The Equifax Class Action Settlement

via Unsplash

Nearly two years ago, news broke about a massive data breach at Equifax, one of the major credit reporting bureaus here in the US. The scale of the breach was massive, affecting more than 140 million people. Given the number of people affected (I've occasionally seen reports that the figure represents 44% of the US population), the odds aren't great that one's information wasn't included in the breach. Equifax later reported to the SEC with firmer details about the total numbers of individuals that had certain categories of information stolen. Let's just say that one might not be left in good cheer after seeing the Social Security Number category!

Fast forward to a few days ago, and a settlement has now been preliminarily approved by the court in the class action arising from the Equifax data breach.

Before we go any further, an important disclaimer: Please note that nothing in this post constitutes legal advice and this post does not create an attorney-client relationship. While I am an attorney, I am not your attorney. This post is intended for general informational purposes and entertainment only. All opinions are my own and not those of my employer. 

Back then, I hemmed and hawed for quite some time about whether to freeze my credit or take any steps beyond the CreditKarma membership I already had (which, in my experience, gave me reliable notifications any time a new account popped up on my credit report). I ultimately decided against taking additional action. To be frank, I thought that freezing my credit sounded like too much of a hassle, given that I had some interest in future credit card signup bonus accumulating activities. I never even used that website Equifax made available for checking if one was affected by the data breach! (Back then, I remember some journalists were reporting that said website sometimes gave conflicting answers when they tested the same person's information multiple times.) Gradually, I forgot about the news story. 

The court has now given preliminary approval to a class action settlement arising from the Equifax data breach. A copy of the court's order can be reviewed here, along with certain other key documents from throughout the history of this case.

I imagine that people are leery about going to and trusting what could appear to be a random website when it comes to something like this, so I first looked to the Federal Trade Commission's ("FTC") announcement of the settlement to point me to the settlement administrator's website. On that website, there's a place to check whether one's personal information was affected by the breach, i.e. as the website calls it, to "check your eligibility" and whether "you are a settlement member". Using that feature requires typing in one's surname and the last six digits of one's Social Security Number (which might reasonably have caused me some suspicion if I had not first been directed there by the FTC's website). 

Should one find that their personal information was in fact affected by the data breach (spoiler alert: mine was, making me one of those 140 million-plus affected individuals), there are a few options for next steps to take. Various other places online, including the aforementioned FTC announcement page and also the court-approved notice to class members, are out there to explain those options in more comprehensive detail than I am able to. 

The one detail I wanted to point out is that the settlement-related documents can also provide a good opportunity to learn a few things about class actions, which are a fairly complicated and interesting legal device. One thing I find particularly fascinating, both here and in other class actions, is attorneys' fees as part of a settlement. Specifically, page 13 of the court-approved notice to the class lays out some of the preliminary details currently available regarding potential compensation to the plaintiff class's attorneys (and also the class representatives or named plaintiffs), in advance of the actual motions for attorneys' fees and expenses that will be made to the court at a later date. Specifically, as to attorneys' fees:

Class Counsel have undertaken this case on a contingency-fee basis, meaning they have paid for all of the expenses in the case and have not been paid any money in relation to their work on this case. Accordingly, Class Counsel will ask the Court to award them attorneys’ fees of up to $77,500,000 and reimbursement for costs and expenses up to $3,000,000 to be paid from the Consumer Restitution Fund. The Court will decide the amount of fees and costs and expenses to be paid. You will not have to separately pay any portion of these fees yourself. Class Counsel’s request for attorneys’ fees and costs (which must be approved by the Court) will be filed by 10/29/2019 and will be available to view on the settlement website []

The settlement fund in this case is, per page 1 of the notice document, at least $380.5 million, and according to the FTC, that settlement fund could end up being as much as $425 million, subject to certain conditions.  It's too early yet to know how much class counsel will actually request in fees, as their motion on this issue won't need to be filed until late October. The requested fees could, theoretically, end up being significantly less than the maximum of $77.5 million they've described. 

There are also quite a few other interesting and important things one might learn from reviewing the class notice document closely, in particular about how to opt-out, if needed. That's detailed on pages 13 through 14 of the notice document. The rules about opting out of certain class action settlements, and the implications of said rules, can be particularly difficult to understand, even for a law student or attorney. There are also procedural rules for how class members may object to the settlement, if they wish to do so. 

Have you ever recovered any compensation as a class member in any other class actions? Up to now, I've only known about my class membership in maybe five or six cases total throughout my adult life, most of which I can't even remember the details of anymore. I only recall getting money one time in the past, most likely less than ~$15, from something related to a past computer or external hard-drive purchase (or was it software? I really can't remember). Most recently, I received a notification sometime in the last year or two about a case alleging that J.Crew Factory had deceptive outlet-style pricing (in which J.Crew Factory allegedly claimed fictitious "regular J.Crew"-like "full prices" that the J.Crew Factory prices purportedly represented a discount on), but the only compensation there was a coupon I had no interest in.