In re UKG Inc. Cybersecurity Breach Litigation, No. 3:2022cv00346 - Document 80 (N.D. Cal. 2023)
Court Description: ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND MOTION FOR ATTORNEYS' FEES, COSTS, SETTLEMENT ADMINISTRATION EXPENSES, AND CLASS REPRESENTATIVE SERVICE AWARDS granting in part and denying in part 77 Motion to Certify Class. (Illston, Susan) (Filed on 11/21/2023)
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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 WILLIAM MULLER, et al., Plaintiffs, 8 12 ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND MOTION FOR ATTORNEYS' FEES, COSTS, SETTLEMENT ADMINISTRATION EXPENSES, AND CLASS REPRESENTATIVE SERVICE AWARDS 13 Re: Dkt. Nos. 76, 77 9 10 11 United States District Court Northern District of California Case No. 22-cv-00346-SI v. UKG INC., Defendant. 14 15 On November 17, 2023 Plaintiffs William Muller, Antonio Knezevich, Adam Bente, and 16 Cindy Villanueva (“Plaintiffs”) Motion for Final Approval of Class Action Settlement (the 17 “Motion”) and Motion for Attorneys’ Fees was heard before the Court. The Court has considered 18 Plaintiffs’ Motion, the Class Action Settlement Agreement and Release between the Plaintiffs and 19 Defendant UKG, Inc. (“Defendant” or “UKG”) (collectively the “Parties”) (the “Settlement” or 20 “Settlement Agreement”), all declarations and other evidence submitted in support of the motions, 21 22 23 24 25 26 27 28 and any argument submitted at the hearing on the motions, and hereby ORDERS, ADJUDGES, AND DECREES: 1. Unless defined herein, all terms in this Order shall have the respective meanings ascribed to them in the Settlement Agreement. 2. On June 2, 2022, the Court entered a Preliminary Approval Order (Dkt. No. 74), that certified the Settlement Class, preliminarily approved the Settlement Agreement, directed notice of the proposed settlement to the Settlement Class, and established a hearing date to consider the final 1 approval of the Settlement Agreement, the request for Service Awards to the Settlement Class 2 Representatives (the “Service Awards Request”), and the motion for attorneys’ fees, costs and 3 expenses (the “Fee Request”). 4 3. In the Preliminary Approval Order, the Court approved the class notice and plan, and 5 found that the class notice provides the best practicable notice to the Class. A declaration has been 6 filed with the Court confirming that the notice has been emailed and mailed to members of the 7 Exfiltration Class, and to the extent that employers opted into providing contact information, and 8 otherwise distributed via advertisements pursuant to the class notice and plan. Further, a declaration 9 confirming that notice has been distributed pursuant to the Class Action Fairness Act, 28 U.S.C. § 10 United States District Court Northern District of California 11 12 1715 has been filed with the Court. 4. The Court finds that the distribution of the Notice has been achieved in accordance with the Preliminary Approval Order and the Settlement Agreement. 13 5. The class notice and plan provided the best notice practicable under the circumstances to 14 the Settlement Class Members and fully satisfied the requirements of due process under the United 15 States Constitution and Federal Rule of Civil Procedure 23. Based on the evidence and information 16 supplied to the Court in connection with the Final Approval Hearing held on November 17, 2023, 17 the Court finds that the Notice was adequate and reasonable. The Court further finds that through 18 the Notice, the Settlement Class has been apprised of the nature and pendency of the Action, the 19 terms of the Settlement Agreement, as well as their rights to request exclusion, object, and/or appear 20 at the final approval hearing. 21 6. The Court finds that Defendant has complied with the requirements of 28 U.S.C. § 1715. 22 7. The Court finds that the Plaintiffs are similarly situated to absent Settlement Class 23 Members, are typical of the Class, and are adequate Settlement Class Representatives, and that Class 24 Counsel and the Settlement Class Representatives have fairly and adequately represented the 25 Settlement Class. The Court grants final approval to its appointment of Class Counsel and 26 Settlement Class Representatives as provided in the Preliminary Approval Order at ¶¶ 7-8 (ECF No. 27 74), appointing Michael S. Morrison and Erin Lim of Alexander Morrison + Fehr LLP; Dimitrios 28 Korovilas and Jason Wucetich of Wucetich & Korovilas LLP; Ronald A. Marron, Alexis M. Wood, 2 United States District Court Northern District of California 1 and Kas L. Gallucci of Law Offices of Ronald A. Marron; and Jonathan M. Lebe and Zachary T. 2 Gershman of Lebe Law, APLC as Class Counsel for settlement purposes., and appointing as 3 Settlement Class Representatives Plaintiffs William Muller, Antonio Knezevich, Adam Bente and 4 Cindy Villanueva as the Class Representatives. 5 8. The Court certifies the following Classes1 under Fed. R. Civ. P. 23(a) and 23(b)(3): 6 Nationwide Class: All natural U.S. persons who are current or former employees or 7 contractors, including their dependents, of UKG customers, whose data was stored in the 8 KPC at the time of the December 2021 KPC Cyberattack and who were impacted by the 9 interruption of KPC applications resulting from the December 2021 KPC Cyberattack. 10 California Subclass: Consisting of all members of the Settlement Class who were also 11 California residents at the time of the December 2021 KPC Cyberattack; and 12 Exfiltration Subclass: Consisting of all members of the Nationwide Class who were sent 13 notice that their personal data was exfiltrated during the December 2021 KPC Cyberattack 14 and were offered credit monitoring services for themselves or on behalf of their dependents. 15 9. The Court finds that the Settlement Class defined above satisfies the requirements of Fed. 16 R. Civ. P. 23(a) and (b)(3) in that: (a) the Settlement Class is so numerous that joinder of all 17 Settlement Class Members would be impracticable; (b) there are issues of law and fact that are 18 common to the Settlement Class; (c) the claims of the Settlement Class Representatives are typical 19 of and arise from the same operative facts and seek similar relief as the claims of the Settlement 20 Class Members; (d) the Settlement Class Representatives and Class Counsel have fairly and 21 adequately protected the interests of the Settlement Class, as the Settlement Class Representatives 22 have no interest antagonistic to or in conflict with the Settlement Class and have retained 23 experienced and competent counsel to prosecute this matter on behalf of the Settlement Class; (e) 24 questions of law or fact common to Settlement Class Members predominate over any questions 25 26 27 28 Excluded from the Classes are UKG’s officers, directors, and employees; any entity in which UKG has a controlling interest; and the affiliates, legal representatives, attorneys, successors, heirs, and assigns of UKG. Excluded also from the Settlement Class are members of the judiciary to whom this case is assigned, their families and members of their staff. Also excluded from the Settlement Class are non-natural persons. 3 1 United States District Court Northern District of California 1 affecting only individual members; and (f) a class action and class settlement are superior to other 2 methods available for a fair and efficient resolution of this controversy. 3 10. The Court approves the settlement of the Action as set forth in the Settlement Agreement 4 and finds that the settlement meets the requirements of Federal Rule of Civil Procedure 23(e)(2) and 5 is in all respects fair, reasonable, adequate and is in the best interests of the Settlement Class 6 Members. 7 A. The Court finds that the Settlement Class Representatives and Class Counsel have 8 adequately represented the Class. 9 B. The Court further finds that the Settlement Agreement was the product of an arm’s-length 10 negotiation conducted in good faith by the Parties and their experienced counsel, with the 11 assistance of an experienced mediator. 12 C. The Court finds that the relief provided to the Class is adequate taking into account: the 13 costs, risks, and delay of trial and appeal; the effectiveness of the proposed method of 14 distributing relief to the Class; and the terms of the proposed attorneys’ fees. 15 D. The Court finds the Settlement Agreement treats Settlement Class Members equitably to 16 each other based on the alleged injuries to each of the Classes, and that all Settlement Class 17 Members as well as the general public will be benefitted by Defendant’s additional security 18 mechanisms put into place. 19 11. The Court finds that the Parties faced significant risks, expenses, delays, and 20 uncertainties, including as to the outcome of continued litigation, in this Court or on appeal, of this 21 complex matter, which further supports the Court’s finding that the Settlement Agreement is fair, 22 reasonable, adequate and in the best interests of the Settlement Class Members. The Court finds that 23 the uncertainties of continued litigation in both the trial and appellate courts, as well as the expense 24 associated with it, weigh in favor of approval of the settlement reflected in the Settlement 25 Agreement. 26 12. The Court recognizes that there have been no objections to this Settlement by Settlement 27 Class Members, and a total of four valid exclusions by Class Members whose claims will not be 28 released by this settlement: Record Identification 4 Numbers 687441M9D4YNT, 1 2 13. Each Settlement Class Member, whether or not such Settlement Class Member executes 3 and delivers a valid claim, is bound by this Judgment, including, without limitation, the release of 4 claims as set forth in the Settlement Agreement. 5 6 United States District Court Northern District of California 687441MBGKNQQ, 687443PJRW2B1, and 687444QVXKC3Z. 14. The Court directs the Parties to perform in accordance with the terms of the Settlement Agreement and the Orders of this Court. 7 15. Upon the Effective Date, and in consideration of the Settlement benefits as described in 8 the Settlement Agreement, each of the Settlement Class members including the Class 9 Representatives, and each of their respective heirs, executors, administrators, representatives, 10 agents, partners, successors, and assigns shall be deemed to have released, acquitted, and forever 11 discharged any and all Released Claims against Defendant. Released Claims means any and all 12 claims, demands, actions, and causes of action that each and every Settlement Class Member has, 13 had, or may ever have, now or in the future, known or unknown, suspected or unsuspected, fixed or 14 contingent, accrued or unaccrued, arising out of or in any way related to the December 2021 KPC 15 Cyberattack based on the allegations in the operative complaint, which includes the resulting 16 interruption of Released Parties’ products and services, and also, includes all claims or causes of 17 action stemming from statutory, contractual, or common law rights under which the Settlement 18 Class Members could seek to recover for any impact of the December 2021 KPC Cyberattack, 19 including without limitation all claims that were or could have been brought in the Action based on 20 the same factual predicate, whether or not those claims, demands, actions, or causes of action have 21 been pleaded or otherwise asserted, including any and all damages, losses, or consequences thereof. 22 Released Claims expressly do not include any claims, demands, actions, and causes of action 23 (whether statutory, contractual, or common law) for wages of any kind brought against Released 24 Parties relating to the December 2021 KPC Cyberattack or the resulting interruption of KPC 25 applications. 26 16. The Settlement Class Representatives and other Settlement Class Members are enjoined 27 from prosecuting any claim they have released in the preceding paragraphs in any proceeding 28 against any of the Released Parties or based on any actions taken by any of the Released Parties that 5 United States District Court Northern District of California 1 are authorized or required by the Settlement Agreement or by this Order. Likewise, Defendant and 2 its representatives, officers, agents, directors, affiliates, employees, insurers, and attorneys shall be 3 enjoined from prosecuting any claim they have released in the preceding paragraphs in any 4 proceeding against Settlement Class Representatives and Class Counsel or based on any actions 5 taken by Settlement Class Representatives and Class Counsel that are authorized or required by the 6 Settlement Agreement or by this Order. It is further agreed that the Settlement may be pleaded as a 7 complete defense to any proceeding subject to this section. 8 17. The Settlement Agreement shall not constitute and will not under any circumstances be 9 deemed to constitute, an admission of wrongdoing or liability by any Party, such wrongdoing and 10 liability being expressly denied and no final adjudication having been made. The Parties have 11 entered into the Settlement Agreement solely as a compromise of all claims for the purpose of 12 concluding the disputes between them, and the Settlement Agreement may not be used by any third 13 party against any Party. Per Federal Rule of Evidence 408, the entering into and carrying out of the 14 Settlement Agreement, and any negotiations or proceedings related to it, shall not be construed as, 15 or deemed evidence of, an admission or concession by any of the Parties, and shall not be offered 16 or received into evidence in any action or proceeding against any Party in any court, administrative 17 agency or other tribunal for any purpose whatsoever. 18 18. Notwithstanding the foregoing, nothing in this Final Order and Final Judgment shall be 19 interpreted to prohibit the use of the Final Judgment in a proceeding to consummate or enforce the 20 Settlement Agreement or Final Judgment, or to defend against the assertion of Released Claims in 21 any other proceeding, or as otherwise required by law. 22 19. Class Counsel have moved for an award for attorneys’ fees and reimbursement of 23 expenses. Pursuant to Rules 23(h)(3) and 54(d) of the Federal Rules of Civil Procedure, and having 24 reviewed the Fee Request, supporting memorandum and associated papers and having considered 25 the factors for assessing the reasonableness of a class action fee request, the Court awards Class 26 Counsel with attorneys’ fees in the amount of $1,835,493 and costs in the amount of $27,163.33, 27 with such costs to be split between Class Counsel based on their actual expenses provided to the 28 Court as part of their declarations in support of the Motion for Final Approval and Fee Request. 6 1 2 20. Class Counsel have also requested that Service Awards be approved and paid to 3 Settlement Class Representatives in recognition of their services provided for the benefit of the 4 Settlement Class. The Court, having reviewed the Service Awards Request, as well as the supporting 5 memorandum and associated papers, hereby finds that an award of $7,500.00 to each of the 6 Settlement Class Representatives is fair, reasonable, and appropriate in light of the service each 7 Class Representative has provided on behalf of and for the benefit of the Settlement Class, and an 8 award in that amount is hereby approved. The Settlement Administrator is directed to make such 9 service award payments to the Settlement Class Representatives in accordance with the terms of the 10 United States District Court Northern District of California Fees are approximately 1/3 of $5,500,000, reflecting a multiplier of 1.4 on lodestar of $1,311,066. Settlement Agreement, this Final Order, and the Final Judgment. 11 21. The Court awards the Settlement Administrator, Kroll Settlement Administration LLC 12 for their actual expenses incurred in administering the Settlement in the amount of $862,380.39 as 13 of November 15, 2023, with an estimated additional $150,000 in expenses to complete settlement 14 administration. 15 22. In the event that the Settlement Agreement is terminated pursuant to its terms or the 16 Court’s approval of the Settlement is reversed, vacated, or modified in any material respect by this 17 or any other Court, the certification of the Settlement Class shall be deemed vacated, the Action 18 shall proceed as if the Settlement Class had never been certified (including but not limited to the 19 Parties’ rights to engage in discovery and the Defendant’s right to oppose any motion for class 20 certification), and no reference to the Settlement Class, this Settlement Agreement, or any 21 documents, communications, or negotiations related in any way hereto shall be made for any 22 purpose. 23 23. The Court approves the thirteen untimely but otherwise valid claims received. 24 24. Without affecting the finality of this Order in any way, this Court retains continuing and 25 exclusive jurisdiction over: (a) the Parties for purposes of the administration, interpretation, 26 implementation, consummation, and enforcement of the Settlement; (b) the administration of this 27 Settlement, including any distributions made pursuant to the Settlement; (c) the Settlement Class 28 Members for all matters relating to the Action; and (d) the Action, until the Effective Date and until 7 1 each and every act agreed to be performed by the Parties shall have been performed pursuant to the 2 terms and conditions of the Settlement Agreement, including the exhibits appended thereto. To 3 avoid doubt, this Order applies to and is binding upon the Parties, the Settlement Class Members, 4 and their respective heirs, successors, and assigns. 5 6 7 8 9 IT IS SO ORDERED. Dated: November 21, 2023 ______________________________________ SUSAN ILLSTON United States District Judge 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8
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