanying the pending
motions.
App. 68
and (iii) any individual who timely and validly opts out
of the settlement class. [Settlement Agreement, Doc.
739-2, ¶ 2.43].
2. The Settlement Fund.
Equifax will pay $380,500,000 into a fund for class
benefits, attorneys’ fees, expenses, service awards, and
notice and administration costs; up to an additional
$125,000,000 if needed to satisfy claims for certain outof-pocket losses; and potentially $2 billion more if all
147 million class members sign up for credit
monitoring. [Doc. 739-2, ¶ 7.8; Doc. 739-4, ¶ 37]. No
settlement funds will revert to Equifax. [Doc. 739-2,
¶ 5.5]. The specific benefits available to class members
include:
• Reimbursement of up to $20,000 for
documented, out-of-pocket losses fairly traceable
to the breach, such as the cost of freezing or
unfreezing a credit file; buying credit monitoring
services; out-of-pocket losses from identity theft
or fraud, including professional fees and other
remedial expenses; and 25 percent of any money
paid to Equifax for credit monitoring or identity
theft protection subscription products in the
year before the breach. If the $380.5 million fund
proves to be insufficient, Equifax will add
another $125 million to pay claims for out-ofpocket losses.
• Compensation of up to 20 hours at $25 per hour
(subject to a $38 million cap) for time spent
taking preventative measures or dealing with
App. 69
identity theft. Ten hours can be self-certified,
requiring no documentation.
• Four years of specially negotiated, three-bureau
credit monitoring and identity protection
services through Experian and an additional six
years of one-bureau credit monitoring and
identity protection services through Equifax.
The Experian monitoring has a comparable
retail value of $24.99 per month and has a
number of features that are typically not
available in “free” credit monitoring services
offered to the public. (App. 6, ¶¶ 33-43). The onebureau credit monitoring shall be provided
separately by Equifax and not paid for from the
settlement fund.
• Alternative cash compensation (subject to a $31
million cap) for class members who already have
credit monitoring or protection services in place
and who choose not to enroll in the enhanced
credit monitoring and identity protection
services offered in the settlement.
• Identity restoration services through Experian
to help class members who believe they may
have been victims of identity theft for seven
years, including access to a U.S. based call
center, assignment of a certified identity theft
restoration specialist, and step by step
assistance in dealing with credit bureaus,
companies and government agencies.
Class members have six months to claim benefits
(through January 22, 2020), but need not file a claim to
App. 70
access identity restoration services. (Id., ¶¶ 7.2 and
8.1.1). If money remains in the fund after the initial
claims period, there will be a four-year extended claims
period during which class members may recover for
certain out-of-pocket losses and time spent rectifying
identity theft that occurs after the end of the initial
claims period. (Id., ¶ 8.1.2). If money remains in the
fund after the extended claims period, it will be used as
follows: (a) the caps for time and alternative
compensation will be lifted and payments will be
increased pro rata up to the full amount of the
approved claims; (b) up to three years of additional
identity restoration services will be purchased; and
(c) the Experian credit monitoring services claimed by
class members will be extended. (Id., ¶ 5.4). Equifax
will not receive any monetary or other financial
consideration for any of the benefits provided by the
settlement. (Id., ¶ 7.3).
3. Injunctive Relief.
Equifax has agreed to entry of a consent order
requiring the company to spend a minimum of $1
billion for data security and related technology over
five years and to comply with comprehensive data
security requirements. Equifax’s compliance will be
audited by an experienced, independent assessor and
subject to this Court’s enforcement powers. [See
generally Doc. 739-2, pp. 76-84; Doc. 739-4, ¶ 44].
According to cybersecurity expert Mary Frantz:
[I]mplementation of the proposed business
practice changes should substantially reduce the
likelihood that Equifax will suffer another data
breach in the future. These changes address
App. 71
serious deficiencies in Equifax’s information
security environment. Had they been in place on
or before 2017 per industry standards, it is
unlikely the Equifax data breach would ever
have been successful. These measures provide a
substantial benefit to the Class Members that
far exceeds what has been achieved in any
similar settlements.
[739-7, ¶ 66]. Equifax’s binding financial commitment
to spend $1 billion on data security and related
technology substantially benefits the class because it
ensures adequate funding for securing plaintiffs’
information long after the case is resolved. (See id.,
¶ 56).
4. Notice And Claims Program.
The notice plan [see Doc. 739-2, p. 125], was
developed by class counsel and the Court-appointed
notice provider (Signal Interactive Media), with input
from the claims administrator (JND Legal
Administration) and the regulators. (App. 1, ¶ 25). The
notice plan is not designed merely to satisfy minimal
constitutional requirements, but an innovative and
comprehensive program that takes advantage of
contemporary commercial and political advertising
techniques—such as focus groups, a public opinion
survey, and micro-targeting—to inform, reach, and
engage the class and motivate class members to file
claims. According to the plaintiffs and Signal, the
notice program is a first-of-its kind effort and is
unprecedented in scope and impact. The Court finds
that the notice program is a significant benefit to the
class.
App. 72
The notice program consists of: (1) multiple emails
sent to those whose email addresses can be found with
reasonable effort; (2) a digital and social media
campaign using messaging continually tested and
targeted for effectiveness; (3) a full-page ad in USA
Today using plain text designed with input from
experts on consumer communications at the Federal
Trade Commission as well as a national radio
advertising campaign to reach those who have limited
online presence; (4) a settlement website on which the
long-form notice and other important documents,
including various pleadings and other filings from the
litigation, are posted; and (5) the ability for class
members to ask questions about the settlement via
email and a toll-free number staffed with live
operators. (App. 4, ¶¶ 43-57, 85-90; App. 5, ¶¶ 22- 30).
Signal will continue digital advertising during the
extended claims period and until identity restoration
services are no longer available, a period that will last
for seven years. [Doc. 739-2, pp. 127, 138].
JND transmitted the initial email notice to
104,815,404 million class members beginning on
August 7, 2019. (App. 4, ¶¶ 53-54). JND later sent a
supplemental email notice to the 91,167,239 class
members who had not yet opted out, filed a claim, or
unsubscribed from the initial email notice. (Id., ¶¶ 5556). The notice plan also provides for JND to perform
two additional supplemental email notice campaigns.
(Id., ¶ 57).
The digital component of the notice plan, according
to Signal, reached 90 percent of the class an average of
eight times before the notice date of September 20,
App. 73
2019, approximately 60 days before the deadline for
objecting and opting out. Signal’s digital campaign
achieved 1.12 billion impressions on social media, paid
search, and advertising before the notice date, far
surpassing the original target of 892 million
impressions. (App. 5, ¶ 24). Signal is expected to
deliver an additional 332 million impressions during
the remainder of the initial claims period (id., ¶ 25),
many more digital impressions than initially
anticipated. Signal also placed a full-page notice that
appeared in the September 6, 2019 issue of USA Today.
(Id., ¶ 26). The radio campaign, which ran from August
19 through September 8, 2019 in 210 markets across
the country, resulted in 194,797,100 impressions
overall and 63,636,800 impressions for the target age
group least likely to be reached online. (Id., ¶¶ 27-28).
Finally, the settlement received a great deal of
media coverage in virtually every U.S. market,
increasing exposure and reach to class members. The
settlement was featured prominently by CNN, in the
New York Times, and on the Today Show, among other
national media outlets. (Id.). From July 22, 2019
through December 1, 2019, there were approximately
30,000 mentions related to the data breach or the
settlement in the media. (Id., ¶ 90).
As a result of the notice program and extensive
media coverage, the response from the class has been
unprecedented. The settlement website received 46
million visits during the first 48 hours following
preliminary approval and, as of December 1, 2019, the
total number of visits to the website exceeded 130
million, with nearly 40 million discrete visitors. Most
App. 74
significantly, with several weeks left in the initial
claims period, the claims administrator has received in
excess of 15 million claims from verified class members,
including over 3.3 million claims for credit monitoring.
(Id., ¶¶ 5, 64-69). The claims rate, to date, thus exceeds
10% of the class.
These claims and others that continue to be filed are
governed by a detailed claims administration protocol,
which employs a variety of techniques to facilitate
access, participation, and claims adjudication and
resolution. (App. 4, ¶¶ 4, 71). JND has also developed
specialized tools to assist in processing claims,
calculating payments, and assisting class members in
curing any deficient claims. (Id., ¶¶ 4, 21). As a result,
class members have the opportunity to file a claim
easily and have that claim adjudicated fairly and
efficiently.
5. Attorneys’ Fees And Expenses And
Service Awards.
Class counsel have applied for a percentage-based
fee of $77.5 million, reimbursement of $1,404,855.35 in
litigation expenses, and service awards of $2,500 for
each settlement class representative totaling no more
than $250,000 in the aggregate. [Doc. 858]. These
amounts are in accordance with the terms of the
settlement agreement and were not negotiated by the
parties until after the negotiations regarding the relief
to be afforded to the class had concluded. Under
prevailing precedent and the circumstances of this
case, these requests are reasonable, and for the reasons
set forth in more detail below, the requests will be
approved.
App. 75
6. Releases.
In pertinent part, the class will release Equifax
from claims that were or could have been asserted in
this case. The releases are set forth in more detail in
the settlement agreement. [Doc. 739-2, ¶¶ 2.38, 2.50,
16].
II.
FINAL APPROVAL OF PROPOSED
SETTLEMENT AND CERTIFICATION OF
SETTLEMENT CLASS.
The Court, having considered the Settlement
Agreement and Release including all of its exhibits
[Doc. 739-2]; all objections and comments received
regarding the settlement; all motions and other court
filings by objectors and amici curiae; the arguments
and authorities presented by the parties and their
counsel in their briefing; the arguments at the final
approval hearing on December 19, 2019; and the record
in this action, and good cause appearing, hereby
reaffirms its findings in the Order Directing Notice,
finds the settlement is fair reasonable and adequate,
and certifies the settlement class.
A. The Proposed Settlement
Reasonable, And Adequate.
Is
Fair,
Before the Court may finally approve a proposed
settlement, it must consider the factors listed in Rule
23(e)(2) including whether “(A) the class
representatives and class counsel have adequately
represented the class; (B) the proposal was negotiated
at arm’s length; (C) the relief provided for the class is
adequate, taking into account: (i) the costs, risks, and
delay of trial and appeal; (ii) the effectiveness of any
App. 76
proposed method of distributing relief to the class,
including the method of processing class-member
claims; (iii) the terms of any proposed award of
attorney’s fees, including timing of payment; and (iv)
any agreement required to be identified under Rule
23(e)(3); and (D) the proposal treats class members
equitably relative to each other.” Fed. R. Civ. P.
23(e)(2). As explained below, consideration of each of
these factors supports a finding that the settlement is
fair, reasonable, and adequate and should be approved.
1. The Class Was Adequately
Represented.
The first prong of Rule 23(e)(2) directs the Court to
consider whether the class representatives and class
counsel have adequately represented the class. Fed. R.
Civ. P. 23(e)(2)(A). Traditionally, adequacy of
representation has been considered in connection with
class certification. For this analysis, courts consider:
“(1) whether [the class representatives] have interests
antagonistic to the interests of other class members;
and (2) whether the proposed class’ counsel has the
necessary qualifications and experience to lead the
litigation.” Columbus Drywall & Insulation, Inc. v.
Masco Corp., 258 F.R.D. 545, 555 (N.D. Ga. 2007).
The Court finds that the class representatives are
adequate. They share the same interests as absent
class members, assert claims stemming from the same
event that are the same or substantially similar to the
rest of the class, and share the same types of alleged
injuries as the rest of the class. Like the rest of the
class, the class representatives’ personal information at
issue was stolen and they all allege the same risk—that
App. 77
their information may be misused by criminals in the
future. And, no class member has benefitted from the
breach. For all these reasons, the Court finds that the
interests of class members are not antagonistic and
there is no intra-class conflict here.
Further, the Court finds that class counsel have
adequately represented the class. The Court appointed
class counsel after a comprehensive and competitive
appointment process. Their experience in complex
litigation generally and data breach litigation
specifically has been brought to bear here, as they
effectively worked to bring this case to a successful
resolution. The Court has observed class counsel’s
diligence, ability, and experience in pleadings and
motion practice; in regularly-conducted status
conferences; in their presentation of the settlement to
this Court; and in their attention to matters of notice
and administration after the announcement of the
settlement. The excellent job class counsel have done
for the class is also demonstrated in the benefits
afforded by the settlement.
2. The Proposed Settlement
Negotiated At Arm’s Length.
Was
With respect to the second factor under Rule
23(e)(2), the Court readily concludes that this
settlement was negotiated at arm’s length, and that
there was no fraud or collusion in reaching the
settlement. Fed. R. Civ. P. 23(e)(2)(B). This Court has
observed the zeal with which counsel for the parties
have advanced their clients’ interests in this case, their
written work, and their oral advocacy at status
conferences and the numerous other hearings that have
App. 78
been conducted. Further, Layn Phillips, a retired
federal judge with a wealth of experience in major
complex litigation and large-scale data breach cases
who served as the settlement mediator, has attested to
the history of the contentious negotiations, the process
of reaching agreement on a binding term sheet, the
level of advocacy on both sides of the case, and his
opinion that the settlement represents a reasonable
and fair outcome. [Doc. 739-9]. See generally Ingram v.
The Coca-Cola Co., 200 F.R.D. 685, 693 (N.D. Ga. 2001)
(presence of “highly experienced mediator” pointed to
“absence of collusion”). Moreover, any possibility of
collusion—already remote—is undercut by the fact that
the settlement enjoys the support of the Federal Trade
Commission, the Consumer Financial Protection
Bureau, and Attorneys General of 48 states, Puerto
Rico, and the District of Columbia. These regulators
entered into their own separate settlements with
Equifax after the parties entered into the term sheet in
this case and agreed that the settlement fund in this
case can serve as the vehicle for consumer redress
related to the breach.
3. The Relief Provided To The Class Is
Adequate.
The third factor the Court considers under Rule
23(e)(2) is the relief provided for the class taking into
account “(i) the costs, risks, and delay of trial and
appeal; (ii) the effectiveness of any proposed method of
distributing relief to the class, including the method of
processing class-member claims; (iii) the terms of any
proposed award of attorney’s fees, including timing of
payment; and (iv) any agreement required to be
App. 79
identified under Rule 23(e)(3).” Fed. R. Civ. P.
23(e)(2)(C).
In examining the adequacy of the relief provided to
the class, the Court starts with the observation that
this settlement is the largest and most comprehensive
recovery in a data breach case in U.S. history by
several orders of magnitude. [Doc. 739-4, pp. 40-45].
Not only does the size of the settlement fund exceed all
previous data breach settlements, but the specific
benefits provided to class members (both monetary and
nonmonetary) that were enumerated above meet or
substantially exceed those that have been obtained in
other data breach cases. (Id.; see also Doc. 739-7, ¶ 66).
It is also particularly significant that all valid claims
for out-of-pocket losses likely will be paid in full; that
3.3 million class members have already submitted
claims for credit monitoring with a collective retail
value of roughly $6 billion; that all class members,
whether or not they file a claim, will have access to
identity restoration services to help deal with the
aftermath of any identity theft for seven years; that the
notice program will continue for the full seven years to
remind class members of the existence of those
extended services; that Equifax must spend at least $1
billion on data security and related technology; and
that Equifax’s compliance with comprehensive data
security measures will be subject to independent
verification and judicial enforcement.
The minimum cost to Equifax of the settlement is
$1.38 billion and could be more, depending on the cost
of complying with the injunctive relief, the number and
amount of valid claims filed for out-of-pocket losses,
App. 80
and the number of class members who sign up for
credit monitoring (as Equifax, not the settlement fund,
will bear the cost if more than seven million class
members sign up for three-bureau credit monitoring
and Equifax, not the settlement fund, will bear the cost
of providing the extended one-bureau credit monitoring
under the settlement). The benefit to the class—even
when only considering the value of the $380.5 million
minimum settlement fund, the minimum $1 billion
Equifax is required to spend on data security and
related technology, and the retail value of the credit
monitoring already claimed by class members—exceeds
$7 billion.
These benefits have added value by being available
now, rather than after years of continued litigation,
because class members can immediately take
advantage of settlement benefits designed to mitigate
and prevent future harm, including credit monitoring
and injunctive relief. See Anthem, 327 F.R.D. at 318
(discussing the importance of timely providing credit
monitoring to the class and implementing security
enhancements in wake of a data breach). Additionally,
the Court finds that much of the relief afforded by the
settlement likely exceeds what could be achieved at
trial (see Doc. 903 at 13-16), and, taken as a whole the
settlement represents a result that is at the high end
of the range of what could be achieved through
continued litigation.
The adequacy of the relief is likewise supported by
consideration of the four subparts enumerated in Rule
23(e)(2)(C)(i-iv), all of which support a finding that the
App. 81
relief provided by the settlement is fair, reasonable,
and adequate.
a) The Risks, Costs, and Delay of
Continued Litigation.
In considering the adequacy of the settlement in
light of the risks of continued litigation under Rule
23(e)(2)(C)(i), the Court finds the cost and delay of
continued litigation would have been substantial. But
for the settlement, the parties would likely incur tens
of millions of dollars in legal fees and expenses in
discovery and motion practice. Trial likely would not
occur earlier than 2021 and appeals would almost
certainly delay a final resolution for a year or more
after that. Moreover, had the case not settled, the
plaintiffs would have faced a high level of risk. See
Anthem, 327 F.R.D. at 322 (finding that the “significant
risks” and the “delay in any potential recovery from
proceeding with litigation,” weighed in favor of
approval). Equifax would likely renew its arguments
under Georgia law that it has no legal duty to
safeguard personal information, arguments that were
strengthened following the Supreme Court of Georgia’s
decisions in Georgia Dep’t of Labor v. McConnell, 828
S.E.2d 352 (Ga. 2019). Class certification outside of the
settlement context also poses a significant challenge.
See, e.g., Adkins v. Facebook, Inc., 2019 WL 7212315, at
*9 (N.D. Cal. Nov. 26, 2019) (denying motion to certify
data breach damages class under Rule 23(b)(3));
Anthem, 327 F.R.D. at 318 (“While there is no obvious
reason to treat certification in a data-breach case
differently than certification in other types of cases, the
dearth of precedent makes continued litigation more
App. 82
risky.”). And, even if plaintiffs prevail on all those legal
issues, they face the risk that causation cannot be
proved, discovery will not support their claims, a jury
might find for Equifax, and an appellate court might
reverse a plaintiffs’ judgment.
Class counsel, appointed to act in the best interests
of the class, cannot afford to ignore or downplay these
significant risks in deciding whether to settle or
continue litigating plaintiffs’ claims. Similarly, the
Court must take those risks into account in
determining whether the proposed settlement is fair,
reasonable, and adequate. In considering these risks,
the Court finds that the guaranteed and immediate
recovery for the class made available by this settlement
far outweighs the mere possibility of future relief after
lengthy and expensive litigation. The reality is that, if
the Court does not approve the settlement in this case,
there is a serious risk that many if not all class
members will receive nothing. That the plaintiffs
achieved all the relief in the settlement in the face of
the risk they face strongly weighs in favor of approving
the settlement as fair, reasonable, and adequate.
b) The Method of Distributing Relief
is Effective.
Rule 23(e)(2)(C)(ii) requires the Court to next
consider the effectiveness of the proposed method to
distribute relief to the class, including the method for
processing claims. Upon review of the declarations
submitted in support of the motion to direct notice and
for final approval [see generally Docs. 739-6 and 9004], the Court finds that the method of distributing
relief is effective. Class members can file claims
App. 83
through a straightforward claims process, and claims
are not required for identity restoration services or to
benefit from the injunctive relief agreed to by Equifax.
Those claiming out-of-pocket losses must supply
documentation of their losses, but such requirements
are routine and likely less stringent than a plaintiff
would have to present during discovery or trial. Some
documentation requirements are necessary to ensure
that the settlement fund is used to pay legitimate
claims. Similarly, the requirement that losses be “fairly
traceable” to the breach is not onerous (and is arguably
a less stringent standard than would apply at trial),
and its enforcement is subject to a claims
administration protocol developed with input from
state and federal regulators. [Doc. 739-2, pp. 286-87,
¶ III].
The Court concludes that the requirements to make
claims for other relief are also reasonable. For example,
any class member is eligible to enroll in credit
monitoring services without any documentation. Class
members seeking alternative compensation in lieu of
credit monitoring do not need to provide any
documentation, but only identify and attest to their
existing credit monitoring service. This is not an
onerous requirement, and even those who already
submitted claims and failed to provide the name of
their credit monitoring service will be given another
chance to do so through the deficient claims process set
forth in the claims administration protocol. And, those
seeking reimbursement for time spent dealing with the
breach can claim up to 10 hours without any
documentation.
App. 84
The claims administrator, JND, is highly
experienced in administering large class action
settlements and judgments, and it has detailed the
efforts it has made in administering the settlement,
facilitating claims, and ensuring those claims are
properly and efficiently handled. (App. 4, ¶¶ 4, 21; see
also Doc. 739-6, ¶¶ 2-10). Among other things, JND has
developed protocols and a database to assist in
processing claims, calculating payments, and assisting
class members in curing any deficient claims. (Id., ¶¶ 4,
21). Additionally, JND has the capacity to handle class
member inquiries and claims of this magnitude. (App.
4, ¶¶ 5, 42). This factor, therefore, supports approving
the relief provided by this settlement.
c) The Terms Relating To Attorneys’
Fees Are Reasonable.
The third consideration of evaluating relief under
Rule 23(e)(2)(C) is whether the attorneys’ fees
requested under the settlement are reasonable. Fed. R.
Civ. P. 23(e)(2)(C)(iii). Here, class counsel are
requesting a fee based on a percentage of the benefits
available to the class. As addressed in detail below, the
Court finds that the request is reasonable under
prevailing precedent and the facts of this case. Further,
the timing of the payment of fees does not impact the
adequacy of the relief, as no fee will be paid until after
Equifax fully funds the settlement fund and under no
circumstance will any of the settlement funds revert to
Equifax. See Fed. R. Civ. P. 23(e)(2)(B)(iii). As such,
this factor weighs in favor of approving the settlement.
App. 85
d) Agreements Required To Be
Identified By Fed. R. Civ. P.
23(e)(3).
Finally, Rule 23(e)(2)(C)(iv) directs the Court to
consider the relief afforded to the class in light of any
agreements required to be identified by Rule 23(e)(3).
The parties previously submitted to the Court, in
camera, the specific terms of the provision allowing
Equifax to terminate the settlement if more than a
certain number of class members opted out and the cap
on notice spending that would create a mutual
termination right. These provisions have not been
triggered, and thus do not affect the adequacy of the
relief obtained here. The parties have not identified,
and the Court is unaware of, any other agreements
required to be identified by the Rule. Therefore, this
element of Rule 23(e)(2)(C) also weighs in favor of
approval.
4. Class
Members
Are
Treated
Equitably Relative To Each Other.
The fourth and final factor under Rule 23(e)(2),
directs the Court to consider whether class members
are treated equitably relative to each other. Fed. R.
Civ. P. 23(e)(2)(D). According to the advisory committee
notes, this factor is closely related to the adequacy
requirement of Rule 23(a). The Court expressly
considers whether the settlement provides equitable
“treatment of some class members vis-à-vis others,”
and an issue that has been raised by some objectors is
whether the settlement apportions “relief among class
members [that] takes appropriate account of
differences among their claims, and whether the scope
App. 86
of the release may affect class members in different
ways.” Adv. Comm. Notes 23(e)(2) (2018).
As an initial matter, the class members all have
similar claims arising from the same event: the Equifax
data breach. And as all class members are eligible to
claim the various benefits provided by the settlement
if they meet the requirements, they all are treated
equitably under the settlement.
While class members who have incurred out-ofpocket losses will be able to recover more relative to
class members who have not, this allocation is fair and
equitable because these class members would have had
the ability to seek greater damages at trial.
Additionally, the settlement provides for an extended
claims period of four years after the initial claims
period, through January 2024. This provides the
opportunity for all class members to make claims for
future out-of-pocket losses resulting from the breach.
All class members, regardless of whether they
incurred out-of-pocket losses, are eligible to claim
credit monitoring. This also treats class members
fairly. “The emphasis on this form of relief is logical
because it is directly responsive to the ongoing injury
resulting from the breach.” Anthem, 327 F.R.D. at 332;
see also App. 6, ¶ 41 (stating that “[t]he features
included in the Experian services are particularly
helpful for consumers concerned about identity theft,
because they are designed to quickly help identify
fraudulent misuse of a consumer’s personal
information”).
App. 87
Moreover, all class members—even those who do
not submit claims—benefit from the various nonmonetary aspects of the settlement, including access to
identity restoration services and the business practice
changes that Equifax will implement at a cost of at
least $1 billion. (See App. 2, ¶ 21). By addressing the
alleged injuries class members suffered and by helping
to mitigate future harm—through the extended claims
period, availability of credit monitoring and identity
restoration services, and mandated business practice
changes—the settlement is equitable to all class
members.
Finally, class members have been treated equitably
despite the fact that they reside in different states and
may have been able to assert different statutory claims
depending on the state in which they reside. All class
members share at least one common claim for
negligence under Georgia law, and as to the statutory
remedies that survived the motion to dismiss, the
Court does not find that those remedies are materially
different such that they render the plan of
apportionment inequitable. Although some statutory
claims may permit a plaintiff to seek statutory
damages, Georgia law permits all class members to
seek nominal damages and there are additional risks
associated with those statutory claims that persuade
the Court they are not materially more beneficial so as
to render the settlement unfair.
This final factor of Rule 23(e)(2) thus supports this
Court’s finding that the settlement is fair, reasonable,
and adequate and should be approved.
App. 88
5. The Bennett Factors Support
Approving The Settlement As Fair,
Reasonable, And Adequate.
In addition to the rule-based factors set forth in
Rule 23, in considering whether to approve the
settlement the Court is further guided by the factors
set forth in Bennett v. Behring Corp., 737 F.2d 982, 986
(11th Cir. 1984). These factors include: (1) the
likelihood of success at trial; (2) the range of possible
recovery; (3) the range of possible recovery at which a
settlement is fair, adequate, and reasonable; (4) the
anticipated complexity, expense, and duration of
litigation; (5) the opposition to the settlement; and
(6) the stage of proceedings at which the settlement
was achieved. Faught v. Am. Home Shield Corp., 668
F.3d 1233, 1240 (11th Cir. 2011). Many of these
considerations overlap those found in Rule 23(e)(2); all
of them support final approval.
As explained above with respect to consideration of
Rule 23(e)(2), the first and fourth Bennett factors
strongly support approving the settlement. The
likelihood of success at trial is uncertain at best.
Equifax would have no doubt renewed its defenses at
the summary judgment stage and the settlement
provides relief that may not have been available had
the case been tried. The case would have been
extraordinarily expensive to litigate going forward and
would have certainly taken years to conclude. Likewise,
consideration of the second and third Bennett factors
support the settlement as fair, reasonable, and
adequate because the settlement reflects relief the
App. 89
Court finds is in the high range of what could have
been obtained had the parties continued to litigate.
The fifth Bennett factor, which examines opposition
to the settlement, likewise supports approval. In the
Court’s view, the class has reacted positively to the
settlement. In contrast to the 15 million claims,
including over 3.3 million claims for credit monitoring
that already have been filed by verified class members,
only 2,770 settlement class members asked to be
excluded from the settlement and only 388 class
members directly objected to the settlement—many in
the wake of incomplete or misleading media coverage,
or at the behest of serial class action objectors, and
often demonstrating a flawed understanding of the
settlement terms. This miniscule number of objectors
in comparison to the class size is entitled to significant
weight in the final approval analysis. See, e.g., Lipuma
v. Am. Express Co., 406 F. Supp. 2d 1298, 1324 (S.D.
Fla. 2005) (“[A] low percentage of objections points to
the reasonableness of a proposed settlement and
supports its approval”); In re Home Depot, Inc.
Customer Data Sec. Breach Litig., 2016 WL 6902351, at
*4 (N.D. Ga. Aug. 23, 2016) (same).
With respect to the sixth Bennett factor, the Court
finds that the case settled at a stage of the proceedings
where class counsel had sufficient knowledge of the law
and facts to fairly weigh the benefits of the settlement
against the potential risk of continued litigation. (See,
e.g., App. 1, ¶¶ 4-15; Doc. 739-4, ¶ 36). In particular,
class counsel conducted a thorough factual and legal
investigation in order to prepare their comprehensive
consolidated amended complaint; exhaustively
App. 90
researched and analyzed the applicable law; reviewed
more than 500,000 pages of documents and voluminous
electronic spreadsheets from Equifax [see generally,
Doc. 900-1, ¶¶ 6- 14; Doc. 739-4, ¶ 17]; consulted with
various experts; had the benefit of substantial informal
discovery, including meetings with Equifax and its
senior employees responsible for data security [Doc.
900-1, ¶ 14; Doc. 739-4, ¶ 23]; and engaged in
confirmatory discovery after the term sheet was
finalized. [Doc. 739-4, ¶ 36]. Thus, the Bennett factors,
like the Rule 23 factors, strongly support approval of
the settlement.
Finally, in evaluating whether the settlement is
fair, reasonable, and adequate, the Court also gives due
weight to the judgment of class counsel. See, e.g.,
Nelson v. Mead Johnson & Johnson Co., 484 F. App’x
429, 434 (11th Cir. 2012) (“Absent fraud, collusion, or
the like, the district court should be hesitant to
substitute its own judgment for that of counsel.”);
Cotton v. Hinton, 559 F.2d 1326, 1330 (5th Cir. 1977).
Class counsel are highly experienced in significant
complex litigation including large and complex data
breach class actions [Doc. 187, pp. 6-7], and they
strongly believe that both the economic and injunctive
relief secured for the class here is extraordinary. [Doc.
739-4, ¶ 60; see also App. 1, ¶ 16]. Also significant is
Judge Phillips’s endorsement of the settlement,
particularly given his experience in mediating largescale data breach cases. [Doc. 739-9, ¶ 13]. Finally, the
fact that nearly all of the applicable state and federal
regulators agreed to the provision of consumer redress
through the settlement fund in this action strongly
demonstrates the fairness of the settlement.
App. 91
In conclusion, the settlement reflects an
outstanding result for the class in a case with a high
level of risk. The relief provided by this
settlement—both monetary and non-monetary—
exceeds the relief provided in other data breach
settlements and the Court finds is in the high range of
possible recoveries if the case had successfully been
prosecuted through trial. Moreover, the settlement
resulted from hard fought, arm’s-length negotiations,
not collusion. The settlement is therefore fair,
reasonable, and adequate under Rule 23 and Eleventh
Circuit precedent.
B. The Court Certifies The Settlement
Class.
The Court must examine whether this proposed
settlement class may be certified under Rule 23(a)’s
prerequisites and under Rule 23(b)(3). Amchem
Products, Inc. v. Windsor, 521 U.S. 591, 613-14 (1997).
The Court previously concluded it was likely to certify
the following settlement class:
The approximately 147 million U.S. consumers
identified by Equifax whose personal
information was compromised as a result of the
cyberattack and data breach announced by
Equifax Inc. on September 7, 2017.
Excluded are (i) Equifax, any entity in which Equifax
has a controlling interest, and Equifax’s officers,
directors, legal representatives, successors,
subsidiaries, and assigns; (ii) any judge, justice, or
judicial officer presiding over this matter and the
members of their immediate families and judicial staff;
App. 92
and (iii) any individual who timely and validly opts out
of the settlement class. As the Court ruled on Equifax’s
motion to dismiss, all of these class members state
claims for negligence and negligence per se under
Georgia law. [Doc. 540, at 9, 29-43]. For the reasons set
forth below, the Court hereby finally certifies, for
settlement purposes only, the settlement class
pursuant to Fed. R. Civ. P. 23.
1. Fed. R. Civ. P. 23(a) Requirements
Are Satisfied.
a) Numerosity:
Rule 23(a)(1) requires that a proposed settlement
class be so numerous that joinder of all class members
is impracticable. Fed. R. Civ. P. 23(a)(1). The
settlement class consists of more than 147 million U.S.
consumers, indisputably rendering individual joinder
impracticable.
b) Commonality:
“Commonality requires the plaintiff to demonstrate
that the class members ‘have suffered the same injury,”
such that “all their claims can productively be litigated
at once.’” Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338,
349-350 (2011); see also Sellers v. Rushmore Loan
Mgmt. Servs., LLC, 941 F.3d 1031, 1039 (11th Cir.
2019) (noting inquiry is far less demanding than Rule
23(b)(3)’s predominance requirement). All members of
the class suffered the same alleged injury, exposure of
their data in the Equifax data breach, stemming from
the same conduct and the same event. The class
members are asserting the same or substantially
similar legal claims. And “[t]he extensiveness and
App. 93
adequacy of [defendants’] security measures lie at the
heart of every claim.” Anthem, 327 F.R.D. at 308. As
the central question in all class members’ claims is
whether Equifax breached its duty of care through its
conduct with regard to their personal information,
common questions are apt to drive the resolution of the
legal issues in the case. Id.
Courts, including this one, have previously
addressed this requirement in the context of data
breach class actions and found it readily satisfied. See,
e.g., Home Depot, 2016 WL 6902351, at *2 (finding that
multiple common issues “all center on [the defendant’s]
conduct, satisfying the commonality requirement.”);
Anthem, 327 F.R.D. at 308 (noting that “the complaint
contains a common contention capable of class-wide
resolution—‘one type of injury allegedly inflicted by one
actor in violation of one legal norm.’”). The same sorts
of common issues are present here, including whether
Equifax had a legal duty to adequately protect class
members’ personal information; whether Equifax
breached that legal duty; and whether Equifax knew or
should have known that class members’ personal
information was vulnerable to attack. See Home Depot,
2016 WL 6902351, at *2. Commonality is satisfied.
c) Typicality:
Rule 23(a)(3) requires that the claims or defenses of
the representative parties be typical of the claims or
defenses of the class. Fed. R. Civ. P. 23(a)(3). This
prong too is readily met in settlements of nationwide
data breach class actions. See Anthem, 327 F.R.D. at
309 (“[I]t is sufficient for typicality if the plaintiff
endured a course of conduct directed against the
App. 94
class.”). Plaintiffs’ claims here arise from the same data
breach and Equifax’s conduct in connection with the
data breach. The claims are also based on the same
overarching legal theory that Equifax failed in its
common-law duty to protect their personal information.
The typicality requirement has been met.
d) Adequacy of Representation:
As noted above, the adequacy requirement is
satisfied here, as the class representatives do not have
any interests antagonistic to other class members, and
the class has been well represented by the appointed
class counsel. The Court finds that the class
representatives have fulfilled their responsibilities on
behalf of the class. There is at least one class
representative from each state, and therefore the
potential interests of class members with various state
law claims have been represented. The Court further
finds no material differences that would render these
class representatives inadequate. Likewise, the Court
further finds that class counsel have prosecuted the
case vigorously and in the best interests of the class,
and they adequately represented each class member.
Again, the Court notes that this prong too has been
readily met in nationwide data breach class action
settlements. See Home Depot, 2016 WL 6902351, at *2.
And multiple courts have found the adequacy
requirement satisfied in nationwide data breach class
action settlements in the face of objections to the
contrary. See Anthem, 327 F.R.D. at 310 (“To the extent
that there are slight distinctions between Settlement
Class Members, the named Plaintiffs are a
representative cross-section of the entire Class.”); see
App. 95
generally In re Target Corp. Customer Data Sec. Breach
Litig., 892 F.3d 968, 974 (8th Cir. 2018) (rejecting
challenge to adequacy due to lack of “future-damages
subclass”). The Court has identified no conflicts among
class members here. And significantly, even the
existence of minor conflicts does not defeat
certification: “the conflict must be a fundamental one
going to the specific issues in controversy.” Valley Drug
Co. v. Geneva Pharm., Inc., 350 F.3d 1181, 1189 (11th
Cir. 2003) (internal quotations and citations omitted).
If any conflict exists among class members or groups of
class members, that conflict certainly is not
fundamental. The Court has no doubt that the class
representatives and class counsel have performed their
duties in the best interests of the class.
2. The Settlement Class Meets the
Requirements of Fed. R. Civ. P.
23(b)(3).
Rule 23(b)(3) requires that “questions of law or fact
common to class members predominate over any
questions affecting only individual members,” and that
class treatment is “superior to other available methods
for fairly and efficiently adjudicating the controversy.”
Id. The matters pertinent to these findings include:
• the class members’ interests in individually
controlling the prosecution or defense of
separate actions;
• the extent and nature of any litigation
concerning the controversy already begun by or
against class members;
App. 96
• the desirability or undesirability of
concentrating the litigation of the claims in the
particular forum; and
• the likely difficulties in managing a class action.
Fed. R. Civ. P. 23(b); see also Vega v. T-Mobile USA,
Inc., 564 F.3d 1256, 1278 (11th Cir. 2009) (“In
determining superiority, courts must consider the four
factors of Rule 23(b)(3).”). One part of the superiority
analysis—manageability—is irrelevant for purposes of
certifying a settlement class. Amchem, 521 U.S. at 620.
a) Predominance:
The predominance requirement “tests whether
proposed classes are sufficiently cohesive to warrant
adjudication by representation.” Id. at 623. “Common
issues of fact and law predominate if they have a direct
impact on every class member’s effort to establish
liability and on every class member’s entitlement to …
relief.” Carriuolo v. Gen. Motors Co., 823 F.3d 977, 985
(11th Cir. 2016).
Here, as set forth above, there are numerous
common questions. These common questions
predominate because all claims arise out of a common
course of conduct by Equifax. The focus on a
defendant’s security measures in a data breach class
action “is the precise type of predominant question that
makes class-wide adjudication worthwhile.” Anthem,
327 F.R.D. at 312.
Even though this is a nationwide class action,
variations in state law will not predominate over the
common questions. The Court previously found that
App. 97
Georgia law applies to the negligence claims of the
entire class. [Doc. 540 at 8-9].2 Further, in the context
of this litigation, the Court is persuaded that the
presence of multiple state consumer protection laws
does not defeat predominance, because “the
idiosyncratic differences between state consumer
protection laws are not sufficiently substantive to
predominate over the shared claims” for purposes of
Rule 23(b)(3). Anthem, 327 F.R.D. at 315. In Anthem,
the court found it noteworthy that “Plaintiffs’ theories
across these consumer-protection statutes are
essentially the same” thereby avoiding any pitfalls of
state law variation. Id. (quoting In re Mex. Money
Transfer Litig., 267 F.3d 743, 747 (7th Cir. 2001)). Here
too, the core allegations are that Equifax failed to
implement and maintain reasonable security and
privacy measures and failed to identify foreseeable
security and privacy risks.
Perhaps the only significant individual issues here
involve damages, but these issues do not predominate
over the common issues in this case. See, e.g., Home
Depot, 2016 WL 6902351, at *2; Anthem, 327 F.R.D. at
311-16; see also Brown v. Electrolux Home Prods., Inc.,
817 F.3d 1225, 1239 (11th Cir. 2016) (individualized
damages generally do not defeat predominance).
Further minimizing any risk of individual damages
2
Even if Georgia law did not apply to the negligence claims of the
entire class, “Plaintiffs’ negligence claims would not get bogged
down in the individualized causation issues that sometimes plague
products-defect cases. … [because] the same actions by a single
actor wrought the same injury on all Settlement Class Members
together.” Anthem, 327 F.R.D. at 314.
App. 98
predominating over common issues, the consolidated
amended complaint seeks nominal damages on behalf
of all class members, which may be available under
Georgia law even where no evidence is given of any
particular amount of loss. See, e.g., Georgia Power Co.
v. Womble, 150 Ga. App. 28, 32 (1979); Land v. Boone,
265 Ga. App. 551, 554 (2004).
b) Superiority:
“The inquiry into whether the class action is the
superior method for a particular case focuses on
increased efficiency.” Agan v. Katzman & Korr, P.A.,
222 F.R.D. 692, 700 (S.D. Fla. 2004) (internal quotation
omitted). “The focus of this analysis is on the relative
advantages of a class action suit over whatever other
forms of litigation might be realistically available to the
plaintiffs.” Sacred Heart Health Sys., Inc. v. Humana
Military Healthcare Servs., Inc., 601 F.3d 1159, 118384 (11th Cir. 2010) (internal quotation omitted). That
a class member may not receive a large award in a
settlement does not scuttle superiority; the opposite
tends to be true. See Dickens v. GC Servs. Ltd. P’ship,
706 F. App’x 529, 538 (11th Cir. 2017) (describing “the
ways in which the high likelihood of a low per-classmember recovery militates in favor of class
adjudication”).
Here, it is inconceivable that the vast majority of
class members would be interested in controlling the
prosecution of their own actions. The cost of doing so,
especially for class members who do not claim out-ofpocket losses, would dwarf even a full recovery at trial.
A major thrust of Equifax’s motion to dismiss was that
the plaintiffs did not suffer any damages, let alone the
App. 99
“relatively paltry potential recoveries” that class
actions serve to vindicate. See Sacred Heart, 601 F.3d
at 1184. Given the technical nature of the facts, the
volume of data and documents at issue, and the
unsettled area of the law, it would not take long for an
individual plaintiff’s case to be hopelessly submerged
financia
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