Parsons v. Kimpton Hotel & Restaurant Group, LLC

Filing 97

ORDER DENYING #89 MOTION FOR PRELIMINARY APPROVAL. Signed by Judge Vince Chhabria on 7/12/2018. (vclc1S, COURT STAFF) (Filed on 7/12/2018)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

ANDREW PARSONS,

Case No. 16-cv-05387-VC

Plaintiff,
ORDER DENYING MOTION FOR
PRELIMINARY APPROVAL

v.
KIMPTON HOTEL & RESTAURANT
GROUP, LLC,

Re: Dkt. No. 89

Defendant.

The motion for preliminary approval of the class settlement is denied, because the motion
is seriously deficient in several respects. The motion is denied is without prejudice to being
refiled. However, any renewed motion must address the following issues:
First, the plaintiffs must explain how many people are expected to file claims (for
instance, by describing settlements that resemble this one). The plaintiffs must also explain the
expected recovery of the typical class member and how they arrived at that estimate. Moreover,
the plaintiffs should better explain how many people's data were compromised by Kimpton
hotels and restaurants. The numbers that plaintiffs' counsel mentioned at the hearing were absent
from their preliminary approval papers. This information is necessary to evaluate whether the
settlement is adequately structured to provide meaningful relief to the people whose personal
information was compromised as a result of the data breach – and whose claims are being
released as a result of this settlement.
Relatedly, the parties must explain the estimated maximum exposure faced by Kimpton
as a result of this data breach, and describe and justify the discount rate that was applied in
arriving at the $600,000 settlement amount. In so doing, the parties must also explain why the

money is not going to a settlement fund so that any money that remains after the initial
distribution of funds can be redistributed to class members or to a cy pres recipient. See
Procedural Guidance for Class Action Settlements, U.S. District Court for the Northern District
of California.
As discussed at the hearing, the proposed claim form appears inadequate as well. It's
difficult to imagine that any rational person would take the time to gather the various documents
needed to prove expenses incurred as a result of their personal information having been
compromised – all for no more than (and likely much less than) $250 in reimbursement. In any
renewed motion, the parties are encouraged to modify the claim form to address these concerns.
If the parties choose instead to justify the claim form as it is written, they must provide detailed
information about similar claim forms used in settlements like this one – including the actual
claim forms approved in other settlements, information about the average recovery per class
member in those settlements, and the percentage of class members who filed viable claim forms
in those cases.
Although these are the most glaring issues with the motion for preliminary approval, they
are not the only ones.
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The parties must explain what would qualify a class member to recover more than $250
under the exception for "extraordinary unreimbursed out-of-pocket monetary losses," and
how many people might be expected to file claims that fall into this category.

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The parties must justify their notice plan, including why notice in People magazine and
on certain websites is superior to other forms of notice used in data breach class
settlements. The parties should consider explaining why these outlets are particularly
likely to reach people who are likely to have visited Kimpton hotels or restaurants. The
parties should also consider whether to list the Kimpton hotels and restaurants affected by
the data breach in their various notices so that people who are not otherwise aware that
they may be class members are informed about this settlement (and relatedly, put on
notice that their personal information may have been compromised).

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The parties must provide a more robust explanation of how this settlement meets the
requirements articulated in In re Hyundai & Kia Fuel Economy Litigation, 881 F.3d 679
(9th Cir. 2018). Specifically, the parties should discuss their choice of law analysis in
greater depth and explain why, in the absence of California law applying nationwide,
differences in state laws do not preclude approval of this settlement.

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The settlement and notice should provide that the requirements for written objections
may be excused upon a showing of good cause, pursuant to this Court's Civil Standing
Order. More generally, the plaintiffs must ensure that their renewed motion complies
with both this Standing Order and the Northern District's Class Action Settlement
Guidance.
The renewed motion for preliminary approval is due within 28 days of this order. The

parties are ordered to file the renewed motion on the docket and to submit it, along with each
proposed notice, in Word document format to [e-mail]. This includes the
Summary Email Notice and any short and long form notices that are part of the parties' notice
plan. The parties may exceed the page limits specified in this Court's Civil Standing Order if
needed.
IT IS SO ORDERED.
Dated: July 12, 2018
______________________________________
VINCE CHHABRIA
United States District Judge

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