T.A.N. v. PNI Digital Media, Inc.

Filing 40

ORDER PRELIMINARILY APPROVING CLASS SETTLEMENT AND CERTIFYING SETTLEMENT CLASS re: #37 Motion. All proceedings in this Action are hereby stayed until further order of the Court, except as may be necessary to implement the terms of the Settlement. Signed by Judge Lisa G. Wood on 6/2/2017. (csr) Modified on 6/22/2017 (ca).

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
BRUNSWICK DIVISION

T.A.N., an individual, and on behalf of all
others similarly situated,
Plaintiff,

Case No. 2:16-cv-132-LGW-RSB

Chief Judge Lisa G. Wood

V.

PNI DIGITAL MEDIA, INC.,

Magistrate Judge R. Stan Baker

Defendant.

ORDER PRELIMINARILY APPROVING CLASS
SETTIEMENT AND CERTTFYING SETTLEMENT CLASS

Plaintiff and PNI Digital Media, Inc. n/k/a PNI Digital Media, ULC ("PNI") have agreed
to a settlement, the terms and conditions of which are set forth in an executed Settlement

Agreement and Release (the "Settlement"). The parties reached the Settlement through
aim's-length negotiations following mediation. Under the Settlement, subject to the terms and
conditions therein and subject to Court approval. Settlement Class Members are eligible to
receive reimbursement of up to $250 (in total) for the following categories of out-pocket

expenses resulting from the Security Incident: (i) unreimbursed bank fees; (ii) unreimbursed card
reissuance fees; (ii) unreimbursed overdraft fees; (iv) unreimbursed charges related to
unavailability of funds; (v) unreimbursed late fees; (vi) unreimbursed over-limit fees; (vii) long
distance telephone charges; (viii) cell minutes (if charged by minute); (ix) intemet usage charges
and text messages; (x) unreimbursed charges from banks or credit card companies; (xi) postage;

(xii) interest on payday loans due to card cancelation or due to over-limit situation; (xiii) up to
three hours of documented lost time (at $15 per hour) spentdealing with replacement card issues

or in reversing fraudulent charges; (xiv) an additional $20 payment for each credit or debit card

on which document fraudulent charges were incurred that were later reimbursed; (xv) costs of

credit report(s); and (xvi) costs ofcredit monitoring and identity theft protection (up to $120).
Class Members who had other extraordinary unreimbursed monetary losses because of

information compromised as a result of the Security Incident are eligible to make a claim for
reimbursement of up to $10,000.

In exchange for these considerations. Plaintiff and the proposed Settlement Class would

fully, finally, and forever resolve, discharge, and release their claims against PNI related to the
Security Incident, which resulted in unauthorized access to customer payment card data and
other personally identifying information, without admission ofliability by PNI. In addition, PNI

has agreed to pay all fees and costs associated with providing notice to the Settlement Class and
for administration of the Settlement. Subject to Court approval, PNI hasalso agreed to payClass

Counsel's attorneys' fees of $650,000, plus reasonable costs and expenses and an incentive
award of $3,750 for the Representative Plaintiff. Such amounts will be paid separately by PNI
andwill not reduce the amount of payments to Class Members who submit valid claims.
The Settlement has been filed with the Court, and Plaintiff and Class Counsel filed an

Unopposed Motion for Preliminary Approval of Class Settlement and for Certification of the
Settlement Class (the "Motion"). Upon considering the Motion and exhibits thereto, the
Settlement, the record in these proceedings, the representations and recommendations of Class

Counsel, and the requirements oflaw, the Court finds that: (1) this Court has jurisdiction over the

subject matter and parties to these proceedings; (2) for settlement purposes only, the proposed
Settlement Class meets the requirements of Federal Rule of Civil Procedure 23 and should be

certified; (3) the persons and entities identified below should be appointed Class Representative
and Class Counsel; (4) the Settlement is the result of informed, good-faith, arm's-length

negotiations between the parties and their capable and experienced counsel and is not the result
ofcollusion; (5) the Settlement is within the range ofreasonableness and should be preliminarily

approved; (6) the proposed Notice Program and proposed forms ofNotice satisfy Federal Rule of
Civil Procedure 23 and constitutional due process requirements, and are reasonably calculated

under the circumstances to apprise the Settlement Class of the pendency of the Action, class
certification, the terms of the Settlement, Class Counsel's application for an award of attorneys'

fees and expenses ("Fee Application") and request for Service Award for Plaintiff, and their
rights to opt-out of the Settlement Class and object to the Settlement, Class Counsel's Fee

Application, and/or the request for Service Award for Plaintiff; (7) good cause exists to schedule
and conduct a Final Approval Hearing, pursuant to Federal Rule of Civil Procedure 23(e), to
assist the Court in determining whether to grant final approval of the Settlement and enter Final

Judgment, and whether to grant Class Counsel's Fee Application and request for Service Award
for Plaintiff; and (8) the other related matters pertinent to the preliminary approval of the
Settlement should also be approved.

Based onthe foregoing, IT IS HEREBY ORDERED AND ADJUDGED asfollows:
1.

As used in this Order, capitalized terms shall have the defmitions and meanings

accorded to them in the Settlement.

2.

The Court has jurisdiction over the subject matter and parties to this proceeding

pursuant to 28 U.S.C. § 1332.

3.

Venue is proper in this District.

Provisional Class Certification and APDointment of Class Representatives and Class
Counsel

4.

In deciding whether to provisionally certify a settlement class, a court must

consider the same factors that it would consider in connection with a proposed litigation class -

i.e., all Rule 23(a) factors and at least one subsection of Rule 23(b) must be satisfied - except
that the Court need not consider the manageability of a potential trial, since the settlement, if

approved, would obviate the need for a trial. See Amchem Products. Inc. v. Windsor, 521 U.S.
591, 620 (1997); Cotton v. Hinton. 559 F.2d 1326, 1331 (5th Cir. 1977); Columbus Drvwall &
Insulation. Inc. v. Masco Corp.. 258 F.R.D. 545, 553-54 (N.D. Ga. 2007).

5.

The Court finds, for settlement purposes only, that the Federal Rule of Civil

Procedure 23 factors are present and that certification of the proposed Settlement Class is

appropriate under Rule 23. The Court, therefore, provisionally certifies the following Settlement
Class:

All persons residing in the United States who made a payment to
one or more Retailers using a credit, debit, or other payment card
between June 2014 through and including July 2015, and whose
payment card information was provided to PNI.

6.

Specifically, the Court finds, for settlement purposes only, that the Settlement

Class satisfies the following factors of Federal Rule of Civil Procedure23:

(a)

Numerositv: In the Action there are hundreds of thousands of Class

members across the United States. Their joinder is impracticable. Thus, the Rule 23(a)(1)

numerosity requirement is met. See Kileo v. Bowman Transp.. Inc.. 789 F.2d 859, 878 (11th
Cir.1986); Columbus Drvwall & Insulation. 258 F.R.D. at 554.

(b)

Commonality: The bar for proving commonality is met when there is at

least one issue whose resolution will affect all or a significant number of the putative class
members. See Williams v. Mohawk Industries. 568 F.3d 1350, 1355 (11th Cir. 2009). Here, the

commonality requirement is satisfied for settlement purposes because there are many questions
of law and fact common to the Settlement Class regarding PNPs Security Incident. S^ Fed. R.
Civ. P. 23(a) (2). There are multiple questions of law and fact that center on whether PNI was

culpable in failing to prevent the Security Incident, which are common to the Settlement Class.
(c)

Typicality:

Plaintiff is typical of absent Settlement Class Members

because she was subjected to the same PNI conduct, had her information placed at risk in the
same manner as all Class members, and because she will also benefit from the reliefprovided by

the Settlement. Rule 23(a)(3) is therefore satisfied.

Komberg v. Carnival Cruise Lines. Inc.,

741 F.2d 1332, 1337 (11th Cir. 1984) (typicality satisfied where claims "arise from the same

event orpattern or practice and are based on the same legal theory"); Murray v. Auslander, 244
F.3d 807, 811 (11th Cir. 2001) (named plaintiffs are typical of the class where they "possess the
same interest and suffer the same injury as the class members").

(d)

Adequacy. Adequacy under Rule 23(a)(4) relates to: (1) whether the

proposed class representative has interests antagonistic to the Settlement Class; and (2) whether
the proposed class counsel has the competence to undertake the litigation at issue.

In re

Piedmont Office Trust Inc. Sec. Litig.. 264 F.R.D. 693, 699 (N.D. Ga. 2010). Rule 23(a)(4) is
satisfied here because there are no conflicts of interest between the Plaintiff and the Settlement

Class, and Plaintiff has retained competent counsel to represent her and the Settlement Class.

Class Counsel here regularly engages in consumer class litigation and other complex litigation

similar to the present Action, and have dedicated substantial resources to prosecuting the Action.
Moreover, the Plaintiff and Class Counsel have vigorously and competently represented the
Settlement Class Members' interests in the Action.

(e)

Predominance and Superiority: Rule 23(b)(3) is satisfied for settlement

purposes, as well, because the common legal and alleged factual issues here predominate over
individualized issues, and resolution of the common issues for thousands of Settlement Class

Members in a single, coordinated proceeding is superior to many individual lawsuits addressing

the same legal and factual issues. With respect to predominance, Rule 23(b)(3) requires that "the

questions of law or fact common to class members predominate over any questions affecting
only individual members, and a class action is superior to other available methods for fairly and
efficiently adjudicating the controversy." Fed. R. Civ. P. 23(b)(3);

Sacred Heart Health Svs.,

Inc. V. Hiimana Military Healthcare Servs.. Inc., 601 F.3d 1159, 1170 (11th Cir. 2010). Based on

the record currently before the Court, the predominance requirement is satisfied here for

settlement purposes because common questions present a significant aspect of the case and
because class-wide relief can fairly be provided for all Settlement Class Members through a
single common judgment.

7.

The Court appoints the following person as Class Representative: Tamara A.

Nedlouf.

8.

The Court appoints the following persons and entities as Class Counsel who shall

be responsible for handling all Settlement-related matters on behalf of Plaintiff and the
Settlement Class:

James B. Durham, Esq.
HALL BOOTH SMITH, P.O.
3528 Darien Highway, Suite 300
Brunswick, Georgia 31525
Telephone: [phone]
E. Adam Webb, Esq.
WEBB, KLASE & LEMOND, LLC
1900 The Exchange SE, Suite 480
Atlanta, OA 30339

Telephone: [phone]
Preliminarv Approval of the Settlement

9.

At the preliminary approval stage, the Court's task is to evaluate whether the

Settlement is within the "range of reasonableness." 4 Newberg on Class Actions. § 11.26 (4th

ed. 2010). Preliminary approval is appropriate where the proposed settlement is the result of the

parties' good faith negotiations, there are no obvious deficiencies, and the settlement falls within
the range of reason. Settlement negotiations that involve arm's-length, informed bargaining with

the aid of experienced counsel support a preliminary finding of fairness.

Manual for

Complex Litigation. § 30.42 (3rd ed. 1995) ("A presumption of fairness, adequacy, and
reasonableness may attach to a class settlement reached in arm's-length negotiations between

experienced, capable counsel after meaningful discovery.") (intemal quotation marks omitted).
10.

The Court preliminarily approves the Settlement, and the exhibits appended to the

Motion, as fair, reasonable, and adequate. The Court finds that the Settlement was reached in the

absence of collusion, and is the product of informed, good-faith, arm's-length negotiations
between the parties, and their capable and experienced counsel under the supervision of a

mediator. The Court further finds that the Settlement, including the exhibits appended to the
Motion, is within the range of reasonableness and possible judicial approval, such that: (a) a

presumption of fairness is appropriate for the purposes of preliminary settlement approval; and
(b) it is appropriate to effectuate notice to the Settlement Class, as set forth below and in the
Settlement, and schedule a Final Approval Hearing to assist the Court in determining whether to

grant Final Approval to the Settlement and enter final judgment.
Approval of Notice and Notice Program and Direction to Effectuate Notice

11.

The Court approves the form and content of the Notice to be provided to the

Settlement Class, substantially in the forms appended as Exhibits C - D to the Motion. The

Court further finds that the Notice Program, described in Section 3 of the Settlement, is the best

practicable under the circumstances. The Notice Program is reasonably calculated under the
circumstances to apprise the Settlement Class of the pendency of the Action, class certification.

the terms of the Settlement, and their rights to opt-out of the Settlement Class and object to the

Settlement, Class Counsel's fee request, and the request for Service Award for Plaintiff. The

Notice and Notice Program constitute sufficient notice to all persons entitled to notice. The
Notice and Notice Program satisfy all applicable requirements oflaw, including, but not limited
to. Federal Rule of Civil Procedure 23 and the constitutional requirement of due process.
12.

The Court directs that Epic Systems, Inc. act as the Settlement Administrator.

13.

The Settlement Administrator shall implement the Notice Program, as set forth

below and in the Settlement, using substantially the forms of Notice appended as Exhibits C - D

to the Motion and approved by this Order. Notice shall be provided to the Settlement Class

Members pursuant to the Notice Program, as specified in Section 3 of the Settlement and

approved by this Order. The Notice Program shall include a postcard notice to be mailed to
settlement class members and a long form notice to bemade available onthe Settlement Website

and upon request as set forth inthe Settlement, the exhibits appended to the Motion, and below.
Notice Program

14.

The Settlement Administrator shall administer the Notice Program. Within the

time frames described in the Settlement Agreement, the Settlement Administrator shall send an
email to all such Settlement Class Members.

15.

In circumstances where a working email address is not available. Settlement Class

Counsel and PNI shall provide the names and addresses provided when the Settlement Class
Members conducted transactions with the Retailers to the Settlement Administrator so that notice
can be delivered via mail.

16.

As set forth in the Settlement Agreement, the Notice Program shall commence

within 30 days ofthe Preliminary Approval Order and shall be completed within 45 days of the
Preliminary Approval Order,

17.

Within seven days after the date the Settlement Administrator completes the

Notice Program, the Settlement Administrator shall provide Class Counsel and PNFs counsel an
affidavit that confirms that the Notice Program was completed in a timely manner. Class
Counsel shall file such affidavit with the Court in conjunction with Plaintiffs Motion for Final
Approval of the Settlement.

18.

All fees and costs associated with the Notice Program shall be paid by PNI, as set

forth in the Settlement.

Settlement Website and Toll-Free Settlement Line

19.

The Settlement Administratorshall establish a Settlement Website as a means for

Settlement Class Members to obtain notice of, and information about, the Settlement. The

Settlement Website shall be established as soon as practicable following Preliminary Approval,

but no later than 30 days of the Preliminary Approval Order. The Settlement Website shall

include hyperlinks to the Settlement, the Long Form Notice, this Order, and such other
documents as Settlement Class Counsel and counsel for PNI agree to post or that the Court

orders posted on the Settlement Website. These documents shall remain on the Settlement
Website at least until Final Approval.
20.

The Settlement Administrator shall establish and maintain a toll-free telephone

line for Settlement Class Members to call with Settlement-related inquiries, and shall answer the

questions of Settlement Class Members who call with or otherwise communicate such inquiries.

21.

Epiq Systems, Inc. is directed to perform all other responsibilities imder the

Notice Program assigned to the SettlementAdministrator in the Settlement.

22.

Hilsoft Notifications is directed to perform all other responsibilities under the

Notice Program assigned to the Notice Administrator in the Settlement.
Final Approval Hearing. Qpt-Outs. and Objections

23.

The Court directs that a Final Approval Hearing shall be scheduled for the date

and time set forth in paragraph 31(viii) to assist the Court in determining whether to grant Final

Approval to the Settlement and enter the Final Approval Order and Judgment, and whether Class
Counsel's Fee Application and request for a Service Award for Plaintiff should be granted.
24.

The Court directs that any person within the Settlement Class definition who

wishes to be excluded from the Settlement Class may exercise his or her right to opt-out of the
Settlement Class by following the opt-out procedures set forth in the Long Form Notice at any

time during the Opt-Out-Period and the Settlement Agreement. To be valid and timely, opt-out

requests must be postmarked no later thanone hundred twenty (120) days after the date on which
the Notice Program commences; must be mailed to the address indicated in the Long Form
Notice.

The Opt-Out Deadline established under Section 4.1 of the Settlement Agreement shall
be specified in the Mailed Notice, Long Form Notice, and Settlement Website. All persons
within the Settlement Class definition who do not timely and validly opt-out of the Settlement

Class shall be bound by all determinations and judgments in the Action concerning the
Settlement, including, but not limited to, the Releases set forth in Section 6 of the Settlement if
the Settlement is finally approved.

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25.

The Court further directs that any person in the Settlement Class who does not

opt-out ofthe Settlement Class may object to the Settlement, Class Counsel's Fee Application
and/or the request for Service Award for Plaintiff. Any such objections must be mailed to the
Clerk of the Court, Settlement Class Counsel, and coxmsel for PNI, at the addresses indicated in

the Long Form notice. For an objection to be considered by the Court, the objection must be

postmarked no later than the Opt-Out Deadline of one hundred twenty (120) days from the date
on which theNotice Program commences andmust include the following information:

(i)

the objector's full name, address, telephone number, and e-mail address (ifany);

(ii)

information identifying the objector as a Settlement Class Member, including any
documentary proofthat the objector is a member of the Settlement Class (e.g.,
copy of notice, copy of original notice of the Security Incident);

(iii)

a written statement of all grounds for the objection, accompanied by any legal
support for the objection the objector believes applicable;

(iv)

the identity/ies of all counsel representing the objector;

(v)

a statement confirming whether the objector intends to personally appear and/or
testify at the Final Fairness Hearing;

(vi)

the identity/ies of all counsel representing the objector who will appear at the
Final Fairness Hearing;

(vii)

a list of all persons who will be called to testify at the Final Fairness Hearing in
support of the objection;

(viii) the objector's signature and the signature of the objector's duly authorized
attorney or other duly authorized representative (along with documentation setting
forth such representation);

(ix)

a list, by case name, court, and docket number, of all other cases in which the
objector (directly or through counsel) has filed an objection to any proposed class
action settlement within the last 3 years;

(x)

a list, by case name, court, and docket number, of all other cases in which the
objector's counsel (on behalfof any personor entity) has filed an objection to any
proposed class action settlementwithin the last 3 years; and

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(xi)

a list, by case name, court, and docket number, of all other cases in which the
objector has beena named plaintiff in any class action or served as a lead plaintiff
or class representative.

An objection shall be deemed to have been submitted when mailed, provided it is received with a
postmark date indicated on the envelope of at least one hundred twenty (120) days from the date
on which the Notice Program commences, mailed first-class postage prepaid, and addressed in
accordance with the instructions in the Settlement and Long Form Notice.
Further Papers in Support of Settlement and Fee APDlication

26.

Plaintiff and Class Counsel shall file their Motion for Final Approval of the

Settlement, Request for Service Awards for Plaintiff, and Fee Application no later than 28 days
before the Final Approval Hearing.

27.

Plaintiff and Class Coimsel shall file their responses to timely filed objections to

the Motion for Final Approval of the Settlement and the Fee Application no later than 14 days

before Final Approval Hearing. If PNIchooses to file a response to timely filed objections to the
Motion for Final Approval of the Settlement, it also must do so no laterthan 14days before Final
Approval Hearing.
Effect of Failure to Approve the Settlement or Termination

28.

In the event the Settlement is not approved by the Court, or for any reason the

Parties fail to obtain a Final Approval Order and Judgment as contemplated in the Settlement, or
the Settlement is terminated pursuant to its terms for any reason, then the following shall apply:

(a)

All orders and findings entered in connection with the Settlement shall

become null and void and have no further force and effect, shall not be used or

referred to for any purposes whatsoever, and shall not be admissible or
discoverable in any other proceeding;

(b)

All of the Parties' respective pre-Settlement claims and defenses will be

preserved;

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(c)

Nothing contained in this Order is, or may be construed as, any admission

or concession by or against PNI or Plaintiffon any point of fact or law; and

(d)
Neither the Settlement terms nor any publicly disseminated information
regarding the Settlement, including, without limitation, the Notice, court filings,
orders and public statements, may be used as evidence. In addition, neither the
fact of, nor any documents relating to, either party's withdrawal from the
Settlement, any failure of the Court to approve the Settlement, and/or any
objections or interventions may be used as evidence.
Stay/Bar of Other Proceedings

29.

All proceedings in the Action are hereby stayed until further order of the Court,

except as may be necessary to implement the terms of the Settlement.

Pending final

determination of whether the Settlement should be approved. Plaintiff, all persons in the

Settlement Class, and persons purporting to act on their behalfare enjoined from commencing or

prosecuting (either directly, representatively, or in any other capacity) against any of the
Released Parties any action or proceeding in any court assertingany of the Released Claims.
30.

Based on the foregoing, the Court sets the following schedule for the Final

Approval Hearing and the actions which must precede it:

(i)

The Settlement Administrator shall establish the Settlement Website and
toll-free telephone line as soon as practicable following Preliminary
Approval, but no later than thirty (30) days after the date of this order;

(ii)

The Settlement Administrator shall complete the Mailed Notice Program
no later than no later than forty-five (45) days after the date of this order;

(iii)

Settlement Class Members must file any objections to the Settlement no
later than one hundred twenty (120) days from the date on which the
Notice Program commences;

(iv)

Settlement Class Members must file requests for exclusion firom the
Settlement by no later than one hundred twenty (120) days from the date
on which the Notice Program commences;

(v)

Plaintiff and Class Counsel shall file their responses to timely filed
objections to Settlement no later than fourteen (14) days before the Final
Approval Hearing;

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(vi)

If PNI chooses to file a response to timely filed objections to Settlement, it
shall do so no later than fourteen (14) days before the Final Approval
Hearing;

(vii)

Plaintiff and Class Counsel shall file their Motion for Final Approval of
the Settlement, Request for Service Award for Plaintiff and Fee
Application no later than twenty-eight (28) days before the Final Approval
Hearing; and

(viii) The Final Approval Hearing will be held on November, 17, 2017, at
10:00 a.m. in Courtroom 1 of the Brunswick Courthouse, 801 Gloucester
Street, Brunswick, OA 31520.

DONE AND ORDERED this

2"** day of June 2017.

HONORABLE LISA G. WOOD
UNITED STATES DISTRICT JUDGE
SOUTHERN DISTRICT OF GEORGIA

cc:

All Counsel of Record

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