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Financial Services Law Insights and Observations

District Court approves $17 million data breach settlement

Privacy/Cyber Risk & Data Security Courts Settlement Data Breach State Issues CCPA California

Privacy, Cyber Risk & Data Security

On March 15, the U.S. District Court for the Northern District of Illinois granted final approval of a class settlement to resolve claims alleging two defendant insurance companies failed to protect over six million employee/customers’ personal and private identifying information, including names, addresses, Social Security numbers, and driver’s license numbers, from two data breach and scraping incidents. According to the memorandum of law in support of the plaintiffs’ unopposed motion for final approval, plaintiffs separately filed complaints after learning the defendants were exposed to two separate data breaches in December 2020 and March 2021. The cases were consolidated, and parties engaged in settlement negotiations. Under the terms of the settlement agreement, the defendants will provide settling class members with at least $17.1 million in relief. Class members will also have automatic access to certain financial fraud services and may submit claims to receive compensation for out-of-pocket losses (capped at $10,000 per person) and lost-time losses (up to six hours of lost-time reimbursements at $18 per hour), in addition to receiving $50 per hour if they missed work to address the breaches. Additionally, a California subclass will also be able to file claims for $50 in statutory relief. Under the California Consumer Privacy Act, consumers may seek statutory damages of up to $750 per violation. Defendants are also responsible for a portion of attorneys’ fees and costs.