Ken Dort Discusses the Impact of the Yahoo Breach Deal’s Failure in Law360

Chicago partner Ken Dort was quoted in a Law360 article titled “Yahoo Breach Deal's Failure Shows Vagueness Doesn't Pay.” The article discussed U.S. District Judge Lucy Koh’s recent refusal to approve a $50 million data breach settlement between Yahoo and its users, which sends a clear message to both sides that, even in instances where damages are difficult to quantify, courts are increasingly hesitant to approve agreements that lack detail but call for hefty attorneys’ fees.

Ken explained that the decision is likely to influence the class action bar in data breach actions, given that Judge Koh’s misgivings with the proposed settlement centered on a lack of specificity that could doom any class action settlement: “What Judge Koh focused on was the vague notice to class members that impeded her ability to make a decision on whether the settlement was reasonable, which is not so much a data breach issue but more of a class action issue more generally.”

Ken also said that once a case is past the consideration standing defenses, settlements often look more enticing as both sides face enhanced risks and mounting costs: “Almost always the wrongdoer is not in court to say what they did or how their conduct impacted this or that group of people, which makes it hard to tie a given breach to a given person’s problems…To be able to monetize the breach, it’s not so much about actual financial harm that a person incurred but rather the higher risk of identity theft or problems they may incur down the road.”