united states district court northern district of...
TRANSCRIPT
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION RICKY WILLIAMS, on behalf of ) himself and all others similarly situated, ) ) Plaintiff, ) ) v. ) Case No. 3:19-cv-1659-RV-HTC ) GULF COAST PAIN CONSULTANTS, ) LLC D/B/A CLEARWAY PAIN ) CLASS ACTION SOLUTIONS INSTITUTE, ) ) Defendant. )
PLAINTIFF’S UNOPPOSED MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND INCORPORATED
MEMORANDUM OF LAW
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 1 of 32
2
I. INTRODUCTION
On May 20, 2020, the Court granted preliminary approval of the proposed
Settlement Agreement (hereinafter “Settlement”) between the Plaintiff and Gulf
Coast Pain Consultants, d/b/a Clearway Pain Solutions Institute (“Clearway”)
(collectively, the “Parties”) in this case. (Doc. 35.) By that same Order, the Court
adopted the proposed Notice Program. Id. The Parties complied with the Court’s
Order and provided the Class with notification as set forth in the declaration of
Gabriele Guadagno.1 Not a single Settlement Class Member objected to the
Settlement. Plaintiffs now move the Court for final approval of the Settlement and
for certification of the Settlement Class.
II. BACKGROUND
a. The Data Breach
Clearway is a pain management medical practice providing healthcare
services throughout numerous locations in Florida and Alabama. Clearway
maintains an electronic medical records (“EMR”) system for all the patients who
treat with and/or are referred to them along with guarantor information. This data
includes personally identifiable information (“PII”) and/or protected health
information (“PHI), such as names, home and work addresses, home and work
telephone numbers, email addresses, social security numbers, and dates of birth.
1 Declaration attached as Exhibit A.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 2 of 32
3
Plaintiff alleges that, in providing its services, Clearway promised explicitly and
implicitly that it would protect and securely maintain this confidential and highly
sensitive data. Clearway disputes Plaintiff’s allegations.
On or around February 20, 2019, Clearway discovered that its EMR system
had been accessed in an unauthorized manner by a former contractor. It was
determined this person not only accessed the information but committed theft of the
confidential PII and PHI of Clearway’s 31,874 patients and guarantors from the
EMR system (the “Data Incident”). Thereafter, Clearway terminated the third-
party’s access to the EMR system and launched an investigation into the Data
Incident. On or about April 4, 2019, Clearway sent a notification letter to those
people whose information may have been affected by the Data Incident, including
Plaintiff.
b. Procedural History
On June 6, 2019, Plaintiff, individually and on behalf of a putative class, filed
an action against Clearway alleging claims arising from the Data Incident for: (1)
negligence; (2) invasion of privacy; (3) breach of implied contract; (4) unjust
enrichment; (5) breach of fiduciary duty; and (6) breach of confidence (Doc. 1).
On August 19, 2019, the Parties held a Rule 26 meeting. On September 4,
2019, Clearway filed a Motion to Dismiss with Incorporated Memorandum of Law
seeking dismissal of the Complaint (Doc. 21). Plaintiff and Clearway conferred and
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 3 of 32
4
agreed that mediation of the claims before further briefing on Clearway’s Motion to
Dismiss was warranted. Accordingly, the Court granted Plaintiff extensions of time
for the filing of his response to Clearway’s Motion to Dismiss to allow the Parties
to focus their resources and attention towards reaching an early resolution (Docs. 23,
25, and 29).
On September 5, 2019, the Parties exchanged Initial Disclosures. Thereafter,
the Parties engaged in extensive informal, confirmatory discovery and adversarial
arm’s-length negotiations over the following months with a view toward achieving
substantial benefits for the Settlement Class as a whole, while avoiding the cost,
delay and uncertainty of further litigation, trial, and appellate practice. On November
15, 2019, the Court entered the Parties’ stipulated Protective Order (Doc. 27) to
facilitate the Parties’ exchange of confidential, proprietary, and private information
regarding the claims. Plaintiff’s counsel retained experienced cybersecurity experts
to aid in their investigation and evaluation. With the documents from Clearway and
the assistance of experts, Plaintiff’s counsel was able to fully assess the merits of
Plaintiff’s claims and Clearway’s defenses, as well as the material facts regarding
the nature, cause, and effects of the Data Incident.
c. Settlement Negotiations and Preliminary Approval
Plaintiff’s counsel engaged in extensive preparation for fully informed
settlement negotiations. Before meeting in person, the Parties participated in
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 4 of 32
5
numerous pre-mediation meetings and calls and exchanged additional information,
documents, and electronic data. In advance of the meditation, the Parties prepared
detailed mediation statements addressing liability and damages.
On January 28, 2020, the Parties engaged in a full-day mediation with Rodney
Max of Upchurch, Watson, White & Max at his office. Because of the complex
nature of this action, the Parties were not able to reach an agreement on all the key
terms at mediation. However, negotiations continued between the Parties with the
ongoing assistance of the mediator, and the Parties were able to reach an agreement
on all the principal terms of settlement for this matter, subject to final mutual
agreement on all necessary documentation. Thereafter, on March 2, 2020, the Parties
filed a Joint Notice of Settlement notifying the Court of the agreement reached (Doc.
31).
The Parties then drafted the necessary documentation supporting the
Settlement. Counsel for Clearway and the Settlement Class jointly drafted and
executed the Settlement Agreement that memorializes and governs the Settlement.
Thereafter, the Parties moved for and obtained its preliminary approval. (Doc. 35)
III. THE SETTLEMENT
The terms of the Settlement, which this Court preliminarily approved, are set
forth in full in the Settlement Agreement submitted with Plaintiff's Unopposed
Motion for Preliminary Approval of Class Action Settlement and Incorporated
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 5 of 32
6
Memorandum of Law (Doc. 34-1) (“Settlement Agreement” or “Agreement”), and
are briefly summarized below:
a. The Settlement Class
The proposed Settlement Class includes: “All individuals in the United States
whose personally identifiable information and/or protected health information was
affected by the theft of information from Clearway by a former contractor discovered
in or about February 2019.”
“Personally Identifiable Information” and/or “Protected Health Information”
is defined as names, home and work addresses, home and work telephone numbers,
email addresses, social security numbers, dates of birth, chart numbers, health
insurance information and potentially primary care information and employment
information. These terms do not include payment card, such as debit or credit card,
or other financial account information.
b. Settlement Benefits
i. Monetary Relief
Clearway will provide monetary payments to Settlement Class Members who
timely submit valid claims. There are two types of payments that are available:
(1) Ordinary Loss and (2) Extraordinary Loss. Class Members may submit a claim
for either or both types of payments. In order to claim each type of payment,
Settlement Class Members must provide related description(s) and/or
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 6 of 32
7
documentation of their loss(es) with the Claim Form. The Claim Form includes
examples of the types of losses Settlement Class Members may have incurred and
the description and/or documentation needed to support those claims.
Settlement Class Members who timely submit a valid Claim Form may each
receive up to $250.00 for Ordinary Losses and up to $2,500.00 for Extraordinary
Losses, depending on the total amount of valid claims submitted. The total payments
made to all Settlement Class Members under this Settlement Agreement shall not
exceed $300,000.00. In the event the total amount of approved claims exceeds
$300,000.00, the claim of each Settlement Class Member shall be reduced on a pro
rata basis. If suggested by the Court at or prior to the Final Approval Hearing as a
condition for approval of the Settlement, the total payment amount may be waived
or increased, at the sole and absolute discretion of Clearway. However, Plaintiff
anticipates each Settlement Class Member that submits a Claim Form will receive
the full value of their claim submission for Ordinary Losses up to $250.00 and/or
Extraordinary Losses up to $2,500.00, which provides Settlement Class Members
an outstanding result.
1. Ordinary Losses
For Ordinary Losses, Class Members are eligible to receive reimbursement of
up to $250.00 for the following categories of out-of-pocket expenses and lost time
resulting from the Data Incident:
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 7 of 32
8
• Out-of-pocket costs for up to three (3) years of credit monitoring and/or
identity theft protection services, provided that the Class Member
certifies that the monitoring or service costs were purchased primarily
because of the Data Incident, between February 2019 and October 17,
2020 (the Claims Deadline), and with proof of purchase;
• Out-of-pocket co-pays or deductible payments on Medicare, Medicaid
or private insurance due to false medical insurance claims, provided
that the claimant certifies that he or she has not been reimbursed by any
other source for these payments;
• Up to three (3) hours of documented lost time spent dealing with the
Data Incident at the rate of $20.00 per hour, if at least one hour was
spent, provided that the claimant submits documentation or a narrative
explanation plausibly establishing that the time was spent dealing with
issues relating to the Data Incident;
• The costs of credit report(s) purchased by the Class Member between
February 2019 and October 17, 2020, provided that the claimant
certifies the credit report was purchased primarily as a result of the Data
Incident and that he or she has not been reimbursed by any other source
for these payments; and,
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 8 of 32
9
• Other incidental expenses attributable to the Data Incident, including,
by way of example, payments for credit freezes, cost of postage, long-
distance charges, ordering records, or copying, provided that the
claimant submits documentation of the charges and a narrative
explanation plausibly establishing their relationship to the Data
Incident.
The maximum amount any one claimant can recover for Ordinary Losses is
$250.00.
2. Extraordinary Losses
For Extraordinary Losses, Class Members are eligible to receive
reimbursement of up to $2,500.00. Extraordinary Losses include losses associated
with identity theft, medical fraud, tax fraud, other forms of` fraud, and other actual
misuse of personal information, provided that (i) the loss is an actual documented
and unreimbursed monetary loss; (ii) the loss was more likely than not caused by the
Data Incident; (iii) the loss is not already covered by one or more of the
reimbursement categories under Ordinary Losses described above; (iv) the
Settlement Class Member made reasonable efforts to avoid the loss or seek
reimbursement for the loss; and (v) the loss occurred from February 2019 through
October 17, 2020. Claimants who submit qualifying claims under this category may
also seek reimbursement for up to three (3) hours of additional lost time at the rate
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 9 of 32
10
of $20.00 per hour for time spent dealing with issues relating to the identity theft,
fraud, or other misuse, if at least one full hour was spent, provided that the claimant
submits documentation or a narrative explanation plausibly establishing that the lost
time was related to the Data Incident. The maximum amount any one claimant can
recover for Extraordinary Losses is $2,500.00.
3. Injunctive Relief & Data Security Practice Commitments
For a period of at least twenty-four (24) months from the date of execution of
the Settlement Agreement, Clearway agreed to implement and maintain the
following data security measures:
• Handling and Storage of Electronic Protected Health Information (“ePHI”): segregate the management and storage of ePHI from other environments, such as e-mail or Microsoft Office;
• Data Security Policy: implement policy to review all active users to ensure all terminated users’ access are removed upon termination date;
• Access Control: implement dual factor authentication for all active
users; and,
• Cybersecurity Training and Awareness: implement annual phishing training for all active users and further educate employees on cybersecurity.
4. Additional Relief
In addition to the individual monetary relief and injunctive relief, the proposed
Settlement provides the following relief to be paid by Clearway:
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 10 of 32
11
i. Service Award for Settlement Class Representative Plaintiff
Clearway has agreed to, and Class Counsel will apply to the Court for, a
Service Award of up to $2,500.00 to the Plaintiff, as Settlement Class representative,
for his efforts in the litigation and commitment on behalf of the Settlement Class
(“Service Award”). This Service Award is not conditioned on the Plaintiff’s support
of the proposed Settlement. Class Counsel negotiated the amount of the Service
Award to be applied for independently from the other terms of the proposed
Settlement, and the Court should consider the Service Award separately from its
consideration and determination of the fairness, reasonableness, and adequacy of the
proposed Settlement.
ii. Attorney’s Fees and Costs
Plaintiffs’ Counsel are applying separately to the Court for an award of
attorneys’ fees, costs and expenses of $158,877.50. Clearway does not oppose the
request. As with costs of notice and administration, Clearway has agreed to pay any
attorneys’ fees, costs and expenses awarded by the Court entirely separate from the
$300,000 made available for the cost of valid claims by Settlement Class Members.
iii. Costs of Notice and Settlement Administration
Clearway has agreed to pay for Notice and for Settlement Administration,
including the cost of implementing and developing a Notice Program, as well as the
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 11 of 32
12
costs of a Settlement Administrator to disseminate Notice, administer the Settlement,
and evaluate and pay claims.
c. Distribution Plan
Clearway agreed to fund payment of all approved claims for expense
reimbursement and compensation for time spent, and the cost of all approved claims
for the identity theft protection service, up to an aggregate amount of $300,000. This
amount is separate and apart from the costs associated with Clearway’s Data
Security Practice Commitments. In the event the total amount of approved claims
exceeds $300,000.00, the claim of each Settlement Class Member shall be reduced
on a pro rata basis.
Clearway has paid, and will continue to pay, the costs of providing Class
notice and administering the Settlement benefits. The Parties estimated total costs
for settlement administration to be approximately $100,000 at the time the
Settlement Agreement was executed, but the exact cost will not be known to the
Parties until administration is complete. These costs are separate and apart from the
$300,000 made available for monetary benefits under the Settlement Agreement.
i. Notice Provisions
The Court approved the proposed notice plan to reach the proposed Class
Members and appointed KCC Class Action Services, LLC to implement it. The
Declaration of Gabriele Guadagno confirms the Notice efforts taken by KCC.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 12 of 32
13
(Exhibit A). KCC both mailed postcards and emailed (where email address was
available) each Settlement Class Member to effect notice. KCC established a
settlement website at www.GulfCoastSettlement.com and directed Settlement Class
Members to it for further information about the settlement and to file claims.
The deadline set by the Court for Settlement Class Members to file an
objection the Settlement was on July 17, 2020. The deadline set by the Court for
Settlement Class Members to opt out of the Settlement was on August 18, 2020. Out
of nearly 32,000 Settlement Class Members, none filed objections and only fourteen
chose to opt out.
Class members can file claims both electronically and by mail. The deadline
set by the Court for Settlement Class Members to file claims is on October 17, 2020.
IV. THE SETTLEMENT MERITS FINAL APPROVAL
a. Standard Governing Approval
Both “strong judicial policy” and an “overriding public interest favor
settlements.” Meyer v. Citizens and Southern Nat’l Bank, 677 F. Supp. 1196, 1200
(M.D. Ga. 1988) (citations and internal quotations omitted). Settlements are favored
because they “conserve judicial resources by avoiding the expense of a complicated
and protracted litigation process.” In re Motorsports Merchandise Antitrust Litig.,
112 F. Supp. 2d 1329, 1333 (N.D. Ga. 2000). “Determining the fairness of the
settlement is left to the sound discretion of the trial court.” Bennett v. Behring Corp.,
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 13 of 32
14
737 F.2d 982, 986 (11th Cir. 1984). In exercising its discretion, “[t]he court is
entitled to rely on the judgment of the parties in approving the proposal and should
be hesitant to substitute its own judgment for that of counsel.” In re Motorsports,
112 F. Supp. 2d at 1333.
Amended in December 2018, Rule 23(e)(2) of the Federal Rules of Civil
Procedure requires the Court to determine whether a settlement is fair, adequate,
reasonable, and not a product of collusion “by focusing on the primary procedural
considerations and substantive qualities that should always matter to the decision
whether to approve the proposal.” See Fed. R. Civ. P. 23, Advisory Comm. Notes to
2018 Amendments. Specifically, the Court must consider 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 and payment; and,
(iv) any agreement required to be identified under Rule 23(e)(3); and,
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 14 of 32
15
(D) the proposal treats class members equitably relative to each other.
Fed. R. Civ. P. 23(e)(2). Paragraphs (A) and (B) “identify matters that might be
described as ‘procedural’ concerns[,]” whereas Paragraphs (C) and (D) “focus on
what might be called a ‘substantive’ review of the terms of the proposed settlement.”
Fed. R. Civ. P. 23, Advisory Comm. Notes to 2018 Amendments. This framework
tracks the Eleventh Circuit’s traditional approach. See, e.g. Ault v. Walt Disney
World Co., 692 F.3d 1212, 1217 (11th Cir. 2012) (district court must make findings
that settlement “is not the product of collusion” and “that it is fair, reasonable and
adequate”).
Since the amendments, courts in this Circuit have used Rule 23(e)(2) to
complement the traditional Bennett factors to decide whether a settlement is fair,
reasonable, and adequate. See, e.g., Gumm v. Ford, 5:15-CV-41-MTT, 2019 WL
479506, at *4 (M.D. Ga. Jan. 17, 2019) (discussing Bennett factors “[i]n addition
to” new Rule 23(e)(2) standards); Grant v. Ocwen Loan Servicing, LLC,
315CV01376J34PDB, 2019 WL 367648, at *5 (M.D. Fla. Jan. 30, 2019) (applying
Rule 23(e)(2) and Bennett factors in granting final approval). The Bennett 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.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 15 of 32
16
Gumm, 2019 WL 479506, at *4. This Settlement merits approval under any standard.
b. Procedural Considerations
i. The Class Representatives and Class Counsel have adequately represented the Class.
Rule 23(e)(2)(A) addresses whether class representatives and class counsel
have adequately represented the interests of the Settlement Class. Courts have
examined this issue with a “two-part test: (1) whether plaintiffs 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 class representative in this case does not have interests antagonistic from
other Settlement Class Members. His PII and PHI were impacted by the data breach
at Clearway. The proposed representative need not be identical to all class members;
for instance, “[t]he fact that the named plaintiffs may have suffered greater damages
does not indicate that named plaintiffs possess interests antagonistic to other
plaintiffs.” Id.
Further, the class representative fulfilled, and will continue to fulfill, his duty
to the Settlement Class by staying informed of the progress of the litigation, by
providing documentation and information supporting the claims against Clearway,
and by reviewing and approving the Settlement Agreement. See Declaration of
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 16 of 32
17
Jonathan S. Mann (“Mann”) 2, ¶ 23; c.f. Kirkpatrick v. J.C. Bradford & Co., 827 F.2d
718, 728 (11th Cir. 1987) (“[C]lass certification should not be denied … unless
[class representatives’] participation is so minimal that they virtually have abdicated
to their attorneys the conduct of the case”). His participation, coupled with the
experience of his counsel, ensured adequate representation of the absent class
members’ interests.
ii. The Proposed Settlement was Negotiated at Arm’s Length.
Rule 23(e)(2)(B) requires an inquiry into whether the settlement was a result
of arm’s length negotiations. See also In re Motorsports, 112 F. Supp. 2d at 1333
(equating arms’ length negotiations with being “free of fraud or collusion”). “The
conclusion that the parties did not collude in arriving at a settlement involves a
negative analysis: whether there is any reason to believe otherwise.” In re Domestic
Air Transp. Antitrust Litig., 148 F.R.D. 297, 313–14 (N.D. Ga. 1993) (reviewing
history of protracted, often contentious settlement negotiations and finding “no
indicia of fraud or collusion in the negotiation or drafting of the settlements”). In
other words, “[t]here is a presumption of good faith in the negotiation process.”
Wilson v. EverBank, No. 14-CIV-22264, 2016 WL 457011, at *6 (S.D. Fla. Feb. 3,
2016). This presumption is further bolstered when, as here, the parties use an
experienced mediator to help broker a settlement agreement. See Ingram v. The
2 Attached as Exhibit B.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 17 of 32
18
Coca-Cola Co., 200 F.R.D. 685, 693 (N.D. Ga. 2001) (“The fact that the entire
mediation was conducted under the auspices of . . . a highly experienced mediator,
lends further support to the absence of collusion.”).
The parties only mediated with Mr. Rod Max after the exchange of extensive
discovery and information. After an all-day mediation session, there was still no
agreement on all the terms. The parties continued to negotiate through the mediator.
Mr. Max was able to assist in guiding the Parties past their disagreements to a
Settlement Agreement which provides Settlement Class Members with tangible,
substantial benefits, while avoiding the risks and uncertainty associated with
continuing litigation. (Mann ¶ 9.) In sum, the Settlement Agreement was not the
result of collusion or bad faith, and was negotiated at arm’s length between adverse
parties, each with their own clients’ best interests in mind.
c. The Settlement is Fair, Reasonable, and Adequate
i. The Settlement Agreement Provides Substantial Relief to the Class.3
Rule 23(e)(2)(C) requires that the substance of the settlement agreement
provides adequate relief to the class. Id.; cf. In re the Home Depot, Inc., Customer
Data Sec. Breach Litig., 1:14-MD-02583-TWT, 2016 WL 6902351, at *6 (N.D. Ga.
3 This factor has four points of analysis, including the amount, timing, and payment of attorneys’ fees. Class Counsel will address this factor in an application for attorneys’ fees, filed concurrently with this motion.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 18 of 32
19
Aug. 23, 2016) (examining second and third Bennett factors as to whether settlement
falls within the range of possible recoveries and is fair, adequate and reasonable).
“The Court’s role is not to engage in a claim-by-claim, dollar-by-dollar evaluation,
but to evaluate the proposed settlement in its totality.” Lipuma v. Am. Express Co.,
406 F. Supp. 2d 1298, 1323 (S.D. Fla. Dec. 20, 2005).
The relief provided here compares favorably with those of other settlements
in data breach class actions. See generally In re the Home Depot, 2016 WL 6902351,
at *5. For instance, the Target data breach compromised the personal information of
“nearly 100 million American consumers.” In re Target Corp. Customer Data Sec.
Breach Litig., MDL 14-2522 (PAM), 2017 WL 2178306, at *1 (D. Minn. May 17,
2017), aff’d, 892 F.3d 968 (8th Cir. 2018). There, Target agreed to pay a fund of $10
million to, among other things, reimburse consumers for all of their documented
losses up to $10,000. Id. The district court reasoned that “[a]ll class members’ fears
of future harm are remedied both by the compensation available for purchase of
credit-monitoring/identity-theft protection and by the steps Target agreed to take to
secure its customers’ data in the future.” See also In re Heartland Payment Sys., Inc.
Customer Data Security Breach Litig., 851 F. Supp. 2d 1040, 1048-1069 (S.D. Tex.
2012) (approving settlement that provided up to $2.4 million to pay for out-of-pocket
losses but no monitoring services); Bray v. GameStop Corp., No. 1:17-cv-01365-JEJ
(D. Del.), Mot. for Preliminary Approval (ECF No. 41, at 3) (discussing
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 19 of 32
20
confirmatory discovery taken to verify post-breach security measures) (final
approval granted on December 19, 2018) (ECF No. 54).
Additionally, the Wendy’s data breach settlement provides a useful
comparison. See generally Jackson et. al. v. Wendy’s International, LLC, No. 6:16-
cv-21-PGB-DCI (M.D. Fl.) (ECF No. 157) (final approval granted Feb. 26, 2019).
In that settlement, Wendy’s agreed to pay up to $3.4 million to settle claims,
including reimbursement for documented losses up to $5,000. Id., Mot. for Final
Approval (ECF No. 152). Similar to the present settlement, Wendy’s provided
compensation for time spent dealing with the impacts of the breach, up to five hours,
at $15 per hour, with supporting documentation and up to two hours at $15 per hour
for self-certification of time. Id.
Bolstering the conclusion of fairness and reasonableness is the fact that no
Settlement Class Members objected to the Settlement. See Hamilton v. SunTrust
Mortg. Inc., No. 13-60749, 2014 WL 5419507, at *4 (S.D. Fla. Oct. 24, 2014)
(absence of objections and opt-outs reflects “overwhelming support for the
settlement and evidence of its reasonableness and fairness”); see also George v.
Acad. Mortgage Corp. (UT), 1:16-CV-00471-CAP, 2019 WL 1324023, at *10 (N.D.
Ga. Mar. 20, 2019) (“The lack of opposition to the Settlement clearly supports final
approval.”).
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 20 of 32
21
1. Continued litigation would be complex, expensive, and lengthy, and the benefits outweigh the uncertainty of success at trial.
Courts must weigh the costs, risks, and delay of trial and appeal against the
certainty and immediacy of relief afforded by settlement. Fed. R. Civ. P.
23(e)(2)(C)(i); see also Home Depot, 2016 WL 6902351, at *5 (balancing settlement
benefits against risks inherent in data breach class actions).
Although Plaintiffs are confident in the merits of their claims, the risks
involved in prosecuting a class action through trial cannot be disregarded. Clearway
denies any liability for Plaintiff’s claims. Clearway had a pending Motion to
Dismiss. There is risk the Motion would have been granted, and if not, surely
Clearway would continue to deny any liability for Plaintiff’s claims, likely raising
its arguments again with a request for summary judgment.
Beyond the merits, class certification is challenging in any case. There is a
paucity of data breach cases where certification of a consumer class outside the
settlement context has been granted. See, e.g., In re Hannaford Bros. Co. Customer
Data Security Breach Litig., 293 F.R.D. 21, 33 (D. Me. 2013). Throughout, Plaintiffs
would need to engage in substantial additional fact and expert discovery, and
Plaintiffs would need to combat additional dispositive motions before trial. Even
supposing Plaintiffs achieved certification with their claims intact, “the trial process
is always fraught with uncertainty.” Home Depot, Inc., 2016 WL 6902351, at *5
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 21 of 32
22
(quoting In re Motorsports, 112 F. Supp. 2d at 1334). And any successful trial would
inevitably require a significant investment of time and resources on appeal, all
without the guarantee of any relief.
A “[s]ettlement [that] will alleviate the need for judicial exploration of . . .
complex subjects, reduce litigation costs, and eliminate the significant risk that
individual claimants might recover nothing” merits approval. Lipuma, 406 F. Supp.
2d at 1324. Such is the case here, as the Settlement provides the Settlement Class
Members with guaranteed and immediate recovery, weighing in favor of final
approval. See Columbus Drywall, 258 F.R.D. at 559-560 (“Plaintiffs [would] not
have any guarantee that they will receive a larger recovery from the Settling
Defendants were they to forego the settlement offer”).
Plaintiffs were also at a stage in the litigation where they could effectively
weigh the benefits of the Settlement against the risks of continued litigation. See
Lipuma, 406 F. Supp. 2d at 1324 (noting this Bennett factor “ensure[s] that Plaintiffs
had access to sufficient information to adequately evaluate the merits of the case and
weigh the benefits of settlement against further litigation.”). Before filing the
Complaint, Plaintiff’s Counsel devoted significant time to investigate the facts
related to the Data Incident and to research possible claims. After filing the
Complaint, the Parties had engaged in extensive confirmatory discovery. At the time
of settlement, the Parties had exchanged confidential information and documents,
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 22 of 32
23
allowing Plaintiff’s Counsel to be fully aware of the extent of the breach and possible
damages of the class. This work, combined with their experience in successfully
prosecuting similar data breach cases, gave Plaintiff’s Counsel the opportunity to
sufficiently evaluate the merits of the case and weigh the potential relief. See Id.
(“Certainly, courts favor early settlement… [V]ast formal discovery need not be
taken[.] we have often seen cases which were ‘over discovered.’”).
2. The Proposed Method of Processing Claims and Distributing Relief is Effective.
Rule 23(e)(2)(C)(ii) requires a showing of the effectiveness of the proposed
method of distributing relief to the class (i.e., the Settlement’s “allocation” or
“distribution”), including the method of processing individual claims (i.e., the claims
process). Id.
With respect to the distribution plan, each Settlement Class Member is eligible
to receive reimbursement for ordinary losses up to $250.00 for expenses incurred as
a result of and time spent remedying the impacts of the breach. Additionally,
Settlement Class Members may recover up to $2,500.00 for extraordinary losses that
include losses associated with identity theft, medical fraud, tax fraud, other forms
of` fraud, and other actual misuse of personal information. Should the claims exceed
the $300,000 Clearway has agreed to make available (which the Parties do not
anticipate), eligible claims would be reduced on a pro rata basis. (Settlement Agt. ¶
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 23 of 32
24
3.3). Thus, the distribution plan ensures that all Settlement Class Members will be
compensated for their injuries from the breach and receive protection going forward.
Next, the claims process “provides an effective method of implementing that
plan by ensuring that the claimant provides sufficient information to calculate the
recognized loss amount.” Hefler v. Wells Fargo & Co., 16-CV-05479-JST, 2018 WL
6619983, at *7 (N.D. Cal. Dec. 18, 2018), appeal docketed (9th Cir. Jan. 28, 2019).
To ensure a professional, user-friendly process, the Parties retained KCC, an
industry leader in class administration. Each claimant must provide information
sufficient for KCC to confirm that the claimant is eligible to be reimbursed for
Ordinary or Extraordinary Losses. Claimants who suffered out-of-pocket losses
must documentation to substantiate those losses. Any claimant submitting
insufficient claims will receive a request for additional information, along with
instructions on how to cure the deficiency. These are fair procedures to ensure that
claims are legitimate while not being so onerous as to become a detailed audit for
claimants. As a result, Clearway estimated total costs for settlement administration
will be approximately $100,000, a significant investment for the benefit of the Class.
(SA ¶ 4.1). This factor weighs in favor of approval.
3. There are no agreements required to be identified under Rule 23(e)(3).
The Parties have not entered into any agreements required to be identified
under Rule 23(e)(3). This factor weighs in favor of approval. See Hale v. State Farm
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 24 of 32
25
Mut. Auto. Ins. Co., No. 12-0660-DRH, 2018 WL 6606079, at *5 (Dec. 16, 2018),
appeal docketed (7th Cir. Jan. 14, 2019).
ii. The Settlement treats class members equitably relative to each other.
Rule 23(e)(2)(D) considers whether a settlement treats class members
equitably relative to each other. A court may consider whether “the apportionment
of relief among class members takes appropriate account of differences of their
claims, and whether the scope of the release may affect class members in different
ways that bear on the apportionment of relief.” Fed. R. Civ. P. 23, Advisory Comm.
Notes to 2018 Amendments. Differences in the amount of relief each class member
is entitled to are permissible, provided the relief itself is allocated “commensurate to
the value of [each class member’s] respective claims.” Swinton v. SquareTrade, Inc.,
Case No. 4:18-cv-00144-SMR-SBJ, 2019 WL 617791, at *8 (S.D. Iowa Feb. 14,
2019). This factor weighs in favor of approval because the only substantive
difference in relief among Settlement Class Members relates to the amount of out-
of-pocket damages each suffered, and the time spent remedying the effects of the
breach. Those class members who suffered more are compensated more. Since each
class member is compensated proportionally to his or her loss, this factor too
supports final approval.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 25 of 32
26
d. The Court Should Confirm Certification of the Settlement Class.
Plaintiffs request that the Court confirm the certification of the Settlement
Class pursuant to Rule 23. When “[c]onfronted with a request for settlement-only
class certification, a district court need not inquire whether the case, if tried, would
present intractable management problems . . . for the proposal is that there be no
trial,” but the Court still must ensure satisfaction with other Rule 23 requirements.
Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 620 (1997). The Settlement Class
satisfies each of the requirements of Rule 23(a) (numerosity, commonality,
typicality, and adequacy of representation) and Rule 23(b)(3) (predominance and
superiority).
i. Each Criteria for Class Certification under Rule 23(a) is Satisfied.
1. Numerosity
Rule 23(a)(1) requires that a proposed class be “so numerous that joinder of
all class members is impracticable.” Fed. R. Civ. P. 23(a)(1). Plaintiffs “need only
show that it would be extremely difficult or inconvenient to join all members of the
class,” not “that joinder is impossible.” Columbus Drywall, 258 F.R.D. at 554.
Further, courts require only that plaintiffs provide “some evidence of the number of
members in the purported class, or at least a reasonable estimate of that number.”
Leszczynski v. Allianz Insurance, 176 F.R.D. 659, 669 (S.D. Fla. 1997). Through
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 26 of 32
27
discovery, Plaintiffs learned that the Settlement Class consists of nearly 32,000
Clearway patients whose PII and PHI may have been exposed. Numerosity for
purposes of a certifying a class for settlement is easily satisfied here.
2. Commonality
Rule 23(a)(2) requires that there be “questions of law or fact common to the
class.” “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).
“[C]ommonality requires ‘that there be at least one issue whose resolution will affect
all or a significant number of the putative class members.’” Williams v. Mohawk
Industries, Inc., 568 F.3d 1350, 1355 (11th Cir. 2009) (quoting Stewart v. Winter,
669 F.2d 328, 335 (5th Cir.1982)). Thus, the commonality element is generally
satisfied where, as here “a plaintiff alleges that defendants have engaged in a
standardized course of conduct that affects all class members.” Terrill v. Electrolux
Home Products, Inc., 295 F.R.D. 671, 685 (S.D. Ga. 2013) (internal quotations
omitted).
Like other data breach cases, this case has a number of common questions of
law and fact, including: (1) whether Clearway failed to adequately protect Settlement
Class Members’ PII and PHI; (2) whether Clearway had a legal duty to adequately
protect Settlement Class Members’ PII and PHI; (4) whether Clearway breached that
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 27 of 32
28
legal duty; and (5) whether Clearway knew or should have known that its EMR
system was vulnerable to unauthorized access. “These common issues all center on
[Clearway] conduct, satisfying the commonality requirement.” Home Depot, 2016
WL 6902351, at *2.
3. 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.” This requirement is readily
satisfied in data breach cases such as this one. Plaintiff’s claims are typical of those
of the Settlement Class because they arise from the same Data Incident, and because
they are also based on the same legal theory that Clearway failed to protect PII and
PHI. See Home Depot, 2016 WL 6902351, at *2.
4. Adequacy of Representation
Co-Lead Counsel Bryan F. Aylstock is a founding partner at Aylstock,
Witkin, Kreis & Overholtz, PLLC, and has represented plaintiffs in numerous other
class action cases. (Mann ¶ 5.) He is currently serving as lead counsel in MDL No.
2855, In re 3M Combat Arms Earplug Products Liability Litigation, and has served
as one of three Coordinating Co-Lead counsel charged with overseeing five separate
Multi-District Litigations. Co-Lead Counsel Jonathan S. Mann is a shareholder at
Pittman, Dutton & Hellums, P.C. (“PDH”) where he concentrates his practice in the
areas of class action, mass tort, and product liability litigation. (Mann ¶ 4.) Jon has
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 28 of 32
29
represented plaintiffs in numerous other class actions, including other data breach
lawsuits. (Id.) He has also served as lead or co-lead counsel in many other complex
cases across the country. (Id.) Co-Lead Counsel Austin Whitten is an associate
attorney at Pittman, Dutton & Hellums, P.C., and is currently an attorney of record
and litigating four active class action lawsuits. (Mann ¶ 4.)
Settlement Class Counsel has spent 420.1 hours on this case and utilized their
extensive experience to achieve a favorable result for the Settlement Class Members
in this case. Accordingly, the representation by Settlement Class Counsel has been
more than adequate.
ii. The Class Satisfies the Requirements of Rule 23(b)(3)
1. 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 injunctive and monetary relief.” Terrill, 295 F.R.D. at 688. Here, as in previous
data breach cases, common questions of fact and law described above predominate
over any individualized issues for purposes of settlement. See, e.g., Home Depot,
2016 WL 6902351, at *2; In re Countrywide, 2009 WL 5184352, at *6-7; In re
Heartland Payment Systems., 851 F. Supp. 2d at 1059.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 29 of 32
30
2. Superiority
Because of the common issues that predominate in this case, a class action is
superior to other methods for adjudicating these claims. See In re Anthem, Inc. Data
Breach Litigation, 15-MD-02617-LHK, 2018 WL 3872788, at *11 (N.D. Cal. Aug.
15, 2018) (citing Home Depot and Target). Judicial economy is best served for
purposes of settlement by resolving Plaintiffs’ claims as a class. See Terrill, 295
F.R.D. at 697 (“A single, coordinated proceeding is superior to hundreds of discrete
and disjointed suits addressing the same facts and legal issues.”).
i. Notice to the Settlement Class Complied with Due Process.
Rule 23(e)(1)(B) requires that the court direct notice in a reasonable manner
to all class members who would be bound by the proposal. Id. “The notice should
be ‘reasonably calculated, under all the circumstances, to appraise interested parties
of the pendency of the action and afford them an opportunity to present their
objections.’” Saccoccio v. JP Morgan Chase Bank, N.A., 297 F.R.D. 683, 691 (S.D.
Fla. 2014). The notice program utilized here, as set by the Court’s May 20, 2020
Order (Doc. 35), meets this standard. See Fed. Judicial Center, Judges’ Class Action
Notice and Claims Process Checklist 1 (2010) (describing 70-95% as a “high
percentage” of class members reached for effective notice); Fed. Judicial Center,
Managing Class Action Litig.: A Pocket Guide for Judges 27 (3d ed. 2010) (same).
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 30 of 32
31
The Notice describes the Settlement terms, legal claims at issue, releases,
claims submission, objections, and opt-out processes, and all relevant deadlines in
plain language. As previously discussed, KCC established a website and continues
to assist potential Settlement Class Members with the Settlement and claims process,
as do Settlement Class Counsel. The Plaintiffs have satisfied all the elements of the
notice plan as approved by the Court.
V. CONCLUSION
For the reasons stated herein and in the Co-Lead Counsel Declaration, Plaintiffs
respectfully request that the Court: (1) grant final approval of the proposed class
action settlement between the Parties; (2) finally certify the Settlement Class
pursuant to Federal Rules of Civil Procedure 23(b)(3) and (3) enter a final judgment
in this action. A proposed order is attached for consideration as Exhibit C.
Dated: September 1, 2020 Respectfully Submitted, /s/ Bryan F. Aylstock Bryan F. Aylstock, Esq. AYLSTOCK, WITKIN, KREIS & OVERHOLTZ, PLLC Florida Bar No. 78263 17 East Main Street, Suite 200 Pensacola, Florida 32502 Tel: (850) 202-1010 Fax: (850) 916-7449 Email: [email protected]
/s/ Jonathan S. Mann Jonathan S. Mann, Esq. Austin B. Whitten, Esq. PITTMAN, DUTTON & HELLUMS, P.C. 2001 Park Place North, Suite 1100 Birmingham, AL 35203 Tel: (205) 322-8880 Fax: (205) 328-2711 Email: [email protected] Email: [email protected]
Attorneys for Plaintiff and the Settlement Class
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 31 of 32
32
LOCAL RULE 7.1(C) CERTIFICATION
Prior to the filing of this motion, the undersigned conferred with Clearway’s
counsel pursuant to Local Rule 7.1(B) regarding this motion and the relief it seeks,
and Clearway’s counsel stated their non-opposition to this motion for purposes of
settlement only.
LOCAL RULE 7.1(F) CERTIFICATION
Pursuant to Local Rule 7.1(F) and the Court’s Order, the undersigned counsel
certifies that this memorandum contains 6,744 words as per the report of the word
processing program utilized to prepare this memorandum.
ORAL ARGUMENT
The Plaintiff requests oral argument on this motion, should the Court desire
it, pursuant to Local Rule 7.1(K). It is estimated that oral argument will require no
longer than one hour.
Case 3:19-cv-01659-RV-HTC Document 38 Filed 09/01/20 Page 32 of 32
EXHIBIT A
EXHIBIT B
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 1 of 8
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF FLORIDA
PENSACOLA DIVISION
RICKY WILLIAMS, on behalf of ) himself and all others similarly situated, )
) Plaintiff, )
)v. ) Case No. 3:19-cv-1659-RV-HTC
) GULF COAST PAIN CONSULTANTS, ) LLC D/B/A CLEARWAY PAIN ) CLASS ACTION SOLUTIONS INSTITUTE, )
) Defendant. )
DECLARATION OF JONATHAN S. MANN IN SUPPORT OF PLAINTIFF'S MOTION
FOR FINAL APPROVAL
I, Jonathan S. Mann, hereby declare and state as follows:
1. I am over the age of twenty-one and I have personal knowledge of the
matters set forth herein, and I believe them to be true and correct.
2. This Court appointed Bryan F. Aylstock of Aylstock, Witkin, Kreis &
Overholtz, PLLC, Austin Whitten of Pittman, Dutton & Hellums, P.C., and me as Co-
Lead Counsel on May 20, 2020 (Doc. 35), in its order preliminarily approving the
settlement and directing notice to the settlement class.
3. I am a shareholder at Pittman, Dutton & Hellums, P.C. (“PDH”) where I
have concentrated my practice in the areas of complex civil litigation matters, including
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 2 of 8
2
class actions, mass torts, catastrophic personal injury, product liability, and wrongful
death cases since joining the firm in 2011. I currently serve on plaintiff steering
committees in multidistrict litigations in the District of New Jersey and the Northern
District of Georgia. I serve or have served as counsel in several antitrust, data breach,
and consumer protection class actions pending across the country. I have also been
counsel in class actions that have resolved involving data breaches and fraudulent
billing practices.
4. Austin B. Whitten has practiced with me as an associate attorney at PDH
since 2015. Mr. Whitten specializes in complex civil litigation matters, including mass
torts, class actions, and catastrophic personal injury, product liability, insurance fraud,
and wrongful death cases. Mr. Whitten works on antitrust, data breach and consumer
protection class actions pending across the country.
5. Bryan F. Aylstock is a founding partner at Aylstock, Witkin, Kreis &
Overholtz, PLLC, (“AWKO”) focusing his practice on product liability, multidistrict
litigation, and class actions. He has served as Co-Lead Counsel, on steering committees,
and held other leadership roles in numerous in other class actions and multidistrict
litigations. Additionally, many attorneys in AWKO have significant experience as lead
counsel in class litigation in national and state class actions across the country.
6. On or around February 20, 2019, Clearway suffered a data breach (the
“Data Incident”), during which the electronic medical records (“EMR”) system was
accessed in an unauthorized manner by a former contractor. It was determined this third-
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 3 of 8
3
party not only accessed but committed theft of the confidential personal identifiable
information (“PII”) and protected health information (“PHI”) of Clearway’s 31,874
patients and guarantors from Clearway’s EMR system. On June 7, 2019, Plaintiff,
individually and on behalf of a putative class, filed an action against Clearway alleging
claims arising from the Data incident for: (1) negligence; (2) invasion of privacy; (3)
breach of implied contract; (4) unjust enrichment; (5) breach of fiduciary duty; and (6)
breach of confidence (Doc. 1).
7. On August 19, 2019, the Parties held a Rule 26 meeting. On September 4,
2019, Clearway filed a Motion to Dismiss with Incorporated Memorandum of Law
seeking dismissal of the Complaint (Doc. 21).
8. On September 5, 2019, the Parties exchanged Initial Disclosures.
Thereafter, the Parties engaged in extensive confirmatory discovery and intensive
arm’s-length negotiations over the following months with a view toward achieving
substantial benefits for the Settlement Class as a whole, while avoiding the cost, delay
and uncertainty of further litigation, trial, and appellate practice. On November 15,
2019, the Court entered the Parties’ stipulated Protective Order (Doc. 27) to facilitate
the Parties’ exchange of confidential, proprietary, and private information regarding the
claims. Co-counsel and I were able to assess the merits of Plaintiff’s claims and
Clearway’s defenses, as well as the material facts regarding the nature, cause, and
effects of the Data Incident. Co-counsel and I retained experienced cybersecurity
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 4 of 8
4
experts to aid in their investigation and evaluation of Plaintiff’s claims and Clearway’s
defenses.
9. On January 28, 2020, the Parties engaged in a full-day mediation with
Rodney Max of Upchurch, Watson, White & Max. Because of the complex nature of
this action, the Parties were not able to reach an agreement on all the key terms at
mediation. However, negotiations continued between the Parties with the ongoing
assistance of the mediator, and the Parties were able to reach an agreement on all the
principal terms of settlement for this matter, subject to final mutual agreement on all
necessary documentation. Thereafter, on March 2, 2020, the Parties filed a Joint Notice
of Settlement notifying the Court of the agreement reached (Doc. 31).
10. The Parties then drafted the necessary documentation supporting the
Settlement. Counsel for Clearway and the Settlement Class jointly drafted and executed
the Settlement Agreement that memorializes and governs the Settlement.
11. The Settlement compensates all individuals in the United States whose
personally identifiable information and/or protected health information was affected by
the Data Incident (“Class Members”). “Personally Identifiable Information” and/or
“Protected Health Information” is defined as names, home and work addresses, home
and work telephone numbers, email addresses, social security numbers, dates of birth,
chart numbers, health insurance information and potentially primary care information
and employment information. These terms do not include payment card, such as debit
or credit card, or other financial account information.
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 5 of 8
5
12. The Settlement will provide monetary relief to the Class Members for
ordinary and extraordinary losses. The Settlement further provides for injunctive relief
in the form of implementing and maintaining certain data security measures and training
for a period of at least twenty-four (24) months to ensure that the Class Members’ PII
and PHI is protected going forward.
13. The terms of the Settlement are accurately defined within the Settlement
Agreement that has been filed on the record in this case.
14. Only after their substantial negotiations regarding the material terms of the
Settlement did Settlement Class Counsel begin to engage in additional arm’s length
negotiations concerning an appropriate amount for Attorneys’ Fees and Expenses, as
well as a Service Payment to the Settlement Class Representative. At the conclusion of
these negotiations, Defendant agreed not to oppose a proposed award of attorneys’ fees
and reimbursement of expenses totaling up to $250,000, nor to oppose a proposed
incentive award of $2,500 for the Class Representative. These awards are separate and
apart from and will not affect the total amount Defendants are required pay in order to
satisfy the approved Settlement Class claims under the Settlement Agreement.
15. The Settlement requires Clearway to pay the costs associated with or
arising from claims administration and the Notice Plan. Because providing notice to the
class and administering the Settlement is necessarily a lengthy and time-consuming
process, the Parties estimated this aspect of the Settlement to cost $100,000 at the time
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 6 of 8
6
the Settlement Agreement was executed. The final amount of this expense will not be
known until the settlement has been fully administered.
16. Counsel thoroughly investigated Plaintiff’s claims, evaluated Plaintiff’s
claims and Clearway’s defenses, filed the complaint, participated in a Rule 26 meeting,
engaged in extensive informal discovery, coordinated document collections and
reviewing productions, retained experienced cybersecurity experts to aid in their
investigation, engaged in months-long negotiations at arm’s length culminating in a 10+
hour mediation, continued negotiations for weeks with the ongoing assistance of the
mediator, and spent a great deal of time working through the settlement process with
the defendant and individual Class Members.
17. Settlement Class Counsel spent 420.1 hours working on this case with no
guarantee of payment. The lodestar calculation totaled $158,877.50 in this matter.
Detailed time reports supporting the lodestar amount are available for in camera
inspection at the Court’s request.
18. The hourly rates of Settlement Class Counsel and attorneys at their firms
ranged from $250 for a junior associate to $650 for a senior partner/shareholder, which
is commensurate with the hourly rates of attorneys in similar class action data breach
cases venued in the Eleventh Circuit.
19. Settlement Class Counsel also advanced $17,682.57 in expenses in this
case with no guarantee of recoupment. Detailed time reports supporting the expense
amount are available for in camera inspection at the Court’s request.
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 7 of 8
7
20. The expenses were common expenditures incurred in litigation and
consistently charged to hourly clients. These expenses include investigation, litigation
assessment, court costs, experts/consultants, legal research (Lexis/Westlaw and
PACER), mediator fees, photocopies, postage, service of process, special supplies,
travel, and other costs.
21. The time spent litigating and settling this case necessarily precluded
lawyers with the experience and skill of Settlement Class Counsel from engaging in
other cases. This case was complex and presented difficult issues. Settlement Class
Counsel understood that litigating this case would require substantial time and money,
creating a significant risk they would for forego any compensation. Additionally, the
relationship between a class action plaintiff and counsel is unlikely to lead to repeat
business or ongoing retainers, as might be the case where counsel represents a business
or wealthy client.
22. The requested awards will not affect the amount Defendant will pay to
satisfy the approved Settlement Class claims or the cost of notice, nor the cost to
implement the non-monetary benefits for a period of twenty-four (24) months.
23. Ricky Williams spent many hours providing documents, speaking with co-
counsel and me about the case, and reviewing and executing the Settlement Agreement.
I declare under penalty of perjury that the foregoing is true and correct.
Executed on September 1, 2020 in Birmingham, Alabama.
/s/ Jonathan S. Mann
Case 3:19-cv-01659-RV-HTC Document 38-2 Filed 09/01/20 Page 8 of 8