$600K Kimpton Data Breach Settlement Approved After Third Try

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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.

U.S. District Judge Vince Chhabria made his decision to approve the settlement deal earlier this month, and approved certification of the settlement Class as well.

In the Kimpton data breach class action settlement, the $600,000 settlement is a cap on the amount that Kimpton must pay to reimburse people affected by a 2016 data breach at the company.

Judge Chhabria determined that if the number of valid claims made by consumers exceeds $600,000 the amount each consumer will be reduced proportionally so that the amount the company must pay does not exceed $600,000.

In addition to the $600,000 to be distributed to Class Members, the judge also determined that Kimpton must pay up to $800,000 in attorneys fees “inclusive of reasonable costs and expenses.” The lead plaintiff, Andrew Parsons, will receive an award of $5,000.

According to Parsons, the company violated California state business law by not protecting its customers’ information.

The settlement deal allocates up to $250 for each Class Member who had their information compromised in the data breach.

Class members will be eligible to receive compensation for the time they spent recovering from the data breach in the amount of $25 per hour spent, up to five hours.

Time that consumers spent recovering from the breach could include replacing credit cards, contesting fraudulent charges and getting them reversed.

Customers who are determined to have faced “extraordinary” monetary losses may be eligible to receive up to $10,000.

Parson’s counsel filed a proposed version of the settlement deal on December 10 which read that “the court finds that the settlement deal was reached in the absence of collusion, and is the product of informed, good-faith, arm’s-length negotiations between the parties, and their capable and experienced counsel under the supervision of a mediator.”

A final approval hearing for the settlement deal is set for June 20, 2019.

This decision to approve the deal was reached after Judge Chhabria rejected the proposed deal twice before.

He worried that the amount was insufficient to effectively compensate all class members.

His opinion contrasted with Kimpton’s assertion that Class Members would indeed be sufficiently compensated for time spent recovering from possibly identity theft suffered because of the data breach.

In particular, Judge Chhabria had taken issue with an earlier version of the settlement that had only offered consumers an hourly rate of $15 per hour spent recovering from identity theft, compensating them for a maximum of three hours of time spent.

According to Judge Chhabria, “it is unreasonable to reimburse injured class members a mere $15 per hour for time spent protecting against identity theft. It is also unreasonable to cap the number o hours for which injured class members may seek reimbursement at three. the $15 hourly rate is far too low to fully compensate injured class members, and the three-hour cap will likely shortchange at least some subset of injured class members.”

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

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

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