In Re Uber FCRA Litigation, 3:14-cv-05200

Background

Plaintiffs filed consolidated putative class actions alleging Uber violated the Fair Credit Reporting Act (FCRA) and related state laws by obtaining background/consumer reports without proper notice, authorization, or pre-adverse-action disclosures.
The consolidated class includes all persons subject to an Uber background check/request before January 3, 2015 (approx. 1,025,954 potential members), split into an ADR Group (accepted arbitration provisions; ~424,125 members) and a Court Group (~601,829 members).
Parties reached a pre-certification settlement: Uber to pay $7.5 million into a Settlement Fund; $7,500 allocated to PAGA (75% to state, 25% to class); injunctive relief preventing return to pre-2015 disclosure forms for one year; administration funded by Uber outside the Fund.
Class payments vary by subgroup and claims rate (e.g., estimated $55.27 ADR / $125.01 Court at 5% claims rate); uncashed funds first reimburse administration then cy pres to Legal Services for Prisoners with Children.
Court provisionally certified the settlement class for settlement purposes, found the settlement resulted from arm’s-length negotiation, and concluded that despite large discount from maximum statutory exposure, settlement falls within the range of possible approval given substantial factual and legal risks to Plaintiffs.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Class certification for settlement	Class meets numerosity, commonality, typicality, adequacy, and predominance under Rule 23	N/A (settlement posture)	Court provisionally certifies the class under Rule 23 for settlement purposes
Fairness and adequacy of pre-certification settlement	Settlement of $7.5M reasonable given litigation risks, discovery weaknesses, and arbitration exposure	Settlement acceptable; arbitration and other defenses would limit recovery	Under an "exacting" review, court preliminarily approves settlement as within range of possible approval
Scope of release (all background-check claims that could have been asserted)	Release appropriate in exchange for consideration	Broad release justified by settlement value	Court approves broad release (excluding PAGA claims not based on background checks)
Notice method (email-first with postcard follow-up)	Email notice efficient; administrator will test and minimize spam-blocking; claims process necessary to update contacts	Direct mailing to all impracticable and costly; claims process reduces waste	Court approves notice procedures but requires parties to run and submit a spam-blocking test trial design before mailing
Attorneys' fees request (1/3 of fund)	Counsel seeks $2,500,000 (1/3) citing lodestar below request; negative multiplier asserted	Objectors may challenge; court concerned fee may exceed 25% benchmark	Court expresses concerns about fee level but does not deny preliminary approval; fee motion to be decided later
PAGA allocation ($7,500)	Plaintiffs concede PAGA claim weak; small allocation reasonable	Uber argues minimal PAGA allocation appropriate	Court approves small PAGA allocation given PAGA claim’s lack of merit

Key Cases Cited

Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (sets Rule 23(a) class-certification and settlement-review principles)
Churchill Village, L.L.C. v. General Elec., 361 F.3d 566 (9th Cir. 2004) (factors for fairness, adequacy, and reasonableness of class settlements)
In re Heritage Bond Litigation, 546 F.3d 667 (9th Cir. 2008) (settlement must be "fundamentally fair, adequate, and reasonable")
In re Syncor ERISA Litigation, 516 F.3d 1095 (9th Cir. 2008) (Rule 23(e) protects unnamed class members from unfair settlements)
Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012) (requires more exacting review for pre-certification settlements)
In re Bluetooth Headset Products Liability Litigation, 654 F.3d 935 (9th Cir. 2011) (addresses and warns against "clear sailing" fee arrangements)
Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007) (willfulness standard: reasonable interpretation negates willfulness under FCRA)
Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (addresses concreteness/injury-in-fact for statutory violations)
Syed v. M-I, LLC, 853 F.3d 492 (9th Cir. 2017) (post-Spokeo Ninth Circuit view that certain FCRA disclosure violations can satisfy concreteness requirement)
Edwards v. First American Corp., 798 F.3d 1172 (9th Cir. 2015) (predominance analysis under Rule 23(b)(3))