Justia Daily Opinion Summaries

Internet Law
February 28, 2025

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IN RE: CALIFORNIA PIZZA KITCHEN DATA BREACH LITIGATION

Class Action, Communications Law, Consumer Law, Internet Law

U.S. Court of Appeals for the Ninth Circuit

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Internet Law Opinions

IN RE: CALIFORNIA PIZZA KITCHEN DATA BREACH LITIGATION

Court: U.S. Court of Appeals for the Ninth Circuit

Docket: 23-55288

Opinion Date: February 24, 2025

Judge: Kenneth Kiyul Lee

Areas of Law: Class Action, Communications Law, Consumer Law, Internet Law

A cyberattack on California Pizza Kitchen, Inc. (CPK) in September 2021 compromised the personal information of over 100,000 former and current employees. This led to multiple class action lawsuits against CPK, alleging negligence and other claims. The consolidated plaintiffs reached a settlement with CPK, offering cash payments and credit monitoring services to class members, with CPK required to make payments only to those who submitted valid claims. The settlement's monetary value was estimated at around $950,000, while the attorneys sought $800,000 in fees.

The United States District Court for the Central District of California approved the settlement but reserved judgment on the attorneys' fees until after the claims process concluded. The consolidated plaintiffs reported a final claims rate of 1.8%, with the maximum monetary value of the claims being around $950,000. Despite expressing concerns about the scope of attorneys' fees, the district court ultimately awarded the full $800,000 in fees and costs.

The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court's approval of the class settlement, finding that the district court had properly applied the heightened standard to review the settlement for collusion and had not abused its discretion in finding the settlement fair, reasonable, and adequate. However, the Ninth Circuit reversed the fee award, noting that the district court had not adequately assessed the actual value of the settlement and compared it to the fees requested. The case was remanded for the district court to determine the settlement's actual value to class members and award reasonable and proportionate attorneys' fees.

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