IN RE: ZOOM VIDEO COMMUNICATIONS, INC. PRIVACY LITIGATION

Background

This class action alleged that Zoom Video Communications, Inc. improperly shared user data through third-party software, claimed to provide end-to-end encryption when it did not, and failed to prevent disruptions of Zoom meetings by outside actors. The parties settled, and the court approved the class settlement over objections from several class members. Alvery Neace and Sammy Rodgers filed one appeal, and Judith Cohen filed another.

The parties later reached separate settlements with the appealing objectors. Under the Neace/Rodgers settlement, the settlement administrator would use address-correction and forwarding services for returned checks, notify claimants by email when checks were returned, send checks by first-class mail in standard business envelopes, extend the deadline for cashing checks from 90 to 120 days, and make address-change procedures easier to find and use. Under the Cohen settlement, the parties would narrow the settlement release by excluding certain indemnification or contribution claims by a state-licensed professional against Zoom for losses from a confidentiality-breach claim.

In exchange, the objectors agreed to release and not pursue their remaining objections and to dismiss their appeals with prejudice. They and their lawyers could later apply for service payments and attorney’s fees. The proposed service payments could be up to $1,000 each. The lawyers could seek $47,900 for Neace and Rodgers’ counsel and $78,000 for Cohen’s counsel, paid from the court’s earlier award of fees to class counsel.

Legal standard

Federal Rule of Civil Procedure 62.1 allows a district court to issue an indicative ruling on a motion while an appeal is pending and the district court lacks jurisdiction. The court may defer the motion, deny it, or state that it would grant it if the court of appeals remands the case. Rule 23 also requires court approval for consideration given in connection with withdrawing an objection to a class-action settlement.

The court explained that payments to objectors or their lawyers generally require a substantial enhancement to the benefits provided to the class. Fees for objector lawyers must be supported by detailed time records and are evaluated under equitable principles similar to those used for class-counsel fees. The court also noted that service payments and fees would be considered later because payment was not guaranteed under these settlements.

Application and ruling

The court indicatively ruled that it would approve both objector settlements and the modified settlement with the class if the Ninth Circuit remanded the matter. It found that the Neace/Rodgers settlement improved class members’ ability to file claims and receive mailed checks, while the Cohen settlement narrowed the release. The court concluded that these changes benefited the class.

The court also ruled that it would approve the new version of the class settlement on remand. It stated that the changes improved the previously approved settlement and that no new notice to the class was needed because the modifications made the settlement more valuable to class members. The court deferred consideration of the objectors’ service payments and their lawyers’ attorney’s fees.

The order granted the parties’ motion for an indicative ruling. It did not itself finally approve the settlements because an appeal was pending; instead, it stated what the court would do if the Ninth Circuit remanded the matter.