Adkins v. Facebook, Inc.

Background

A coding error on Facebook’s platform allowed hackers to obtain access tokens and enter accounts, potentially exposing the personal information of millions of users in the United States. At least ten civil actions were filed and consolidated. The case initially asserted ten claims and sought credit monitoring, damages, and declaratory relief.

The court previously declined to certify a damages class but allowed a class seeking injunctive relief. By the time of settlement, most claims had been dismissed, no individual damages claims had been filed, and only one named class representative remained from the eleven plaintiffs involved after consolidation.

The settlement required Facebook to maintain specified security measures related to access tokens and to submit to independent monitoring. The measures included integrity checks, detection of suspicious access-token activity, incident-containment procedures, security assessments, logging, and other controls. The settlement provided no monetary damages or individualized credit monitoring for class members. It also preserved class members’ ability to pursue damages claims independently.

Settlement approval

Under Federal Rule of Civil Procedure 23(e), a court must approve a class settlement that binds absent class members only after adequate notice, a hearing, and a finding that the settlement is fair, reasonable, and adequate. The court found that the approved notice plan had been completed and that notice was adequate.

The court approved the final settlement. It considered the strength of the claims, the risks and expense of continued litigation, the procedural history, discovery, and the class members’ response. One person objected, but the court found no reason to deny approval, including because the objector remained free to pursue a damages claim independently.

The court described the settlement’s benefit as modest. It noted that Facebook had already adopted, or likely would have adopted, most of the security measures, and that the settlement’s main new feature was court, class-counsel, and independent-monitor involvement in ensuring that Facebook maintained them. The court nevertheless found the settlement adequate given the probable merits, limited surviving claims, limited class certification, and risks of further litigation.

Attorney’s fees and costs

Class counsel requested $10,700,000 in attorney’s fees based on a 1.253 multiplier, $1,210,900.75 in costs, $15,000 for a data-security monitor, and a $5,000 service award for Stephen Adkins.

The settlement defined “Class Counsel” as John Yanchunis of Morgan & Morgan Complex Litigation Group, Ariana Tadler of Tadler Law LLP, and Andrew Friedman of Cohen Milstein Sellers & Toll PLLC. The court held that only these appointed class-counsel firms could recover fees, costs, and expenses under the settlement. It ruled that lawyers from the other firms involved in the earlier stages could not have their work included in the fee calculation because they had not been appointed as class counsel.

The court also questioned the reasonableness of some class counsel expenses, including the cost of flying twenty attorneys to a two-hour meeting and $5,643.06 in hotel costs for one attorney. It directed the special master to review the entire lodestar—the calculation of fees based generally on reasonable hours multiplied by reasonable rates—and reduce it to a reasonable amount. Because the settlement’s results were limited, the court allowed reasonable time incurred by class counsel but did not allow a bonus or multiplier.

Service award and disposition

The court found the requested $5,000 incentive award for Adkins unreasonably high. It stated that $500 was reasonable compensation for his vacation time, travel to proceedings, and participation in discovery, including a forensic examination of his phone.

The final settlement was approved. Class counsel’s fee motion was granted in part as to the entitlement of class counsel, and denied as to amount. The special master was directed to recalculate fees and costs to a reasonable sum under the court’s analysis and a companion order.