Data Breach Victims Press for Settlement Approval in Class Action Over Accellion Cyberattack

A lawsuit against Accellion Inc. over data breaches occurring in late 2020 and early 2021 is edging closer to resolution. On Tuesday, a reply brief filed in the consolidated action said that the court should approve an $8.1 million non-reversionary settlement that also provides credit monitoring and recompense for class members’ documented losses.

According to the plaintiffs’ initial motion for settlement approval filed last month, the putative class consists of 9.2 million United States residents, victims of the “file transfer appliance” (FTA) breach. As previously reported, one complaint accused Accellion of continuing to use its FTA despite knowledge that it was aging and plagued with issues which hackers ultimately took advantage of, breaching the databases of customers like the Washington State Auditor’s Office.

The motion for preliminary approval detailed the case’s history beginning in early 2021. The operative complaint, filed this January, stated causes of action under Washington and California’s consumer protection and data privacy laws, and for negligence and invasion of privacy. The motion also explained how, once Accellion became aware of the breach, it acted to patch the zero-day vulnerabilities and engaged a forensic specialist to investigate and report on its findings.

Settlement negotiations reportedly began almost immediately, though the parties only reached agreement after “protracted comprehensive negotiations and diligent efforts, including two mediation sessions and months of continued negotiations thereafter.”

In this week’s reply brief, the plaintiffs press as they did previously, that the settlement is fair, reasonable, and adequate, and should be preliminarily approved. It is not only on par with other data breach settlements from a monetary relief standpoint, but also includes a suite of benefits common to other, judicially approved data breach settlements such as credit monitoring and insurance services, compensation for documented losses, and cash payments, the filing said.

In addition, proposed class counsel Ahdoot & Wolfson PC and Barnow and Associates P.C. noted that they will seek up to but no more than 25% of the settlement fund in attorneys’ fees. As of mid-January, counsel said it has expended approximately $650,000 in lodestar and incurred $36,200 in expenses.

The preliminary approval hearing is scheduled for December before Judge Edward J. Davila in San Jose, Calif. Accellion is represented by Latham & Watkins LLP.