Judge Denies $600K Kimpton Data Breach Class Action Settlement

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For the second time, the federal judge overseeing a Kimpton data breach class action lawsuit has denied a proposed settlement.

The judge expressed concern about the $600,000 cap on the settlement and whether or not that would fully compensation Class Members who were harmed.

Lead plaintiff Andrew Parsons filed the Kimpton data breach class action lawsuit alleging that the hotel company was responsible for a 2016 data breach that exposed the information of people who were within the company’s system.

U.S. District Judge Vince Chhabria disagreed with Kimpton counsel’s argument that such a settlement would lead to fair payments for all Class Members who would now have to worry about protecting their identities.

The suggested settlement for the Kimpton data breach class action lawsuit enabled Class Members to be paid $15 per hour for up to three hours for all efforts to protect their identities.

The revised settlement offer from Parsons explained two sets of Classes for this lawsuit: The 150,000 people for whom Kimpton had physical or email addresses, and those for whom the company does not.

The judge had other concerns with the proposed Kimpton data breach class action settlement, noting that the Class Member counsel’s request for $800,000 in attorneys’ fees and Kimpton’s response not to challenge that request was unjustified given the suggested $600,000 cap.

Furthermore, the judge states that language inside the Kimpton class action settlement should make it clear that Class Members could describe bank fees and expenses instead of submitting direction documentation.

The Kimpton data breach class action lawsuit was originally brought after it was discovered that customers of the hotel chain had unauthorized charges on payment cards those consumers used at a hotel restaurant.

The investigation that followed showed that payment cards were used over a period of five months due to malware installed on the restaurant’s servers.

Due to the length of time for which data was potentially exposed, consumers could have been at risk of identity theft, which is part of the reason why the judge believes the proposed settlement could not offer ample compensation for efforts to now protect those identities.

The Kimpton data breach class action lawsuit says that the company is responsible for acting recklessly and for violating California’s state business laws by not ensuring that customer data was secure.

The original settlement agreement suggested by the parties was proposed in May 2018. At that time, the settlement award was capped at the $600,000 figure that the judge deems unreasonable given the circumstances.

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Parsons is represented by Michael F. Ram and Susan S. Brown of Robins Kaplan LLP, Matt Malone of Rock Law LLP, and John A. Yanchunis and Marisa Glassman of Morgan & Morgan Complex Litigation Group.

The Kimpton Data Breach Class Action Lawsuit is Andrew Parsons v. Kimpton Hotel & Restaurant Group LLC, Case No. 3:16-cv-05387-VC, in the U.S. District Court for the Northern District of California.

UPDATE: On Jan. 9, 2019, after two previous rejections of the proposed deal, a California federal judge has approved a $600,000 class action settlement that will end  claims that Kimpton Hotels didn’t do enough to protect customers’ information from a data breach.

UPDATE 2: March 2019, the Kimpton Hotels data breach class action settlement is now open. Click here to file a claim.