Court Opinion

ID: 6495494
Source: CourtListenerOpinion
Date Created: 2022-06-27 20:00:29.142703+00
Date Added: 2024-06-11T08:45:44.106040
License: Public Domain

NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                            FILED
                            FOR THE NINTH CIRCUIT
                                                                             JUN 27 2022
                                                                         MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS
In re: YAHOO! INC. CUSTOMER                      No.   20-16633
DATA SECURITY BREACH
LITIGATION,                                      D.C. No. 5:16-md-02752-LHK
______________________________

RONALD SCHWARTZ; et al.,                         MEMORANDUM*

              Plaintiffs-Appellees,

AARON MILLER,

              Objector-Appellant,

 v.

YAHOO! INC.; AABACO SMALL
BUSINESS, LLC,

              Defendants-Appellees.

                    Appeal from the United States District Court
                      for the Northern District of California
                      Lucy H. Koh, District Judge, Presiding

                     Argued and Submitted February 16, 2022
                            San Francisco, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: GOULD and RAWLINSON, Circuit Judges, and ZIPPS,** District Judge.

         This appeal stems from a class action complaint alleging that Yahoo! Inc.

and Aabaco Small Business, LLC (collectively, Yahoo) failed to employ sufficient

security measures to protect class members’ personal information, resulting in

multiple data breaches. The data breach impacted approximately 194 million

users.

         The parties reached a settlement agreement, which included the provision of

credit monitoring services, to be administered by AllClear ID. Objector Aaron

Miller (Miller) challenged these services, arguing, in relevant part, that: AllClear

ID is ineffective because it is the subject of numerous consumer complaints, and

the Attorneys’ fees award should be reduced to reflect the actual (lesser) value of

the settlement. The district court overruled Miller’s objections. Miller timely

appealed.

         Miller argues that: (1) the district court failed to analyze prior complaints

against AllClear ID using the appropriate “Higher Standard of Fairness” analysis;

and (2) “the attorneys’ fees awarded should be reduced proportionately to the value

         **
             The Honorable Jennifer G. Zipps, United States District Judge for the
District of Arizona, sitting by designation.
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of the settlement” in light of the limited (true) value amount of the credit

monitoring services.

      A district court may, in its discretion, approve a class action settlement that

is “fair, reasonable, and adequate.” In re Volkswagen “Clean Diesel” Mktg., Sales

Practices, & Prods. Liab. Litig., 895 F.3d 597, 606 (9th Cir. 2018) (citation

omitted). “Appellate review of the district court’s fairness determination is

extremely limited, and we will set aside that determination only upon a strong

showing that the district court’s decision was a clear abuse of discretion.” Lane v.

Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012) (citation and internal quotation

marks omitted).

      1. Miller’s assertion that AllClear ID was ineffective as a credit monitoring

service did not render the settlement inadequate. We have held that “a district

court’s only role in reviewing the substance of [a] settlement is to ensure that it is

fair, adequate, and free from collusion.” Id. at 819 (citation and internal quotation

marks omitted). The district court’s recognition that AllClear ID possessed an A+

rating from the Better Business Bureau, maintained a 96% customer satisfaction

rating, had a 100% success rate in resolving financial identity theft cases, and

supplied credit monitoring to over two million individuals around the world

supported the court’s approval of the settlement. See id.

                                           3
      Miller’s reliance on the purported inadequacy of AllClear ID’s credit

monitoring services also ignores the alternative remedy of cash payouts to

individuals who already have credit monitoring or identity protection, who have

demonstrated out-of-pocket losses, including loss of time, or who paid for Aabaco

Small Business services and Yahoo Mail services.

      2. Miller contends that the value of the credit monitoring services

disproportionately increased the attorneys’ fees award, and urges us to remand this

case to the district court to determine whether the actual value of the credit

monitoring services adequately supports an award of attorneys’ fees to class

counsel. The district court addressed Miller’s concern by agreeing that “the retail

value of the [c]redit [s]ervices should not inflate the Settlement Fund for the

purposes of the attorneys’ fee analysis.” However, the court noted that “most of

the Settlement Class Members have opted for Alternative Compensation” and

“declined to treat the Settlement Fund as larger because of the alleged surplus

value created by Yahoo’s lump sum purchase of the Credit Services.” Under these

circumstances, Miller failed to demonstrate that the district court’s assessment

lacked fairness, was inadequate, or resulted in collusion among the parties. See id.

      AFFIRMED.

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