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Financial Services Law Insights and Observations

District Court approves CCPA class action settlement

Courts Class Action Illinois Data Breach CCPA Privacy/Cyber Risk & Data Security State Issues California

Courts

On October 27, the U.S. District Court for the Northern District of Illinois granted preliminary approval of a class action settlement resolving claims against an Illinois-based insurance provider and its subsidiary (collectively, defendants) for allegedly failing to adequately protect plaintiffs’ personal and private information when defendants were the targets of security breach incidents where an unauthorized user’s access to the defendants’ network and computer systems resulted in unauthorized access of personal, private information (PII). According to the memorandum of law in support of the plaintiffs’ motion for preliminary approval, the plaintiffs sued after learning that the defendants were targeted by hackers in December 2020, which affected over 5.8 million customers, and again in March 2021, which affected more than 324,000 customers. This conduct, the plaintiffs contended, violated the California Consumer Privacy Act, the California Consumers Legal Remedies Act, California’s Unfair Competition Law, and various state common laws. While the defendants denied allegations of wrongdoing and liability, and asserted defenses to the individual and class claims, the parties reached a proposed settlement, in which class members (defined as “all natural persons residing in the United States who were sent notice letters notifying them that their PII was compromised in the Data Incidents announced by Defendants on or about March 16, 2021 and on or about May 25, 2021”) will be provided automatic access to 18 months of credit monitoring and financial account protection. Additionally, every class member can make a claim for up to $10,000 in reimbursement for out-of-pocket losses. The preliminarily approved settlement also provides for class counsel fees and expenses not to exceed roughly $2.5 million and class representative service awards of $1,500.

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