Yahoo Data Breach Settlement Denied

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By William Vogeler, Esq. on January 29, 2019 2:02 PM

Yahoo lawyers right now are probably not liking Judge Lucy Koh, who denied their proposed settlement in the biggest data breach case in history.

In Re: Yahoo! Inc. Customer Data Security Breach Litigation, Koh said the settlement did not disclose the size of the settlement. It's hard to know whether a settlement is fair with that information, she said.

It's clear, however, that the parties want to wind up the litigation. And that's another problem, the judge said.

"Settle and Go"

Koh has not been a fan since the data breach became public in 2017. It came out after Verizon agreed to buy Yahoo's internet business.

In the class action that followed, plaintiffs accused Yahoo of being too slow to disclose data breaches that dated back to 2013. The company admitted the breaches affected all 3 billion Yahoo users.

In early 2018, Koh refused Verizon's request to dismiss many of the claims. Then in a hearing last November, she turned the knife deeper.

"I'm disappointed that there doesn't seem to be any motivation to get to the bottom of this," Koh said then. "It appears there's a willful blindness or an attitude of 'Let's settle this and get out.'"

Where's the Money?

In denying the proposed settlement, Koh also questioned the amount of attorney's fees. The lead plaintiff's counsel wants $22 million for his firm and 32 other firms involved in the consolidated case.

Koh said their claim was "surprising." Only five firms were authorized to work on the case, she said, and the legal theories were not "particularly novel."

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