United States v. 2022-06-27 | 20-16633 | RONALD SCHWARTZ V. YAHOO! INC. | nonprecedential |…

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: YAHOO! INC. CUSTOMER
DATA SECURITY BREACH
LITIGATION,
______________________________
RONALD SCHWARTZ; et al.,
Plaintiffs-Appellees,
AARON MILLER,
Objector-Appellant,
v.
YAHOO! INC.; AABACO SMALL
BUSINESS, LLC,
Defendants-Appellees.
No. 20-16633
D.C. No. 5:16-md-02752-LHK
MEMORANDUM*
Appeal from the United States District Court
for the Northern District of California
Lucy H. Koh, District Judge, Presiding
Argued and Submitted February 16, 2022
San Francisco, California
FILED
JUN 27 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.

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Before: GOULD and RAWLINSON, Circuit Judges, and ZIPPS,** District Judge.
This appeal stems from a class action complaint alleging that Yahoo! Inc.
and Aabaco Small Business, LLC (collectively, Yahoo) failed to employ sufficient
security measures to protect class members’ personal information, resulting in
multiple data breaches. The data breach impacted approximately 194 million
users.
The parties reached a settlement agreement, which included the provision of
credit monitoring services, to be administered by AllClear ID. Objector Aaron
Miller (Miller) challenged these services, arguing, in relevant part, that: AllClear
ID is ineffective because it is the subject of numerous consumer complaints, and
the Attorneys’ fees award should be reduced to reflect the actual (lesser) value of
the settlement. The district court overruled Miller’s objections. Miller timely
appealed.
Miller argues that: (1) the district court failed to analyze prior complaints
against AllClear ID using the appropriate “Higher Standard of Fairness” analysis;
and (2) “the attorneys’ fees awarded should be reduced proportionately to the value
** The Honorable Jennifer G. Zipps, United States District Judge for the
District of Arizona, sitting by designation.
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of the settlement” in light of the limited (true) value amount of the credit
monitoring services.
A district court may, in its discretion, approve a class action settlement that
is “fair, reasonable, and adequate.” In re Volkswagen “Clean Diesel” Mktg., Sales
Practices, & Prods. Liab. Litig., 895 F.3d 597, 606 (9th Cir. 2018) (citation
omitted). “Appellate review of the district court’s fairness determination is
extremely limited, and we will set aside that determination only upon a strong
showing that the district court’s decision was a clear abuse of discretion.” Lane v.
Facebook, Inc., 696 F.3d 811, 818 (9th Cir. 2012) (citation and internal quotation
marks omitted).
1. Miller’s assertion that AllClear ID was ineffective as a credit monitoring
service did not render the settlement inadequate. We have held that “a district
court’s only role in reviewing the substance of [a] settlement is to ensure that it is
fair, adequate, and free from collusion.” Id. at 819 (citation and internal quotation
marks omitted). The district court’s recognition that AllClear ID possessed an A+
rating from the Better Business Bureau, maintained a 96% customer satisfaction
rating, had a 100% success rate in resolving financial identity theft cases, and
supplied credit monitoring to over two million individuals around the world
supported the court’s approval of the settlement. See id.
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Miller’s reliance on the purported inadequacy of AllClear ID’s credit
monitoring services also ignores the alternative remedy of cash payouts to
individuals who already have credit monitoring or identity protection, who have
demonstrated out-of-pocket losses, including loss of time, or who paid for Aabaco
Small Business services and Yahoo Mail services.
2. Miller contends that the value of the credit monitoring services
disproportionately increased the attorneys’ fees award, and urges us to remand this
case to the district court to determine whether the actual value of the credit
monitoring services adequately supports an award of attorneys’ fees to class
counsel. The district court addressed Miller’s concern by agreeing that “the retail
value of the [c]redit [s]ervices should not inflate the Settlement Fund for the
purposes of the attorneys’ fee analysis.” However, the court noted that “most of
the Settlement Class Members have opted for Alternative Compensation” and
“declined to treat the Settlement Fund as larger because of the alleged surplus
value created by Yahoo’s lump sum purchase of the Credit Services.” Under these
circumstances, Miller failed to demonstrate that the district court’s assessment
lacked fairness, was inadequate, or resulted in collusion among the parties. See id.
AFFIRMED.
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