In re Warner Music Group Data Breach

Background

Warner Music Group owns and operates record labels, a music publisher, and websites that sell merchandise and music. The opinion states that Warner announced that a “magecart” hack between April 25, 2020, and August 5, 2020, obtained customers’ identification and credit-card information from its online shopping platform.

The first complaint was filed on September 11, 2020. It asserted negligence, negligence per se, invasion of privacy, unjust enrichment, and a violation of New York General Business Law § 349. Eight related complaints followed, and the court consolidated the nine cases for all purposes under the caption In re Warner Music Group Data Breach.

Competing Leadership Requests

Plaintiffs Levi Combs and Christie Kuhn moved to appoint Gayle Blatt and Jean Martin as interim co-lead class counsel. Interim counsel is a temporary leadership arrangement that acts for a proposed class before the court decides whether to certify the case as a class action. Combs and Kuhn also proposed an executive committee made up of attorneys from several firms.

Plaintiff Noah Watts moved to appoint William B. Federman as interim co-lead counsel or, alternatively, as a member of the proposed executive committee. Plaintiff Alexander Buck later submitted a brief supporting Federman’s appointment.

Court’s Analysis

Federal Rule of Civil Procedure 23(g) permits a court to appoint interim counsel before deciding whether to certify a class. The court considered the counsel’s investigation and work on the case, experience with class actions and complex litigation, knowledge of the applicable law, and resources available to represent the proposed class.

The court found that the relevant experience, knowledge, and resources factors did not favor either application because all of the attorneys seeking appointment were experienced in class actions, including data-breach cases, and had committed sufficient resources. The court found that Blatt and Martin had the advantage because they were the first to file a complaint and had worked to consolidate the related cases, coordinate with other plaintiffs’ attorneys, and communicate with Warner customers. The court also rejected the argument that their lack of New York bar membership required denial of their application.

Regarding the executive committee, the court concluded that committees can reduce efficiency, increase costs, and duplicate work. At that stage, the court found it was not clear that a leadership structure beyond two co-lead counsel was necessary.

Disposition

The court granted Combs and Kuhn’s motion to appoint Gayle Blatt and Jean Martin as interim co-lead counsel. It denied Combs and Kuhn’s motion to appoint the proposed executive committee. It also denied Watts’s motion to appoint William B. Federman as interim co-lead counsel or, alternatively, to an executive committee.

The court set March 19, 2021, as the deadline for filing a consolidated complaint and April 9, 2021, as the deadline for Warner to answer or otherwise respond. It adjourned the February 25, 2021, initial pretrial conference without setting a new date and directed the clerk to terminate the listed motions. The order addressed case-management and attorney-appointment issues, not the merits of the underlying data-breach claims.