JOHN DOES 1-5, et al., Plaintiffs, v. KAISER FOUNDATION HEALTH PLAN, INC., et al., Defendants.
Case No. 23-cv-02865-EMC
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
October 24, 2025
Docket No. 345
Plaintiffs are individuals who have filed a class action against three Kaiser entities1 (collectively, “Kaiser“). Plaintiffs allege that Kaiser violated their privacy rights, and those of others similarly situated, in violation of various federal and state laws. According to Plaintiffs,
unbeknownst to Plaintiffs and other Kaiser Plan Members, Kaiser has installed code from multiple third parties throughout the Kaiser website and mobile applications that allows third party companies, including but not limited to Quantum Metric, Twitter, Adobe, Microsoft Bing, . . . Google[,] [and Dynatrace] (collectively, “Third Party Wiretappers“) to intercept the content of Plaintiffs and Class Members’ patient status, identifying information, medical topics researched, choices made, information shared and communications with their medical providers, including personally identifiable medical information, Protected Health Information (“PHI“) that Kaiser was required to protect under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA“),
42 U.S.C. § 1320d-6 , and other confidential information and communications, when that information is in transit.
CAC ¶ 4.
Now pending before the Court is Plaintiffs’ motion for preliminary approval of a class
Objections have been filed with respect to the motion for preliminary approval. One set of objectors is represented by the three law firms: Labaton, Milberg, and Bryson. The firms also represent thousands of other Kaiser plan members. The other set of objectors is represented by the Potter firm. Potter also represents thousands of other Kaiser plan members. For convenience, the first set of objectors shall hereinafter be referred to as the Labaton Objectors and the second set as the Potter Objectors.2
Having considered both the parties and the Objectors’ submissions, as well as the oral argument of counsel, the Court hereby rules as follows.
I. DISCUSSION
A. Settlement Terms
Here, the parties have agreed to a gross settlement fund of $46 million (which could increase up to $47.5 million) for a settlement class of approximately 13.1 million people. The net settlement fund is expected to be about $27.48 million once deductions are taken for, e.g., attorneys’ fees, litigation expenses, settlement administration fees, and incentive awards. If there is a claims rate of 5-10% (as anticipated by the settlement administrator), the payout to each claiming class member would be about $20.98-$41.95. Each class member has already benefited from Plaintiffs’ litigation of this case because, after Plaintiffs moved for a preliminary injunction, “Kaiser disabled, deleted, or modified the internet technologies provided by Adobe, Bing, Google, Twitter, and Quantum Metric” and further migrated “Dynatrace technology to the on-premises deployment model offered by Dynatrace“; in addition, Kaiser implemented consent banners on its
B. Judicial Review of Proposed Class Action Settlement
Under
- Individuals could be subject to arbitration (such as the named California plaintiff). See Mot. at 12.
- For the nationwide claims, choice of law could be a problem. See Mot. at 12.
- Privacy breach case law is still developing (e.g., damages methodologies). See Mot. at 13 n.11.
- Not all claims would necessarily survive - e.g., in its order granting in part the motion to dismiss the first amended complaint, the Court dismissed Plaintiffs’ claims for violations of the Electronic Communications Privacy Act, the California Invasion of Privacy Act, and the California Confidentiality of Medical Information Act. See Mot. at 13.
- If claims with statutory damages were dismissed, then there might only be nominal damages or damages could be too individualized. See Mot. at 12-13.
Notably, Objectors do not make any contention that the relief provided for by the proposed
C. Settlement Class Definition
The definition of the settlement class in the case at bar takes into account this Court‘s rulings in In re 23andMe, Inc. Customer Data Sec. Breach Litig., No. 24-md-03098-EMC, 2024 U.S. Dist. LEXIS 219622 (N.D. Cal. Dec. 4, 2024). There, the Court held that the settlement class definition should be “modified to exclude those 23andMe customers who have chosen to exercise their right to arbitrate, whether by making a mere demand for arbitration or by filing a formal complaint with the arbitral forum (but not, e.g., simply threatening to arbitrate).” Id. at *43 (conditioning preliminary approval on a modification to the settlement class definition); see also id. at *41 (indicating that those in arbitration cannot “be included in a certified class given potential concerns about typicality/adequacy“).4
Here, the parties have agreed to a settlement class definition that recognizes exclusion of those in arbitration but only on certain terms. Essentially, the settlement class definition provides that, if an individual did not perfect their arbitration request, they are included in the settlement class.
“Perfected Arbitration Claim” means the Claim of a current or former Kaiser Permanente member who completed either of the following on or before the filing of the Motion for Preliminary Approval of the Settlement:
(a) Preparing and serving an individual demand for arbitration
pursuant to Rules 7 and 8 of the Rules for Kaiser Permanente Member Arbitrations of the Office of the Independent Administrator (the “Rules“); and the claimant or their counsel has paid the $150 filing fee required by Rule 12 or submitted a filing fee waiver pursuant to Rule 13; or (b) Where the current or former Kaiser Permanente member was included on a Demand for Arbitration on behalf of 25 or more claimants that was prepared and served pursuant to Rules 7 and 8 of the Rules, the Demand complies with Rule 4(a) of the Supplemental Rules Governing Mass Arbitrations (the “Supplemental Rules“) and the claimant or their counsel has paid the $150 filing fee required by Supplemental Rule 5 and Rule 12
for claims that refer to, relate to, or are otherwise based on any act, omission, practice, or conduct alleged or at issue in the Consolidated Class Action Complaint.
Sett. Agmt. ¶ 1.11 (emphasis added).
As an initial matter, the Court notes that - though not entirely clear - Objectors seem to argue that something less than a formal demand for arbitration (or a formal filing of an arbitration complaint) should be good enough to take someone out of the settlement class definition. See Labaton Opp‘n at 3 (asking for exclusion of “all individuals who have attempted to arbitrate or provided notice of their intent to arbitrate“). But in 23andMe, this Court essentially rejected that position, stating that “the settlement class definition agreed to by the parties must be modified to exclude those 23andMe customers who have chosen to exercise their right to arbitrate, whether by making a mere demand for arbitration or by filing a formal complaint with the arbitral forum (but not, e.g., simply threatening to arbitrate).” 23andMe, 2024 U.S. Dist. LEXIS 219622, at *43 (emphasis added). The Court thus rejects Objectors’ contention here.
That being said, the Court agrees with Objectors that the settlement class definition as phrased inappropriately includes the requirement that a class member must have paid the filing fee. The 23andMe settlement class definition did not include that requirement, and the Court sees no reason to impose such a requirement. If an individual chose arbitration with Kaiser and then (for whatever reason) did not pay the filing fee, then the arbitration would go no further. That would not necessarily then give the person the right to jump back into litigation. Requiring payment of the arbitration filing fee would be particularly problematic in this case where the parties have a dispute about whether the OIA Rules that existed before the supplemental rules
This leaves the Court with one final issue regarding the settlement class definition: should the Labaton clients and some of the Potter clients be excluded from the settlement class definition because they did demand arbitration even if they subsequently abandoned arbitration by initiating lawsuits in state court? The Labaton clients have filed a class action lawsuit in state court, asserting not clarification and enforcement of arbitration, but the same substantive privacy claims against Kaiser asserted in the instant case. Likewise, nearly all the Potter clients (with the exception of a small number of individuals who are still actively pursuing arbitration) have joined one of five mass actions filed in state court, asserting substantive claims similar to those asserted in the instant case. Labaton and Potter argue that their clients who have filed suit should still be excluded from the class even though they are no longer actively pursuing arbitration. Labaton and Potter suggest that they were forced to file lawsuits on their clients’ behalf because, even though the clients wanted to arbitrate, Kaiser improperly had the arbitral rules changed once the mass arbitrations were initiated. Thus, Labaton and Potter essentially argue that, as an equitable matter, their clients should be counted as arbitrating individuals and thus categorically excluded from the defined class herein. But even if the Labaton and Potter clients were “forced” to file lawsuits,5 the Court in 23andMe did not exclude those in arbitration because of equitable reasons; rather, it did so because of
Therefore, so long as the settlement class definition is modified so that exclusion extends only to those who have demanded or initiated arbitration and are still in the arbitration track, and not to those who are now in the state court litigation track, the Court would be inclined to grant
D. Mass Opt-Outs
In 23andMe, the Court already indicated that it would not permit mass opt-outs. See 23andMe, Inc., 2024 U.S. Dist. LEXIS 219622, at *84 (not permitting en masse objections; citing in support In re CenturyLink Sales Pracs. & Sec. Litig., MDL No. 17-2795 (MJD/KMM), 2020 U.S. Dist. LEXIS 114110, at *9-10 (D. Minn. June 29, 2020), where court explained that “‘the requirement that a class member must individually sign is vital, because it ensures that the class member is individually consenting to opt out, and avoids a third party or lawyer representing that they have that class member‘s authority, without the class member making an informed, individual decision‘“).
The Court acknowledges that, in a decision that issued subsequently, Judge Freeman allowed for mass opt-outs. Specifically, she accepted a mass opt-out from the Labaton firm, which claimed to represent approximately 69,500 individuals.
Here, Labaton has represented under oath that each of the Arbitration Claimants did make an individualized decision to retain Labaton‘s legal services and to opt out from the Class in order to pursue claims in arbitration. The Court sees no reason why the Arbitration Claimants may not act through their attorneys in executing those requests to opt out of the Class. As the Court noted at the hearing, should it turn out that any of the Arbitration Claimants did not so retain and authorize Labaton, those individuals would have a malpractice remedy. And for any opt-out claimant who does not have an arbitration agreement with Google, Labaton has confirmed that its representation will cover their pursuit of their claims in other judicial forums. In short, the Court rejects Google‘s argument that accepting these opt-outs presents a due process issue.
In re Google Assistant Priv. Litig., No. 5:19-cv-04286-BLF, 2025 U.S. Dist. LEXIS 28914, at *9-10 (N.D. Cal. Feb. 14, 2025). This Court respectfully disagrees. It is questionable whether a malpractice suit is a real remedy: malpractice claims generally have rigorous standards (including having to prove prejudice which often requires the plaintiff to demonstrate a likelihood she would have prevailed in the underlying case but for the malpractice), and an individual may not be in a position to pursue a suit at all if only limited damages are available. Furthermore, the Court has,
The Potter firm argues that, even aside from the mass opt-out issue, the opt-out process is burdensome and confusing. It makes, for example, the following criticisms:
- The short-form notice is what the settlement class members will receive (the long-form is available only on the settlement website), and it does not spell out the details of the opt-out process in and of itself but rather requires members to refer to the long-form notice. See Opp‘n at 8.
- Settlement class members may not want to opt out online given that their personal information has already been compromised. See Opp‘n at 8-9.
- Online opt-outs are also problematic because settlement class members could be discouraged from opting out if the settlement website is confusing, is slow to load, or goes offline. See Opp‘n at 9.
- The long-form notice is too long (15 pages). See Opp‘n at 9.
- A settlement class member cannot opt out without having their unique settlement ID number; it would be easier for members to opt out by using their Kaiser member ID numbers instead. See Opp‘n at 9.
These criticisms largely lack merit. For example, it makes sense to have a short-form notice go out in the first instance for several reasons: (1) given the number of settlement class members, it would be more expensive to send out long-form notices, at least by mail, cf. Supp. Mulholand Decl. ¶ 3 (noting that to mail the short-form notice to 13.1 million settlement class members would cost about $9 million); and (2) even though e-mail notice could accommodate the long-form notice, it would likely be more of a deterrent to have the long-form notice in the e-mail (i.e., settlement class members likely would not want to read an email of any significant length). As for the means of opting out, a settlement class member can opt out by mail, not just online. To the extent Potter argues that there is no need for a settlement ID number given that the class members should have Kaiser member IDs, a Kaiser member ID is, in and of itself, private information. Requiring disclosure of such personal health-related information on an opt-out form could deter members from opting out. If Potter‘s concern is that a settlement class member cannot
While the Court rejects Objectors’ arguments above, it emphasizes that the individualized opt-out process should not be cumbersome or burdensome. In this regard, the Court does not take issue with, e.g., a longer opt-out period so that Labaton and Potter can have more time to get the individualized opt-outs. The individualized opt-outs should also be acceptable with either a wet-ink signature or an electronic one (e.g., Docusign). If Labaton and Potter wish to collect the individualized opt-outs and then give them to the settlement administrator (rather than requiring each member opting out to send their form to the class action administrator or the Court), that would appear to be a reasonable request. The Court orders the parties and Objectors to meet and confer to determine a reasonable process for individualized opt-outs to be made. The parties and/or Objectors may wish to include the settlement administrator in these discussions.
Finally, the Court notes that both the parties and Objectors have agreed that, should there be any individuals who are excluded from the settlement class because they have demanded or initiated arbitration, they should be given notice of the settlement so that they have an opportunity to “opt in.”6 The Court directs the parties and Objectors to discuss the opt-in process as well.
E. California Plan Members
Finally, Objectors claim that California plan members (such as themselves) have higher-value claims compared to non-California plan members, but the parties’ settlement agreement or rather, the plan of allocation established by Plaintiffs - does not recognize such. But Objectors’ position fails to take into account that this Court already indicated in its prior order granting in part Kaiser‘s motion to dismiss that there were problems with the California claims. Given the litigation risk, it is not clear that California plan members are in a stronger position compared to non-California plan members. Furthermore, all class members face the same litigation risk of whether Kaiser intentionally or negligently allowed third parties to use plan member information
II. CONCLUSION
For the foregoing reasons, the Court is inclined to grant preliminary approval to the proposed class action settlement but that will turn on modification of the settlement class definition and opt-out means, as discussed above.
The Court continues the hearing on preliminary approval to November 25, 2025, at 1:30 p.m. The hearing will be held via Zoom. By November 13, 2025, the parties and Objectors shall file supplemental papers addressing the results of their meet and confer. (If the settlement agreement, class notice, etc. are modified, such papers shall also be filed at that time.) If there are disagreements, each party or Objector shall state its last offer of compromise. The Court strongly prefers a joint filing by the parties and Objectors.
IT IS SO ORDERED.
Dated: October 24, 2025
EDWARD M. CHEN
United States District Judge