Utah attorney general claims victory in Wawa data breach settlement case

The United States Court of Appeals for the Third Circuit recently sided with a coalition of attorneys general led by Utah Attorney General Sean D. Reyes.

It happened after Reyes led an amicus brief in Wawa v. Frank.

The decision gave, "the Utah Attorney General’s Office a legal victory in an important case involving a question of reasonable settlement awards to consumer class members and class counsel," according to Reyes' office.

This challenge came about after Wawa’s settlement of a nationwide data breach case gave more money to class counsel ($3.2 million in fees) than it did to the victims in question; the victims received $80,000 cash and a potential for $2.8 million in low-value gift cards.

The class counsel got that amount based on $9 million in gift cards initially being made available to class members by Wawa. However, that figure was scaled down, and the attorneys general argue that the actual relief delivered is far lower and that fewer than 5% of these gift cards are likely to be redeemed.

The attorneys general argued that the attorneys should receive fees based on what settlement relief class members receive. In this instance, class counsel would likely receive over 93% of the settlement value due to the low redemption rates of the low-value gift cards, the attorneys general contended.

"For example, if recipients of the delivered gift cards redeemed on the high end of the studies (5%), that would represent an award of $140,000 (in addition to the $80,000 in cash) to consumer class members compared to the $3.2 million designation to class counsel," a release said.

In the appeals court opinion, a panel of three judges sided with the attorneys general; their ruling axed the previous determination of awarded fees and remanded the case to the district court for reconsideration.

Judge Paul Matey wrote the decision. In it, he directed the lower court “to consider whether ‘the funds made available to class members rather than the amount actually claimed during the claims process’ is the best measure of reasonableness; and whether the fee award is reasonable in light of any side agreements between class counsel and Wawa.”

Reyes praised the Court for its decision.

“Throughout my time in office, I have worked to safeguard the economic interests of hard-working Americans," Reyes said. "In this case, our team in Utah led a national coalition of states determined to fight for our citizens. I applaud the decision of the Court to stand with consumers and create sensible precedent for future class actions. Thank you to all of my AG colleagues who joined in our successful amicus brief.”

Other states that joined Utah on the amicus brief include: Alabama, Arkansas, Indiana, Kentucky, Montana, South Carolina, Tennessee, Texas, and Virginia.

Read the amicus brief here.


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