In re Linkedin User Privacy Litigation
2015 U.S. Dist. LEXIS 123130
| N.D. Cal. | 2015Background
- LinkedIn sold premium subscriptions (Mar 15, 2006–Jun 7, 2012); plaintiffs allege LinkedIn promised "industry-standard" data security but failed to salt/hash passwords, leading to a June 2012 password breach affecting ~6.4 million accounts.
- Representative plaintiff Wright sued on behalf of (1) premium subscribers who paid fees and (2) persons whose information was compromised; claims included UCL (fraudulent and unfair prongs) and breach of contract based on the Privacy Policy.
- Litigation history: consolidation of related suits, multiple motions to dismiss (with partial grants/denials), amendment of the complaint, formal mediation, and a negotiated settlement executed Aug 14, 2014; preliminary approval granted Jan 29, 2015.
- Settlement terms: $1,250,000 common fund; ~800,000-class members; approved claimants (~47,336) to receive ≈ $14.81 each after fees/costs; LinkedIn obliged to implement salting/hashing (or equivalent) for five years; cy pres recipients named for residual funds.
- Objectors raised concerns about low per-person recovery, attorneys’ fees, and cy pres; the court held a final fairness hearing and considered objections before ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Class certification under Rule 23 (numerosity, commonality, typicality, adequacy, predominance, superiority) | Wright: class-wide misrepresentations about security and common injuries from overpayment justify certification for settlement | LinkedIn challenged standing and the ability to maintain class status absent settlement | Court certified the settlement class under Rule 23(a) and (b)(3) for settlement purposes |
| Fairness of the pre-certification settlement (Churchill/Bluetooth factors) | Settlement provides monetary and injunctive relief, avoids litigation risk, and was negotiated with neutral mediator | LinkedIn contested aspects of relief and reserved right to contest fees; objectors argued settlement was inadequate | Court found settlement fair, reasonable, adequate, not collusive, and approved final settlement |
| Attorneys’ fees and costs (percentage v. lodestar) | Class counsel sought $375,000 (30% of fund) + $26,608.67 expenses, arguing risk, results, and lodestar support request | LinkedIn and objectors argued the requested percentage was excessive | Court applied 25% benchmark, awarded $312,500 in fees and $26,608.67 in expenses (lodestar cross-check supported award) |
| Incentive/service award for class representative | Wright requested $7,500 for time and effort | LinkedIn opposed as excessive given limited involvement | Court awarded $5,000 (presumptively reasonable in this district) |
Key Cases Cited
- Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (standards for incentive awards and fairness review in class actions)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standard for approval of class settlements and Rule 23 class certification analysis)
- In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (requirements to guard against collusion in pre-certification settlements; fee award guidance)
- Churchill Village, LLC v. General Elec., 361 F.3d 566 (9th Cir. 2004) (Churchill factors for settlement fairness)
- Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (U.S. 2011) (rigorous Rule 23 analysis; commonality requirements)
- Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012) (context on cy pres in privacy/data cases)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (lodestar and multiplier principles for fee awards)