IN RE: ZOOM VIDEO COMMUNICATIONS, INC. PRIVACY LITIGATION

Background

The plaintiffs alleged that Zoom Video Communications, Inc. improperly shared user data through third-party software-development kits, claimed to use 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 settlement over objections from several class members.

Two groups of objectors—Alvery Neace and Sammy Rodgers, and Judith Cohen—later settled their objections with the parties. The agreements modified the class settlement and allowed the objectors to seek attorney’s fees, costs, and incentive awards. The objectors agreed to release their objections and dismiss their appeals with prejudice. The court approved the objector settlements and the modified class settlement after a remand from the Ninth Circuit.

Motions and Settlement Changes

Judith Cohen requested $77,153 in attorney’s fees, $847 in costs, and a $1,000 incentive award. Her settlement added a provision excluding certain indemnification or contribution claims by state-licensed professionals from the settlement’s release. Those claims concerned losses tied to confidentiality lawsuits based on allegations that Zoom’s encryption was not end-to-end encryption when the professional understood that it was.

Neace and Rodgers requested $47,395 in attorney’s fees, $505 in costs, and $1,000 incentive awards for each of them. Their agreement provided for several claims-administration changes, including easier address updates, email notification and address correction for returned checks, use of standard business envelopes, and extending the time to cash checks from 90 days to 120 days.

Legal Standard

Federal Rule of Civil Procedure 23(e)(5)(B)(i) requires court approval of consideration provided for withdrawing an objection to a class-action settlement. Such consideration may include incentive awards and attorney’s fees and costs for objectors’ counsel.

The court explained that approval requires the objector to have substantially enhanced the settlement’s benefits to the class. A benefit need not be financial, but a nonfinancial benefit must be more than technical or coincidental. Minor procedural changes generally do not qualify. The benefit must also be worth more than the fees sought, and fees should not be awarded for duplicative work or arguments that provide no unique benefit.

The court determined that it had jurisdiction to decide the motions even though an unnamed class member had filed a notice of appeal. Although an appeal generally removes a trial court’s authority over matters involved in the appeal, the court retained authority to decide a fee request attributable to the case.

Court’s Analysis

The court held that Cohen enhanced the class’s benefits, but not substantially. It distinguished cases in which objectors narrowed overbroad releases affecting the entire class or corrected language that threatened the settlement’s validity. Cohen’s amendment affected only a narrow subset of the class and addressed an issue too minor to make the settlement vulnerable to reversal on appeal. The court therefore denied Cohen’s motion.

The court also held that Neace and Rodgers did not substantially enhance the settlement’s benefits. It found that some changes were technical or coincidental because the settlement administrator had already planned to correct addresses and use standard business envelopes. The remaining changes were minor and procedural and concerned only a narrow group of class members who received payments by mail. The court therefore denied their motion.

Disposition

The court denied the settling objectors’ motions for attorney’s fees, costs, and incentive awards, resolving ECF Nos. 262 and 263. The order was entered by United States Magistrate Judge Laurel Beeler on February 23, 2023.