Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 1 of 33
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
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`
`Lead Case No. 20-CV-1297 (consolidated
`with 20-CV-1410)
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`
`
`NEVILLE MCFARLANE, EDWARD
`HELLYER, DEANNA COTTRELL,
`CARRIE MASON-DRAFFEN, HASEEB
`RAJA, RONNIE GILL, JOHN
`FRONTERA, SHARIQ MEHFOOZ, and
`STEVEN PANICCIA, individually and on
`behalf of all others similarly situated,
`
`
`Plaintiffs,
`
`
`v.
`
`ALTICE USA, INC., a New York
`Corporation,
`
`
`Defendant.
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`
`
`MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFFS’
`MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 2 of 33
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`I.
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`TABLE OF CONTENTS
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`INTRODUCTION ................................................................................................................. 1
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`II. BACKGROUND TO THE SETTLEMENT ......................................................................... 2
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`A. Nature of the Litigation and Procedural History ......................................................... 2
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`B. Discovery and Settlement Negotiations ...................................................................... 5
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`III. SUMMARY OF THE SETTLEMENT ................................................................................. 6
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`A. Definition of the Class ................................................................................................. 6
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`B. The Settlement Terms and Benefits to the Settlement Class ....................................... 7
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`1. Identity Theft Protection and Credit Monitoring Package .......................................... 7
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`2. Cash Payments............................................................................................................. 7
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`3. Injunctive Relief .......................................................................................................... 8
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`4. Notice, Claims Process, and Settlement Administration ............................................. 9
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`5. Attorneys’ Fees, Expenses, and Service Awards ........................................................ 9
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`IV. THE PROPOSED SETTLEMENT WARRANTS PRELIMNARY APPROVAL ............. 10
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`A. Standards for Preliminary Approval .......................................................................... 10
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`B. The Grinnell and Rule 23(e) Factors Are Satisfied ................................................... 12
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`1. Procedural Fairness - Rule 23(e)(2)(A-B) ................................................................. 12
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`2. Substantive Fairness - Rule 23(e)(2)(C-D) and Remaining Grinnell Factors ........... 13
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`a. Rule 23(e)(2)(C)(i) / Grinnell Factors Nos. 1, 4, 5 and 6 – The Costs, Risks, and
`Delay of Trial and Appeal ................................................................................... 14
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`b. Rule 23(e)(2)(C)(ii) – Effectiveness of Proposed Method of Distributing Relief
` ……………………………………………………………………………….16
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`c. Rule 23(e)(2)(C)(iii) - The Timing and Terms of Class Counsel’s Proposed
`Award of Attorneys’ Fees ................................................................................... 17
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 3 of 33
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`d. Rule 23(e)(2)(C)(iv) - There Are No Additional Agreements Required To Be
`Identified Under Rule 23 ..................................................................................... 18
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`e. Rule 23(e)(2)(D) - Class Members Are Treated Equitably ................................. 18
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`f. Grinnell Factor No. 2 - Settlement Class Members’ Reaction............................ 19
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`g. Grinnell Factor No. 3 - The Stage of the Warrants Preliminary Approval ......... 19
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`h. Grinnell Factor No. 7 - Whether Defendant Can Withstand A Substantially
`Greater Judgement ............................................................................................... 20
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`i. Grinnell Factor Nos. 8-9: Range of Reasonableness of Settlement .................... 20
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`V. THE SETTLEMENT CLASS SHOULD BE CERTIFIED ................................................ 21
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`A. The Rule 23(a) Factors Are Met ................................................................................ 21
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`1. The Class Is Sufficiently Numerous .......................................................................... 21
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`2. Questions of Law or Fact are Common to the Class ................................................. 21
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`3. Plaintiffs’ Claims Are Typical .................................................................................. 22
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`4. Plaintiffs Will Fairly and Adequately Protect the Class ............................................ 22
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`B. The Settlement Class Satisfies Rule 23(b)(3) ............................................................ 23
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`1. Common Questions Predominate .............................................................................. 24
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`2. The Class Is The Superior Method of Adjudication .................................................. 24
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`VI. THE PROPOSED NOTICE PROGRAM SHOULD BE APPROVED .............................. 25
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`VII. CONCLUSION ................................................................................................................... 25
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 4 of 33
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Baffa v. Donaldson, Lufkin & Jenrette Sec. Corp.,
`222 F.3d 52 (2d Cir. 2000)........................................................................................................ 22
`
`Castillo v. Seagate Tech., LLC,
`No. 16-01958, 2017 WL 4798611 (N.D. Cal. Oct. 19, 2017) .................................................. 24
`
`Charron v. Wiener,
`731 F.3d 241 (2d Cir. 2013)...................................................................................................... 20
`
`Christine Asia Co., Ltd. v. Yun Ma,
`No. 1:15-md-02631, 2019 WL 5257534 (S.D.N.Y. Oct. 16, 2019) ......................................... 12
`
`City of Detroit v. Grinnell Corp.,
`495 F.2d 448 (2d Cir. 1974)...................................................................................................... 11
`
`City of Providence v. Aeropostale, Inc.,
`No. 11 Civ. 7132(CM)(GWG), 2014 WL 1883494 (S.D.N.Y. May 9, 2014) .......................... 16
`
`Dolmage v. Combined Ins. Co. of Am.,
`No. 14 C 3809, 2017 WL 1754772 (N.D. Ill. May 3, 2017) .................................................... 15
`
`Hillis v. Equifax Consumer Servs., Inc.,
`No. 104-3400, 2007 WL 1953464 (N.D. Ga. June 12, 2007) ................................................... 18
`
`In re Adelphia Commc’ns Corp. Sec. & Derivatives Litig.,
`271 F. App’x 41 (2d Cir. 2008) ................................................................................................ 25
`
`In re Air Cargo Shipping Servs. Antitrust Litig.,
`No. 06-MD-1175 (JG)(VVP), 2014 WL 7882100 (E.D.N.Y. Oct. 15, 2014) .......................... 21
`
`In re Am. Bank Note Holographics, Inc. Sec. Litig.,
`127 F. Supp. 2d 418 (S.D.N.Y. 2001)....................................................................................... 15
`
`In re Am. Int’l Grp., Inc. Sec. Litig.,
`689 F.3d 229 (2d Cir. 2012)................................................................................................ 23, 24
`
`In re Anthem, Inc. Data Breach Litig.,
`327 F.R.D. 299 (N.D. Cal. 2018) .............................................................................................. 21
`
`In re AOL Time Warner, Inc. Sec. and “ERISA” Litig.,
`No. MDL 1500, 2006 WL 903236 (S.D.N.Y. Apr. 6, 2006) .................................................... 20
`
`
`
`iii
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 5 of 33
`
`In re Austrian & German Bank Holocaust Litig.,
`80 F. Supp. 2d 164 (S.D.N.Y. 2000)......................................................................................... 12
`
`In re Brinker Data Incident Litig.,
`No. 3:18-cv-686-TJC-MCR, 2021 WL 1405508 (M.D. Fla. Apr. 14, 2021) ........................... 22
`
`In re Chase Manhattan Corp. Sec. Litig.,
`No. 90-6092, 1992 WL 110743 (S.D.N.Y. May 13, 1992) ...................................................... 24
`
`In re EVCI Career Colls. Holding Corp. Sec. Litig.,
`No. 05 Civ. 10240(CM), 2007 WL 2230177 (S.D.N.Y. July 27, 2007)............................. 12, 16
`
`In re Flag Telecom Holdings, Ltd. Sec. Litig.,
`574 F.3d 29 (2d Cir. 2009)........................................................................................................ 22
`
`In re Global Crossing Sec. & ERISA Litig.,
`225 F.R.D. 436 (S.D.N.Y. Nov. 24, 2004) ............................................................................... 16
`
`In re Initial Pub. Offering Sec. Litig.,
`226 F.R.D. 186 (S.D.N.Y. 2005) .............................................................................................. 11
`
`In re Payment Card Interchange Fee & Merch. Discount Antitrust Litig.,
`330 F.R.D. 11 (E.D.N.Y. Jan. 28, 2019) ................................................................. 11, 13, 19, 20
`
`In re Prudential Sec. Inc. Ltd. P’ships Litig.,
`163 F.R.D. 200 (S.D.N.Y. 1995) .............................................................................................. 16
`
`In re Signet Jewelers Ltd. Sec. Litig.,
`2020 WL 4196468 (S.D.N.Y. July 21, 2020) ........................................................................... 19
`
`In re WorldCom, Inc. Sec. Litig.,
`388 F. Supp. 2d 319 (S.D.N.Y. 2005)....................................................................................... 16
`
`Kelen v. World Fin. Network Nat’l Bank,
`302 F.R.D. 56 (S.D.N.Y. 2014) ................................................................................................ 22
`
`Maley v. Del Global Techs. Corp.,
`186 F. Supp. 2d 358 (S.D.N.Y. 2002)....................................................................................... 16
`
`Masoud v. 1285 Bakery Inc.,
`No. 15-7414, 2017 WL 448955 (S.D.N.Y. Jan. 26, 2017) ....................................................... 24
`
`Masters v. Wilhelmina Model Agency, Inc.,
`473 F.3d 423 (2d Cir. 2007)...................................................................................................... 18
`
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 6 of 33
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`McReynolds v. Richards-Cantave,
`588 F.3d 790 (2d Cir. 2009)...................................................................................................... 10
`
`Morris v. Affinity Health Plan, Inc.,
`859 F. Supp. 2d 611 (S.D.N.Y. 2012)....................................................................................... 13
`
`Rosenfeld,
`2021 WL 508339 ............................................................................................................... passim
`
`Vaccaro,
`2017 WL 6398636 .................................................................................................................... 23
`
`Velez v. Novartis Pharm. Corp.,
`No. 04 Civ. 09194(CM), 2010 WL 4877852 (S.D.N.Y. Nov. 30, 2010) ................................. 14
`
`Wal-Mart Stores, Inc. v. Dukes,
`564 U.S. 338 (2011) .................................................................................................................. 21
`
`Wal-Mart Stores, Inc. v. Visa U.S.A., Inc.,
`396 F.3d 96 (2d Cir. 2005)............................................................................................ 10, 11, 20
`
`Yang v. Focus Media Holding Ltd.,
`No. 11 Civ. 9051(CM) (GWG), 2014 WL 4401280 (S.D.N.Y. Sept. 4, 2014) ........................ 13
`
`
`
`Rules
`
`Fed. R. Civ. P. 23 ................................................................................................................... passim
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 7 of 33
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`Plaintiffs Neville McFarlane, Deanna Cottrell, Edward Hellyer, Carrie Mason-Draffen,
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`Haseeb Raja, Ronnie Gill, John Frontera, Shariq Mehfooz, and Steven Paniccia, individually and
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`on behalf of the putative class, (collectively, “Plaintiffs”), submit this memorandum of law in
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`support of Plaintiffs’ Motion for Preliminary Approval of Settlement (the “Motion”).
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`I.
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`INTRODUCTION
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`In February 2020, defendant Altice USA, Inc. (“Altice” or “Defendant”) announced that an
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`unauthorized third party gained access to certain employees’ email account credential through a
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`phishing incident (the “Data Security Incident,” “Data Breach” or the “Breach”). As a result, the
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`email boxes of impacted users were compromised, and within one of the compromised mailboxes
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`was a password-protected file that contained the personally identifiable information (“PII”) of
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`52,846 current and former employees, including their names, employment information, dates of
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`birth, Social Security numbers, and some driver’s license numbers.1
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`Plaintiffs received formal notice of the Data Security Incident and commenced multiple
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`class action lawsuits, alleging that Defendant failed to sufficiently protect their PII. On April 8,
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`2020, the related cases were consolidated in this Court.
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`After more than two (2) years of hard-fought litigation, the Parties have agreed to a
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`Settlement that provides substantial monetary benefits and injunctive relief to the Settlement Class.
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`Specifically, the Settlement provides monetary relief that will: (i) reimburse Out-of-Pocket
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`Expenses of up to $3,000 per Settlement Class Member who incurred expenses or losses as a result
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`of the Data Security Incident, and (ii) reimburse each Settlement Class Member for up to three (3)
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`hours of attested Time Spent responding to the Data Security Incident at a rate of $25.00 an hour.
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`1 Unless otherwise stated, all capitalized terms shall have the definitions set forth in the Class
`Action Settlement Agreement and Release (“Settlement Agreement”), attached as Exhibit A to the
`Declaration of William B. Federman in Support of Plaintiffs’ Motion for Preliminary Approval of
`Class Action Settlement.
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 8 of 33
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`In addition, all Settlement Class Members are eligible to receive three (3) years of 3 Credit Bureau
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`Monitoring offered by Experian, including Credit Report, Identity Protection Services, Identity
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`Restoration Services, and $1,000,000 in Identity Theft Insurance. Further, Settlement Class
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`Members who spent at least three hours responding to the Data Security Incident will have the
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`option to receive an additional two (2) years of Identity Theft Protection and Credit Monitoring (for
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`a total of five (5) years of Identity Theft Protection and Credit Monitoring) in lieu of Time Spent
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`compensation. Finally, the Settlement provides injunctive relief benefits in the form of meaningful
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`enhancements to Altice’s cybersecurity as it relates to the Settlement Class Members’ PII. Altice
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`will also pay for the cost of notice to the Settlement Class, as well as the costs of settlement
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`administration, service awards to Plaintiffs, and attorneys’ fees, costs, and expenses that may be
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`awarded by the Court, with such costs to be paid separate from the benefits available to Settlement
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`Class Members.
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`As detailed below, the Settlement falls within the range of possible final judicial approval
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`and includes a comprehensive notice plan. Altice does not oppose the relief requested in the motion.
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`II.
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`BACKGROUND TO THE SETTLEMENT
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`A.
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`Nature of the Litigation and Procedural History
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`Altice is a cable TV and communications provider. Altice’s broadband, pay television,
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`mobile, internet, proprietary content and advertising services are used by nearly 5 million
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`subscribers across 21 states through its Altice, Optimum, Suddenlink, and other brands.
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`In or around November 2019, an unauthorized third party gained access to certain Altice
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`employees’ email account credentials through a phishing incident. In connection with that Data
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`Security Incident, the email boxes of impacted users were compromised, and within one of the
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`compromised mailboxes was a password-protected file that contained the names, employment
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`information, dates of birth, Social Security numbers, and in some instances, driver’s license
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 9 of 33
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`numbers of current employees and some former employees of Altice. The Data Security Incident
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`potentially affected 52,846 current and former Altice employees. On February 5, 2020, Altice sent
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`notice letters to potentially impacted current and former employees.
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`On February 13, 2020, Brittany Wiley, a current Altice employee, filed a class action
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`complaint against Altice in the United States District Court for the Southern District of New York
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`relating to the Data Security Incident. ECF No. 1. On February 18, 2020, Edward Hellyer, a former
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`Altice employee, filed a similar class action complaint against Altice in the United States District
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`Court for the Southern District of New York relating to the same Data Security Incident. Both
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`cases were assigned to the Honorable Judge Jesse M. Furman and were consolidated under
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`McFarlane v. Altice USA, Inc., Civ. No. 1:20-cv-01297-JMF (S.D.N.Y.). ECF No. 29.
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`On May 4, 2020, a First Consolidated Class Action Complaint (“Consolidated Complaint”)
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`was filed adding plaintiffs Neville McFarlane, DeAnna Cottrell, Carrie Mason-Draffen, Haseeb
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`Raja, Melissa Pinson, Ronnie Gill, John Frontera, and Sariq Mehfooz. ECF No. 30. The
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`Consolidated Complaint voluntarily dismissed Plaintiff Brittany Wiley due to an arbitration
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`agreement she had executed as part of her employment with Altice, which prevented her from
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`maintaining the claims in federal court. The plaintiffs in the Consolidated Complaint asserted
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`claims for negligence, negligence per se based on violation of New York Labor Law, negligence
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`per se based on violation of the Cable Communications Act, negligence per se based on the New
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`York General Business Law, violation of the New York Labor Law, violation of the Cable
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`Communications Act, unjust enrichment, and for injunctive and declaratory relief.
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`On June 15, 2020, Altice filed a motion to dismiss the Consolidated Complaint and a motion
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`to compel arbitration as to certain plaintiffs. ECF Nos. 35 and 38. On July 27, 2020, the Plaintiffs
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`filed an Amended Consolidated Class Action Complaint (“Amended Consolidated Complaint”).
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`ECF No. 42. The Amended Consolidated Complaint added Steven Paniccia as a plaintiff while
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 10 of 33
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`removing Melissa Pinson. The Amended Consolidated Complaint also added a claim for breach of
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`implied contract and dismissed the claims for negligence per se based on the New York General
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`Business Law and unjust enrichment.
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`On August 17, 2020, Altice filed a motion to dismiss the Amended Consolidated Complaint
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`and a motion to compel arbitration as to certain plaintiffs. ECF Nos. 45 and 47. Plaintiffs opposed
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`these motions. ECF No. 54.
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`On March 8, 2021, the Court issued an order denying in part and granting in part Altice’s
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`motion to dismiss the Amended Consolidated Complaint. ECF No. 58. In the Order, the Court
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`dismissed Plaintiffs’ claims for violation of New York Labor Law and negligence per se based on
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`New York Labor Law, but the Court denied Altice’s motion as to standing and the breach of implied
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`contract claim. Accordingly, Plaintiffs’ claims for negligence, breach of implied contract, and
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`injunctive relief survived Altice’s motion to dismiss. The Court deferred ruling on Altice’s motion
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`to compel arbitration pending its review of requested supplemental submissions.
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`On March 29, 2021, Plaintiffs filed a supplemental memorandum in opposition to Altice’s
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`motion to compel arbitration. ECF No. 60. Plaintiffs also filed a Second Amended Consolidated
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`Class Action Complaint that alleged only claims for negligence, breach of implied contract, and
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`injunctive relief. ECF No. 59.
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`On April 15, 2021, the Court denied Altice’s motion to compel arbitration. ECF No. 63.
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`On May 6, 2021, Altice filed its Answer to the Second Amended Consolidated Class Action
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`Complaint. ECF No. 66.
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`On May 18, 2021, Altice filed a notice of appeal in the United States Court of Appeals for
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`the Second Circuit to appeal the district court’s Order denying Altice’s motion to compel
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`arbitration. ECF No. 69. On September 1, 2021, the Second Circuit ordered the withdrawal of
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`Altice’s appeal, pursuant to the Parties’ submission of a stipulation to withdrawal. ECF No. 80.
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`B.
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`Discovery and Settlement Negotiations
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`After the Court’s Order denying in part Altice’s motion to dismiss and Order denying
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`Altice’s motion to compel arbitration, the Parties began conducting discovery.
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`On May 27, 2021, the Parties exchanged Initial Disclosures pursuant to Federal Rule of
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`Civil Procedure 26. See Federman Decl. at ¶ 3 and n.2.
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`On June 14, 2021, Plaintiffs served Altice with requests for the production of documents
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`and a set of detailed interrogatories. That same day, Altice served Plaintiffs with interrogatories
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`and requests for document production. See id.
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`On June 25, 2021, the Parties participated in a telephonic conference to discuss whether and
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`how Plaintiffs’ discovery requests could be narrowed to facilitate expediated responses and
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`document production from Altice. By July 2, 2021, the Parties had reached agreement on narrowed
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`interrogatories and narrowed document requests. On July 13, 2021, Altice served Plaintiffs with
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`informal interrogatory responses and produced several thousands of pages of relevant documents
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`to Plaintiffs. See id.
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`On July 19, 2021, the Parties participated in a full day mediation session with JAMS
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`mediator Bruce A. Friedman. Prior to the mediation, the Parties prepared and served detailed
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`mediation statements, which set forth the legal and factual arguments in favor of their respective
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`positions. Further, prior to the mediation, Plaintiffs provided Altice with a proposed term sheet
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`for a potential class settlement. After a full day of discussions and negotiations, the mediation
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`ended without a resolution. However, the Parties continued to exchange relevant information and
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`to negotiate potential settlement terms with the help of Mr. Friedman. The mediation and
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`subsequent settlement discussions spanned several months and included exchanging information
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`between the Parties about the Data Security Incident, potential damages, appellate issues,
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 12 of 33
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`corrective actions that Altice has taken to date to improve and update its cybersecurity, and the
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`experiences of Plaintiffs. See Settlement Agreement, § I.K.
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`After months of continued back-and-forth, facilitated by Mr. Friedman, the Parties finally
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`reached an agreement in principle. Since that time, the Parties have worked diligently to prepare a
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`formal settlement agreement and the exhibits thereto, including proposed notices to the Settlement
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`Class, and collect bids from competing settlement administrators.
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`III.
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`SUMMARY OF THE SETTLEMENT
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`A.
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`Definition of the Class
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`The Parties contemplate certification, for settlement purposes only, of a nationwide class.
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`The Settlement Class is comprised of 52,846 current and former Altice employees and its affiliated
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`companies. The proposed Settlement Class is defined as follows:
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`All current and former employees of Altice USA, Inc. and its subsidiaries or
`predecessor companies Cablevision and Suddenlink in the United States and its
`Territories who received a Notification Letter stating that their PII may have been
`compromised during the Data Security Incident.
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`See Settlement Agreement, § II.HH.
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`The Settlement Class specifically excludes Altice’s trustees, administrators, and attorneys;
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`all Settlement Class Members who timely and validly submit a Request for Exclusion; the Judge(s)
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`or Magistrate Judge(s) to whom the Action is assigned and any member of those Judges’ staffs or
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`immediate family members; any members or employees of defense counsel; and any other person
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`found by a court of competent jurisdiction to be guilty under criminal law of initiating, causing,
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`aiding or abetting the criminal activity or occurrence of the Data Security Incident or who pleads
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`nolo contendere to any such charge. Id.
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 13 of 33
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`B.
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`The Settlement Terms and Benefits to the Settlement Class
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`1. Identity Theft Protection and Credit Monitoring Package
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`All Settlement Class Members are automatically eligible to receive, free of charge, three (3)
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`years of the Identity Theft Protection and Credit Monitoring Package. To receive the Identity Theft
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`Protection and Credit Monitoring Package, a Settlement Class Member need only complete a simple
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`enrollment form. See id. at § III.B. The Identity Theft Protection and Credit Monitoring Package
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`will provide Settlement Class Members with extensive credit monitoring and privacy protection,
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`including three (3) years of Experian’s 3-Bureau Credit Monitoring, Identity Protection Services,
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`Identity Restoration Services, and $1,000,000 in Identity Theft Insurance. See id. at § II.R. The
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`retail price of an Experian package that includes each of these levels of protection is $19.99 per
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`month.2 Accordingly, this Settlement category alone provides a benefit worth approximately $720
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`to each Settlement Class Member.
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`2. Cash Payments
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`In addition to the Identity Theft Protection and Credit Monitoring, the Settlement provides
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`the following fair and reasonable cash payments to eligible Settlement Class Members:
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`Reimbursement of Out-Of-Pocket Expenses: Settlement Class Members who claim they
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`suffered Out-of-Pocket Expenses because of the Data Security Incident, and who can provide
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`reasonable documentation for such expenses or losses, will be eligible for a payment of the amount
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`of loss up to three thousand dollars ($3,000). See Settlement Agreement, § III.A, ¶ 1.
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`Reimbursement for Time Spent: Settlement Class Members who spent time in response to
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`the Data Security Incident will be eligible for reimbursement of up to three (3) hours of time spent
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`at a rate of twenty-five dollars ($25.00) per hour. To receive this payment, a Settlement Class
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`2 See https://www.experian.com/consumer-products/compare-identity-theft-products.html.
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 14 of 33
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`Member need only provide a brief description of (1) the action taken in response to the Data
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`Security Incident; (2) the time associated with each action; and (3) an attestation that the time was
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`spent responding to or addressing issues relating to the Data Security Incident.3 Id. at § III.A, ¶ 2.
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`As an alternative to receiving a cash payment, a Settlement Class Member who spent at least
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`three (3) hours responding to the Data Security Incident can opt to receive an extra two (2) years of
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`Identity Theft Protection and Credit Monitoring, which would be in addition to the three (3) years
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`of Identity Theft Protection and Credit Monitoring already provided under the Settlement. See id.
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`at § III.B, ¶ 2. Thus, Settlement Class Members who elect to receive the Extended Identity Theft
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`Protection and Credit Monitoring Package, instead of the cash reimbursement for Time Spent, will
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`receive a total of five (5) years of identity theft protection and credit monitoring. Id.
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`3. Injunctive Relief
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`The Settlement will also provide all Settlement Class Members with benefits in the form
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`of meaningful business practice changes relating to Altice’s data security.
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`The remedial measures to be implemented and maintained by Altice for a minimum of five
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`(5) years as a result of the Settlement include: (i) conducting at least annual penetration testing
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`through an established third party IT security vendor; (ii) providing periodic anti-phishing training
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`to employees, including directions about how to handle suspicious communications and
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`documents, and encouraging personnel to report any concerns about Altice’s information security
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`systems; (iii) conducting phishing testing at least twice per year, with such testing to include
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`sending mock phishing emails to employees to help them identify malicious emails and links; (iv)
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`maintaining anti-malware software on all servers; (v) maintaining a company-wide encryption
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`protocol wherein all PII is segregated and encrypted; (vi) ensuring strict access controls are
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`3 Claims made for lost time can be combined with claims for reimbursement of out-of-pocket
`expenses but are subject to the same $3,000.00 cap.
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`maintained with respect to any Settlement Class Member PII and that such data is encrypted in
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`transit and at rest; (vii) performing a security assessment for the organization based on the National
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`Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”) and ensure that
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`Altice is compliant with the NIST CSF; (viii) utilizing a Security Information and Event
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`Management (“SIEM”) tool to assist in identifying cyber-attacks; and (ix) establishing a protocol
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`that includes advising the CEO, CFO, and other executive officers at least annually in writing of
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`the budget and requests by the CIO for upgrading and maintaining the data security program. In
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`addition, Altice has agreed to purge, delete, or scrub from Altice systems the PII of Settlement
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`Class Members whose information is no longer necessary to be stored, including those Settlement
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`Class Members whose employment at Altice ended before January 1, 2020, subject to Altice’s
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`internal record retention and hold policies and process. Id. at § III.H.
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`These investments inure to the direct benefit of the Settlement Class, whose PII remain in
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`Altice’s computer systems. The adoption of these remedial measures will substantially improve
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`the protection of the Settlement Class Members’ PII stored by Altice.
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`4. Notice, Claims Process, and Settlement Administration
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`As further consideration to the Settlement Class, Altice has also agreed to bear the costs of
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`the Settlement Administrator providing notice, processing Claim Forms and requests for exclusion,
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`and administering the Settlement, including the distribution of the Settlement benefits. These costs
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`will in no way reduce the other benefits afforded to Settlement Class Members. See id. at § III.E.
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`5. Attorneys’ Fees, Expenses, and Service Awards
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`Additionally, Altice has agreed to separately pay Plaintiffs’ Counsel’s attorneys’ fees,
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`reimbursement of litigation expenses, and service awards to Plaintiffs that may be awarded by the
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`Court. Plaintiffs’ Counsel intend to request reasonable attorneys’ fees and litigation costs not to
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`exceed $550,000 and service awards to Plaintiffs not to exceed $2,750 each. Altice will pay such
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`Case 1:20-cv-01297-JMF Document 88 Filed 04/27/22 Page 16 of 33
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`attorneys’ fees, costs, and service awards, in the amounts awarded by the Court, entirely separate
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`from the relief being made available to Settlement Class Members. Accordingly, the payment of
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`such fees and expenses will not at all reduce the other benefits afforded to Settlement Class
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`Members. Id. at § III.F-G.
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`IV.
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`THE PROPOSED SETTLEMENT WARRANTS PRELIMNARY APPROVAL
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`The Settlement is the result of vigorous litigation, the exchange of documents and other
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`discovery, and extensive arm’s length negotiations among the Parties with the assistance of
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`experienced JAMS mediator Bruce A. Friedman. See id. at § I.K. The Settlement provides valuable
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`benefits and monetary compensation to Class Members as well as favorable changes to Defendant’s
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`data security measures. The Settlement compares favorably to previous data breach settlements
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`when weighed against the risks associated with continued litigation. Having weighed the likelihood
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`of success and inherent risks and expense of litigation, Plaintiffs and Plaintiffs’ Counsel strongly
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`believe that the proposed settlement is “fair, reasonable, and adequate[.]” Fed. R. Civ. P. 23(e)(2).
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`A.
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`Standards for Preliminary Approval
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`Courts encourage, and public policy favors, the