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In re Zappos Security Breach Litigation

United States District Court, D. Nevada

December 23, 2019

IN RE ZAPPOS SECURITY BREACH LITIGATION

          FINAL APPROVAL ORDER

          HON. ROBERT C. JONES UNITED STATES DISTRICT COURT JUDGE

         This matter came before the Court for hearing on December 20, 2019, pursuant to Federal Rule of Civil Procedure 23 and the Order Granting Preliminary Approval of Class Action Settlement (ECF No. 335) (“Preliminary Approval Order”). Plaintiffs seek final approval of the Settlement Agreement and Release (the “Agreement”) (see ECF No. 331-1), an award of attorneys' fees and cost reimbursements to Class Counsel and Other Plaintiffs' Counsel, and service awards to each of the Plaintiffs. The Notice Program having been administered as called for under the Settlement and required by the Preliminary Approval Order, and the Court having considered all papers filed and proceedings held, and good cause appearing therefore, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that:

         1. This Order incorporates and approves the Agreement and the Settlement set forth therein. Any term not defined herein shall have the meaning ascribed to it as set forth in the Agreement.

         2. Applying the Churchill factors, the Court finds that the Settlement is fair, reasonable and adequate in all material respects.

A. The Plaintiffs do not have a strong case. For members of the class that experienced fraud, they will have to prove that the fraud was a result of the Zappos data breach. For members that have not experienced fraud, they will have to prove that the data breach placed them in imminent risk of harm nearly a decade after the incident occurred. These are substantial burdens.
B. The Plaintiffs' case is risky, complex, expensive, and likely to proceed for many months if not years absent a settlement. Since, the merits are not strong in this case, there is a strong chance for failure. The case raises numerous complex issues including standing, the value of personal information, and liability for the negligent handling of such information. The case has not proceeded far into the discovery phase as it was dismissed under Rule 12, so the case will likely proceed for years at great expense.
C. As this Court has previously noted, the class will experience difficulty in maintaining its class status, since some class members experienced fraud and others did not.
D. The most troubling aspect of the Settlement is the Settlement amount, which is only a 10% coupon. However, a value of $5, 031, 166 has been redeemed as of December 12, 2019 showing that the coupons have a value to the class. Defendant's wide variety of items reinforces this finding.
E. There has been over 160, 000 pages of discovery produced. Therefore, both parties have sufficient information to make informed decisions concerning settlement.
F. The case has not proceeded far into the discovery phase. Nonetheless, the relatively early stage of the proceedings does not weigh heavily against approval of the settlement, becasue the case has been ongoing for seven years.
G. Counsel in this case has significant complex litigation experience and recommends approval of the settlement.
H. As of December 12, 2019, 292, 000 members have redeemed their coupon codes for over five million dollars in discounts; only fifty-three members have filed objections and 177 have opted out.

         3. Applying the In re Bluetooth factors, the Court finds that the Settlement is the product of good faith, ...


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