Voelker v. Enroll Confidently Incorporated

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ARIZONA
TO THE HONORABLE DIANE J. HUMETEWA, UNITED STATES DISTRICT
JUDGE:
Pending before the Court in this consolidated, data breach class action is Plaintiffs’
Unopposed Motion for Preliminary Approval of Class Action Settlement. (Doc. 41.) In
that Motion, Plaintiffs request preliminary approval of the proposed class, proposed class
settlement, proposed class counsels’ fee and settlement allocation, and proposed plan of
notice. (Id.) There is no opposition to the Motion. The Motion was referred to undersigned
for a report and recommendation on the Motion. (Doc. 42.) For the reasons that follow,
the undersigned recommends the Motion and its requested relief be granted.
I. BACKGROUND
Plaintiff Voelker initially filed the Complaint initiating this matter on July 30, 2024.
(Doc. 1.) Soon thereafter, the Court granted an unopposed motion to consolidate two other
similar cases into this one (Doc. 17), and a Consolidated Class Action Complaint was filed
Adam Voelker, et al.,
Plaintiffs,
v.
Enroll Confidently Incorporated,
Defendant.
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No. CV 24-01886-PHX-DJH
REPORT AND RECOMMENDATION
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on November 1, 2024. (Doc. 18.)
In their Consolidated Class Action Complaint, Plaintiffs, on behalf of themselves
individually and all others similarly situated, allege that Defendant failed to adequately
secure and safeguard their personally identifiable information (e.g., names, addresses,
Social Security numbers, and driver’s license numbers). (See Doc. 18 at 5-9.) Plaintiffs
are (or were) employees of companies that utilized Defendant for employee-benefit
management services. (Id. at 5.) Pursuant to Rule 23 of the Federal Rules of Civil
Procedure, Plaintiffs bring this nationwide class action on behalf of “[a]ll individuals
residing in the United States whose Private Information was accessed and/or acquired by
an unauthorized third party as a result of the data brief reported by Defendant in August
2024 (the ‘Class’)” and “[a]ll residents of California [whom] Defendant has identified as
being among those individual impacted by the Data Breach” (the ‘California Subclass’).
(Id. at 46.)
The Consolidated Class Action Complaint alleges the following causes of action as
to Plaintiffs and the Class: (Count I) Negligence, (Count II) Negligence per se, (Count III)
Breach of Third-Party Beneficiary Contract, (Count IV) Unjust Enrichment, (Count V)
Invasion of Privacy, (Count VI) Breach of Fiduciary Duty, and (Count VII) Violation of
the Arizona Consumer Fraud Act (A.R.S. §§ 44-1521, et seq.). (Doc. 18 at 51-68.) The
Consolidated Class Action Complaint further alleges, as to Plaintiff Voelker and the
California Subclass: (Count VIII) Violation of the California Unfair Competition Law (Cal.
Bus. & Prof. Code § 17200, et seq.) and (Count IX) Violation of the California Consumer
Records Act. (Id. at 68-71.) Declaratory judgment is also sought as to all Plaintiffs and
Class Members. (Id. at 71-73.)
After the Consolidated Class Action Complaint was filed, the Court granted
Defendant’s sought extensions to file a responsive pleading. (Docs. 23, 28.) The Court
entered a Scheduling Order. (Doc. 30.) The Court subsequently granted a stay to allow
the parties to pursue settlement. (Doc. 32.) On June 9, 2025, the parties notified the Court
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they had reached a class settlement after engaging in mediation. (Doc. 35.) The Court
lifted the stay and ordered that the parties seek preliminary approval of the class settlement
or otherwise provide a status report. (Docs. 36, 40.)
On August 5, 2025, Plaintiffs’ instant Motion was filed. (Doc. 41.) The Motion is
unopposed. (Id.) The Motion was referred to undersigned on November 19, 2025. (Doc.
42.)
II. THE PROPOSED SETTLEMENT
A. The Class
For settlement purposes, Plaintiffs request approval of the following class (the
“Class,” “Class Members,” or “Settlement Class”): “[A]ll living individuals residing in
the United States who were sent a notice by Defendant that their Private Information may
have been impacted in the Data Incident. Excluded from the Settlement Class are (a) all
persons who are employees, directors, officers, and agents of Defendant; (b) governmental
entities; and (c) the Judge assigned to the Action, that Judge’s immediate family, and Court
staff.” (Doc. 41-1 at 10, ¶ 64.) Plaintiffs estimate the proposed Settlement Class to be
57,763 members. (Doc. 41 at 19.)
B. The Release of Claims
“Released Parties” means Defendant and each entity which is controlled by,
controlling or under common control with Defendant and its past, present, and future direct
and indirect heirs, assigns, associates, corporations, investors, owners, parents,
subsidiaries, affiliates, divisions, officers, directors, shareholders, members, agents,
servants, employees, partners, attorneys, insurers, reinsurers, benefit plans, predecessors,
successors, managers, administrators, executors, and trustees.” (Doc. 41-1 at 10, ¶ 59.)
“Releasing Parties” means Plaintiffs and Settlement Class Members and their
respective past, present, and future heirs, devisees, beneficiaries, conservators, executors,
estates, administrators, assigns, trustees, receivers, agents, attorneys, accountants, financial
and other advisors, and any other representatives of any of these persons and entities. (Id.
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at ¶ 60.)
C. Summary of the Settlement Terms
Under the terms of the parties’ Settlement Agreement, Defendant shall fund a non-
reversionary Settlement Fund in the amount of $990,000.00. (Doc. 41-1 at 10-11, ¶ 70.)
Of that amount, the Settlement Agreement stipulates that Class Counsel “shall apply to the
Court for an award of attorney’s fees of up to” a third of that amount ($330,000.00), “plus
reimbursement of reasonable costs.” (Id. at 25, ¶ 104.) Costs of the settlement
administrator, Epiq Systems, Inc., shall also be deducted from the Settlement Fund. (Id. at
9, ¶ 63; id. at 11-12, ¶ 70.) Each Plaintiff shall receive a “Service Award” of $5,000.00.
(Id. at 25, ¶ 105.) Each Settlement Class Member can elect (a) payment based on
documented losses (up to $3,000.00 per Settlement Class Member) or (b) a flat cash
payment, which is estimated to be $100.00 per Settlement Class Member. (Id. at 13-14, ¶
73.) In addition, each Class Member may elect to receive up to one year of credit
monitoring. (Id. at ¶ 73(c).) Cash payments to Settlement Class Members may be reduced
or increased pro rata, depending on the dollar amount of valid claims. (See id. at ¶ 74.) “In
the event there are funds remaining in the Settlement Fund 20 days following the 180-day
period to cash checks or for Settlement Class Members to select the form of electronic
payment, following payment of Settlement Class Member Payments,” all remaining funds
will be distributed to an appropriate and mutually agreeable cy pres recipient to be
approved by the Court. (Id. at 24, ¶ 107.) The parties agree in their settlement agreement
that they would “propose the Electronic Privacy Information Center as the cy pres
recipient.” (Id.)
III. DISCUSSION
Pursuant to Rule 23 of the Federal Rules of Civil Procedure, approval by the court
is required for the settlement of class actions. Fed. R. Civ. P. 23(e) (“The claims, issues,
or defenses of a certified class – or a class proposed to be certified for purposes of
settlement – may be settled, voluntarily dismissed, or compromised only with the court’s
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approval.”) Court approval for a class action follows a two-step process. “The first step
is preliminary approval. During preliminary approval, the court conducts a preliminary
fairness evaluation to determine if notice of the class action settlement should issue to class
members and, if applicable, whether the proposed settlement class should be certified.”
Hartwig v. Am. Airlines Inc., CV-23-00969-PHX-SMB, 2025 WL 2831462, at *1 (D. Ariz.
Mar. 19, 2025) (citing David F. Herr, Ann. Manual Complex Lit. § 21.632 (4th ed. 2023)).
If a court preliminarily approves a settlement (with final approval contingent upon the
outcome of a fairness hearing), notice of the action is given to the class members and a
final fairness hearing occurs.
“[I]n the context of a case in which the parties reach a settlement agreement prior to
class certification, courts must peruse the proposed compromise to ratify both the propriety
of the certification and the fairness of the settlement.” Staton v. Boeing Co., 327 F.3d 938,
952 (9th Cir. 2003). In this case, no Class has been certified. Thus, this Court’s inquiry
at the preliminary approval stage is twofold: (1) the Court must first consider whether
certification of the Settlement Class is appropriate and (2) the Court must determine
whether preliminary approval of the settlement itself is fair, adequate, and reasonable. See
id. at 952-78 (conducting that twofold analysis).
A. Class Certification
To be certified, a class must satisfy all four requirements of Rule 23(a) of the Federal
Rules of Civil Procedure and at least one of the requirements of Rule 23(b) of the Federal
Rules of Civil Procedure. See Leyva v. Medline Indus., Inc., 716 F.3d 510, 512 (9th Cir.
2013) (internal citations omitted); Zinser v. Accufix Research Inst., Inc., 253 F.3d 1180,
1186 (9th Cir.), amended by 273 F.3d 1266 (9th Cir. 2001). The Court addresses Rule
23(a) and (b) in turn.
1. Rule 23(a)
“Rule 23(a) requires parties seeking class certification to establish: (1) that the class
is so large that joinder of all members is impracticable (numerosity); (2) that there are one
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or more questions of law or fact common to the class (commonality); (3) that the named
parties’ claims are typical of the class (typicality); and (4) that the class representatives will
fairly and adequately protect the interests of other members of the class (adequacy of
representation).” Ellis v. Costco Wholesale Corp., 657 F.3d 970, 980 (9th Cir. 2011) (citing
Fed. R. Civ. P. 23(a)). The Court considers each of the four requirements.
a. Numerosity
First, a proposed class must be “so numerous that joinder of all members is
impracticable.” Fed. R. Civ. P. 23(a)(1). “A proposed class generally satisfies the
numerosity requirement if the class has 40 or more members.” Horton v. USAA Cas. Ins.
Co., 266 F.R.D. 360, 365 (D. Ariz. 2009) (internal citations omitted). As in Horton, where
the Court found that a class comprised of “thousands of members from across the United
States,” id., this Court finds the proposed Class in this case of an estimated 57,763 members
to be sufficiently numerous to satisfy this requirement.
b. Commonality
Next, there must be “questions of law or fact common to the class” members. Fed.
R. Civ. P. 23(a)(2). That is, the class members’ claims “must depend upon a common
contention,” and that common contention “must be of such a nature that it is capable of
classwide resolution—which means that determination of its truth or falsity will resolve an
issue that is central to the validity of each one of the claims in one stroke.” Wal-Mart
Stores, Inc. v. Dukes, 564 U.S. 338, 350 (2011). “This requirement is construed
permissively.” Horton, 266 F.R.D. at 365 (citing Garrison v. Asotin Cnty., 251 F.R.D.
566, 569 (E.D. Wash. 2008)). In the case at bar, Plaintiffs allege that the Class Members’
“common questions include, inter alia, whether [Defendant] engaged in the wrongful
conduct alleged; whether Class Members[’] Private Information was comprised in the Data
Incident; whether [Defendant] owed a duty to Plaintiffs and Class members; [and] whether
[Defendant] breached its duties.” (Doc. 41 at 19-20.) The Court concludes those questions
hinge on the same, alleged “system-wide practice or policy that affects all putative class
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members.” See Armstrong v. Davis, 275 F.3d 849, 868 (9th Cir. 2001), abrogated on other
grounds by Johnson v. California, 543 U.S. 499, 504–05 (2005)). Thus, the commonality
requirement is met.
c. Typicality
The third requirement of Rule 23(a) is typicality. Fed. R. Civ. P. 23(a)(3). “The
commonality and typicality requirements of Rule 23(a) tend to merge.” Staton v. Boeing
Co., 327 F.3d 938, 957 (9th Cir. 2003) (quoting Gen. Tel. Co. of Southwest v. Falcon, 457
U.S. 147, 157 n.13 (1982)). While commonality requires that plaintiffs’ grievances must
share a common question of law or fact, typicality requires “that the claims of the class
representatives be typical of those of the class, and to be satisfied when each class
member’s claim arises from the same course of events, and each class member makes
similar legal arguments to prove the defendant’s liability.” Armstrong, 275 F.3d at 868
(internal quotation marks and citation omitted). “The requirement is permissive, such that
‘representative claims are typical if they are reasonably coextensive with those of absent
class members; they need not be substantially identical.’” Just Film v. Buono, Inc., 847
F.3d 1108, 1116 (9th Cir. 2017) (quoting Parsons v. Ryan, 754 F.3d 657, 685 (9th Cir.
2014) (internal quotation and citation omitted)). Here, Plaintiffs allege their (and Class
Members’) claims revolve around the same conduct and event (e.g., the data breach). (See
Doc. 41 at 20.) Thus, they are “reasonably coextensive with those of the absent class
members” and the typicality requirement is met.
d. Adequacy of representation
Finally, Rule 23(a) requires that the representative parties “fairly and adequately
protect the interests of the class.” Fed. R. Civ. P. 23(a)(4). “Determining whether
representation is adequate requires the court to consider two questions: ‘(a) do the named
plaintiffs and their counsel have any conflicts of interest with other class members and (b)
will the named plaintiffs and their counsel prosecute the action vigorously on behalf of the
class?’” Sali v. Coronado Reg’l Med. Ctr., 909 F.3d 996, 1007 (9th Cir. 2018) (quoting In
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re Mego Fin. Corp. Secs. Litig., 213 F.3d 454, 462 (9th Cir. 2000)). “Adequacy of
representation also depends on the qualifications of counsel.” Id. (internal citation
omitted). In this matter, no conflicts of interest have been brought to the Court’s attention
or are apparent from the Court’s review of the docketed materials. Similarly, after
reviewing Plaintiffs’ counsels’ Joint Declaration, the Court finds Class Counsel are
capable, experienced in class action matters, and qualified. (See Doc. 41-2.)
Having concluded all four requirements of Rule 23(a) are satisfied, the Court
proceeds to its Rule 23(b) analysis.
2. Rule 23(b)
The Motion at bar requests class certification under Rule 23(b)(3). (Doc. 41 at 22.)
Rule 23(b)(3) requires the Court “find[s] that the questions of law or fact common to class
members predominate over any questions affecting only individual members, and that a
class action is superior to other available methods for fairly and efficiently adjudicating the
controversy.” Fed. R. Civ. P. 23(b)(3).
Plaintiffs allege in their Motion that predominance is present because “Plaintiffs’
claims depend, first and foremost, on whether [Defendant] used reasonable data security
measures to protect consumers’ Private Information.” (Doc. 41 at 22.) In similar data
breach class action litigation, courts have reached a similar conclusion; that is, “where one
common question is whether the defendant used reasonable data security,” courts have
found the predominance requirement to be met. Sankar v. Cal. Northstate Univ., LLC, No.
2:24-cv-00473-DAD-JDP, 2025 WL 3539089, at *8 (E.D. Cal. Dec. 10, 2025); see also
Hashemi v. Bosley, Inc., No. CV 21-946 PSG (RAOx), 2022 WL 2155117, at *4 (C.D. Cal.
Feb. 22, 2022) (finding predominance and noting that variation in state law does not
undermine such a finding); In re Yahoo! Inc. Customer Data Sec. Breach Litig., No. 16-
MD-02752-LHK, 2020 WL 4212811, at *7 (N.D. Cal. July 22, 2020); In re Anthem, Inc.
Data Breach Litig., 327 F.R.D. 299, 312 (N.D. Cal. 2018). Similarly, those courts have
found superiority in those data breach class action cases, because such cases share a
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“common nucleus of facts and potential legal remedies” that can “resolved for all members
more efficiently and expeditiously in a single action.” See id. (quoting Hanlon v. Chrysler
Corp., 150 F.3d 1011, 1022 (9th Cir. 1998)); see also Hashemi, 2022 WL 2155117, at *4
(citing Lerwill v. Inflight Motion Pictures, Inc., 582 F.2d 507, 512 (9th Cir. 1978) and
finding superiority where requiring litigation by over a hundred thousand separate
individuals would be inefficient, costly, duplicative, and risk conflicting proceedings); In
re Yahoo! Inc. Customer Data Sec. Breach Litig., 2020 WL 4212811, at *7; In re Anthem,
Inc. Data Breach Litig., 327 F.R.D. at 315-16. This Court similarly finds in this matter, as
this “class action is the most efficient and effective means of resolving the controversy”
that is common to the thousands of class members. See Wolin v. Jaguar Land Rover N.
Am., LLC, 617 F.3d 1168, 1175 (9th Cir. 2010).
3. Conclusion on Class Certification
For the reasons described above, the requirements for preliminary certification of
the Class under Rule 23 have been met. Consequently, undersigned will recommend that
the Class be conditionally certified.
B. Preliminary Settlement Approval
“When considering whether to grant preliminary approval of a settlement
agreement, the Court must evaluate the fairness, reasonableness, and adequacy of the
proposed settlement.” Horton, 266 F.R.D. at 363 (citing In re Syncor ERISA Litigation,
516 F.3d 1095,1100 (9th Cir. 2008)). “Therefore, at the preliminary approval stage, courts
need only evaluate ‘whether the proposed settlement (1) appears to be the product of
serious, informed, non-collusive negotiations, (2) has no obvious deficiency, (3) does not
improperly grant preferential treatment to class representatives or segments of the class and
(4) falls within the range of possible approval.’” Hartwig, 2025 WL 2831462, at *1
(quoting Horton, 266 F.R.D. at 363). To do this, “the Court reviews the parties’ proposed
settlement agreement according to the four preliminary approval considerations and
conducts a cursory review of its terms in deciding whether to order the parties to send the
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proposal to the class members and conduct the final fairness hearing.” Id. (internal citation
omitted). The Court conducts this evaluation mindful of the Ninth Circuit’s “strong
judicial policy that favors settlements, particularly where complex class action litigation is
concerned.” Class Plaintiffs v. City of Seattle, 955 F.2d 1268, 1276 (9th Cir. 1992)
(internal citations omitted). However, the Court remains aware that because a class has
not been formally certified, “there is an even greater potential for a breach of fiduciary duty
owed the class during settlement. Accordingly, such agreements must withstand an even
higher level of scrutiny for evidence of collusion or other conflicts of interest than is
ordinarily required under Rule 23(e) before securing the court’s approval as fair.” In re
Bluetooth Headset Products Liability Litigation, 654 F.3d 935, 946 (9th Cir. 2011).
1. The Settlement Process
“The first consideration pertains to the means and negotiations by which the parties
settled the action.” Hartwig, 2025 WL 2831462, at *2 (citing Horton, 266 F.R.D. at 363).
Here, the parties engaged in a period of arm’s length negotiation, exchanged informal
discovery, and then participated in a day-long, arm’s length mediation using a neutral and
experienced mediator. (Doc. 41-2 at 4, ¶¶ 11-13.) The mediator is considered a leading
mediator in data breach cases. (Doc. 41 at 30.) Because the Court finds the settlement
agreement is the product of informed, serious, and arm’s length negotiations between the
parties, the Court finds this factor is satisfied. See Hartwig, 2025 WL 2831462, at *2.
2. Obvious Deficiencies
The Court next considers whether the settlement agreement contains obvious
deficiencies, which may “include ‘any subtle signs that class counsel have allowed pursuit
of their own self-interests to infect the negotiations.’” Hartwig, 2025 WL 2831462, at *2
(quoting McKinney-Drobnis v. Oreshack, 16 F.4th 594, 607 (9th Cir. 2021)). Those “subtle
signs,” known as the “Bluetooth factors,” are: (1) “when counsel receive[s] a
disproportionate distribution of the settlement; (2) when the parties negotiate a clear-sailing
arrangement, under which the defendant agrees not to challenge a request for an agreed-
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upon attorney’s fee; and (3) when the agreement contains a kicker or reverter clause that
returns unawarded fees to the defendant, rather than the class.” McKinney-Drobnis, 16
F.4th at 607-08 (quoting Briseño v. Henderson, 998 F.3d 1014, 1023 (9th Cir. 2021)).
“District courts must apply the Bluetooth factors in examining pre-certification settlements
‘to smoke out potential collusion.’” Id. at 608 (quoting Henderson, 998 F.3d at 1023).
Here, undersigned could not locate in the instant Motion any specific discussion of
the Bluetooth factors described immediately above. (See Doc. 41.) As to the first Bluetooth
factor, it appears the amount of attorney’s fees has the potential to be disproportionate.
Specifically, under the settlement agreement, Class Counsel may recover up to a third of
the settlement amount (i.e., $330,000.00 of a $990,000.00 fund), plus costs. (Doc. 41-1 at
25, ¶ 104.) By contrast, the Class Members would receive far less; with documented losses,
a Member may recover up to $3,000.00, and without those documented losses, a Member
would be eligible for a pro rata share up to approximately $100.00. (Id. at 13-14, ¶ 73.)
Plaintiffs would each receive a $5,000.00 Service Award, for a total of $25.000.00. (Id. at
25, ¶ 105.) In addition, the costs of the Settlement Administrator would need to be paid
from the settlement fund. However, the Court emphasizes that the settlement agreement
provides that Class Counsel can apply for “up to” one-third of the fund for attorney’s fees.
(Id. at 25, ¶ 104.) The award could also be less; ultimately, the figure would be up to the
Court.1 As to the second and third Bluetooth factors, the Court finds they support approval,
as the settlement agreement does not contain any provision (a) stating Defendant agrees
not to challenge Class Counsel’s request for an agreed-upon attorney’s fee or (b) that
1 “When a negotiated class action settlement includes an award of attorneys’ fees, the
district court ‘ha[s] an independent obligation to ensure that the award, like the settlement
itself, is reasonable, even if the parties have already agreed to an amount.’” Sankar, 2025
WL 3539089, at *11 (quoting Bluetooth, 654 F.3d at 941) (brackets in original). District
courts may use the percentage-of-recovery method or the lodestar method to determine a
reasonable amount of attorney’s fees. Bluetooth, 654 F.3d at 942. Under the percentage-
of-recovery method, the benchmark for such fees in a class action case in the Ninth Circuit
is 25%. Id. Regardless of which method is used, the Ninth Circuit has “encouraged courts
to guard against an unreasonable result by cross-checking their calculations against” the
other method. Id. at 944.
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unawarded fees would revert to Defendant.
Thus, on balance, at this preliminary stage, this “obvious deficiencies” factor does
not weigh against preliminary approval.
3. Preferential Treatment
“The Ninth Circuit has instructed that district courts must be ‘particularly vigilant’
for signs that counsel has allowed the ‘self-interests’ of ‘certain class members to infect
negotiations.’” Hartwig, 2025 WL 2831462, at *2 (quoting Bluetooth, 654 F.3d at 947)).
Incentive or “service” awards, paid to named plaintiffs, are “fairly typical in class action
cases.” Rodriguez v. W. Publ’g Corp., 563 F.3d 948, 958 (9th Cir. 2011). Service awards
are “discretionary” and “intended to compensate class representatives for work done on
behalf of the class, to make up for financial or reputational risk undertaken in bringing the
action, and, sometimes, to recognize their willingness to act as a private attorney general.”
Id. at 958-59. “Such payments are to be evaluated individually, and the court should look
to factors such as ‘the actions the plaintiff has taken to protect the interests of the class, the
degree to which the class has benefitted from those actions ... the amount of time and effort
the plaintiff expended in pursuing the litigation ... and reasonabl[e] fear[s of] workplace
retaliation.’” Sankar, 2025 WL 3539089, at *12 (quoting Staton, 327 F.3d at 977) (brackets
and ellipses in original).
Here, the settlement agreement provides that each of the five named Plaintiffs will
receive a Service Award of $5,000.00. (Doc. 41-1 at 25, ¶ 105.) An award of $5,000.00
has been found to be reasonable by the Ninth Circuit, even when the amount is considerably
more than the average Class Member’s recovery. See In re Online DVD-Rental Antitrust
Litig., 779 F.3d 934, 947 (9th Cir. 2015) (citing Staton, 327 F.3d at 976-77, where the
Circuit also found $5,000.00 to be reasonable). Furthermore, the total of $25,000.00 in
Service Awards represents approximately 2.53% of the total settlement fund – far less than
the 6% figure found acceptable by the Ninth Circuit in Online DVD. See id. The Court
finds this factor weighs in favor of preliminary approval.
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4. Range of Possible Approval
“To determine whether a settlement ‘falls within the range of possible approval,’
courts focus on ‘substantive fairness and adequacy’ and ‘consider plaintiffs’ expected
recovery balanced against the value of the settlement offer.’” Hartwig, 2025 WL 2831462,
at *3 (quoting In re Tableware Antitrust Litig., 484 F. Supp. 2d 1078, 1080 (N.D. Cal.
2007)). Notably, however, “[t]he fact that a proposed settlement may only amount to a
fraction of the potential recovery does not, in and of itself, mean that the proposed
settlement is grossly inadequate and should be disapproved.” Id. (quoting Linney v.
Cellular Alaska P’ship, 151 F.3d 1234, 1242 (9th Cir.1998) (cleaned up) (brackets in
original)). Indeed, “[i]t is well-settled law that a cash settlement amounting to only a
fraction of the potential recovery will not per se render the settlement inadequate or unfair.”
Officers for Justice v. Civil Serv. Comm’n of City & Cnty. of San Francisco, 688 F.2d 615,
628 (9th Cir. 1982). Low percentage recoveries are “certainly not unheard of, particularly
in the data breach context.” Sankar, 2025 WL 3539089, at *10 (citing In re 23andMe, Inc.
Customer Data Sec. Breach Litig., No. 24-md-03098-EMC, 2024 WL 4982986, at *18
(N.D. Cal. Dec. 4, 2024)). “‘Although the Court may approve a settlement for a low
recovery percentage,’ the plaintiff must ‘demonstrate that his claims have been adequately
valued.’” Id. (quoting Guthrie v. ITS Logistics, LLC, No. 1:21-cv-00729-ADA-EPG, 2023
WL 4288943, at *1 (E.D. Cal. June 30, 2023)).
Here, the total settlement fund is $990,000.00. Although the settlement agreement
states each Class Member would be eligible to receive up to $100.002, a recovery anywhere
near $100.00 appears to be mathematically impossible; there are 57,763 putative Class
Members, so the fund would have to be over $5.7 million to reach such a recovery. And
of course, one must deduct the other fees and costs payable under the settlement agreement.
Under the terms of the settlement agreement, Class Counsel’s fees may be up to
2 As stated supra, Settlement Class Members who have documented losses would be
eligible to recover up to $3,000.00. For purposes of this analysis, though, the Court
assumes the lower amount of recovery.
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$330,000.00; costs of Class Counsel must be paid; costs of the settlement administrator
must be paid; and Service Awards would be paid. The remainder would therefore be
divided pro rata, yielding a much smaller recovery per Class Member than $100.00. At
this preliminary stage, no one knows exactly how many Class Members will opt-in, which
cash payment option they will choose, and the like. However, it is plausible that each Class
Member’s recovery will be quite small. This result, though, is not fatal to the settlement
agreement, because data breach litigation carries great risk to plaintiffs. See Sankar, 2025
WL 3539089, at *10. Specifically, plaintiffs in such cases have historically “experienced
minimal success in moving for class certification,” and decertification may occur. Carter
v. Vivendi Ticketing US LLC, No. 22-cv-01981-CJC-DFM, 2023 WL 8153712, at *6 (C.D.
Cal. Oct. 30, 2023) (internal citation omitted); see also In re Anthem, Inc. Data Breach
Litig., 327 F.R.D. at 318 (discussing risks associated with maintaining a class). In the same
vein, data breach litigation is fairly new and undeveloped; settlement provides certainty in
the face of an uncertain landscape where there is a “dearth of precedent.” See In re Anthem,
Inc. Data Breach Litig., 327 F.R.D. at 318. “More broadly, evaluating the strength of a
data breach case is difficult because ‘there have been no data breach cases tried to verdict,
and only a handful of cases have achieved class certification.’” Sankar, 2025 WL 3539089,
at *10 (quoting In re PostMeds, Inc. Data Breach Litig., No. 23-cv-05710-HSG, 2024 WL
4894293, at *6 (N.D. Cal. Nov. 26, 2024)). In short, “the risks, expense, complexity, and
likely duration of further litigation also support final approval.” In re Yahoo! Inc.
Customer Data Sec. Breach Litig., 2020 WL 4212811, at *9. Challenges to the class would
be avoided, as would more discovery and potential appeals. See id. “By contrast, the
Settlement provides the Settlement Class with timely and certain recovery.” Id. Moreover,
under the terms of the settlement agreement, all Settlement Class Members will be afforded
a year of credit monitoring, which would provide them with additional relief. (Doc. 41-1
at 13, ¶ 73.)
Therefore, the Court finds this factor supports approval of the settlement agreement,
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even if the ultimate amount of monetary recovery per Class Member may be small. See
Sankar, 2025 WL 3539089, at *11 (citing Carter, 2023 WL 8153712, at *5 (“[O]ther courts
have approved settlements in privacy and security cases when each class member received
just a few dollars or less.”) and In re Anthem, Inc. Data Breach Litig., 327 F.R.D. at 318-
19 (approving settlement that averaged $1.45 per class member)).
IV. CONCLUSION AND RECOMMENDATION
For the reasons set forth above, undersigned will recommend that the Court grant
the instant, unopposed Motion. That is, undersigned will recommend the Class be
conditionally certified and grant preliminary approval of the proposed settlement, subject
to a final fairness hearing. Undersigned will also recommend that Plaintiffs be appointed
as Class Representatives; Gary M. Klinger, Andrew Shamis, Raina Borrelli, and Jeff
Ostrow be appointed as Class Counsel for settlement purposes; and Epiq Systems, Inc. as
Settlement Administrator. Further, undersigned will recommend that the Court utilize the
proposed Notice from the parties (Exhs. 1 through 4 of Doc. 41-1, pages 36-56) as it
complies with Rule 23(e)(1). See Fed. R. Civ. P. 23(e)(1) (providing requirements for
notice to putative class members). Undersigned will also recommend the Court order
notice be distributed in accordance with the terms of the parties’ settlement agreement.
Finally, undersigned will recommend the fairness hearing before the District Judge be
scheduled for a date that provides putative Settlement Class Members with sufficient
advance notice to be able to attend if they wish.
IT IS THEREFORE RECOMMENDED that Plaintiffs’ Unopposed Motion for
Preliminary Approval of Class Action Settlement (Doc. 41) be GRANTED as follows:
1. Conditionally certify the Settlement Class as: “[A]ll living individuals residing in
the United States who were sent a notice by Defendant that their Private Information
may have been impacted in the Data Incident. Excluded from the Settlement Class
are (a) all persons who are employees, directors, officers, and agents of Defendant;
(b) governmental entities; and (c) the Judge assigned to the Action, that Judge’s
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immediate family, and Court staff;
2. Find that the proposed Settlement is sufficiently fair, reasonable, and adequate to
warrant providing notice to the Settlement Class. This determination permitting
notice to the Settlement Class would not be a final finding, but rather a
determination that there is probable cause to submit the proposed Settlement
Agreement to the Settlement Class and to hold a Fairness Hearing to consider the
fairness, reasonableness, and adequacy of the proposed Settlement;
3. Adopt the deadlines contained in the Settlement Agreement;
4. For settlement purposes only, appoint Gary M. Klinger, Andrew Shamis, Raina
Borrelli, and Jeff Ostrow as Class Counsel;
5. For settlement purposes only, appoint Plaintiffs Adam Voelker, Alexxi Guyette,
Janelle Bailey, Brittany Evans, and Baltazar DaRosa as Class Representatives;
6. Appoint Epiq Systems, Inc., as Settlement Administrator in accordance with Section
VII of the Settlement Agreement, subject to its agreement to perform services;
7. Order that the Settlement Administrator shall prepare and send all notices that are
required by the Class Action Fairness Act of 2005 (“CAFA”) as specified in 28
U.S.C. § 1715. Class Counsel and Counsel for Defendant shall cooperate promptly
and fully in the preparation of such notices, including providing Defendant with any
and all information in their possession necessary for the preparation of these notices.
Defendant shall provide courtesy copies of the notices to Class Counsel for the
purpose of implementing the settlement.
8. Approve the Class Notice proposed by the parties in Exhibits 1-4 of Doc. 41-1
(found at pages 36-56, respectively), and direct the Settlement Administrator to send
the Settlement Class Notice in accordance with the Settlement terms set forth in the
Settlement Agreement;
9. Find the proposed Settlement Class Notice as set forth in the Settlement Agreement
(i) is the best practicable notice, (ii) is reasonably calculated, under the
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circumstances, to apprise the Settling Class of the pendency of the Litigation and of
their right to object to or to exclude themselves from the proposed settlement, (iii)
is reasonable and constitutes due, adequate and sufficient notice to all persons
entitled to receive notice, and (iv) meets all requirements of applicable law;
10. Order that Settlement Class Members may opt-out or object up to thirty (30) days
before the original scheduled Final Approval Hearing (the “Opt-Out Deadline”).
Any members of the Settlement Class Members who wish to be excluded (“opt-
out”) from the Settlement Class must send a written request to the designated Post
Office box established by the Settlement Administrator postmarked on or before the
Opt-Out Deadline. Members of the Settlement Class may not opt-out of the
Settlement by submitting requests to opt-out as a group or class, but must in each
instance individually and personally submit an opt-out request. All Settlement Class
Members who opt-out of the Settlement will not be eligible to receive any benefits
under the Settlement, will not be bound by any further orders or judgments entered
for or against the Settlement Class, and will preserve their ability to independently
pursue any claims they may have against Defendant. Any member of the Settlement
Class Members who does not properly and timely opt-out of the Settlement shall,
upon entry of the Final Approval Order and Final Judgment, be bound by all the
terms and provisions of the Settlement Agreement and Released Claims, whether or
not such Settlement Class Member objected to the Settlement and whether or not
such Settlement Class Member received consideration under the Settlement
Agreement;
11. Order that any person or entity who or which does not elect to be excluded from the
Settlement Class may, but need not, enter an appearance through their own attorney.
Settlement Class Members who do not timely object or opt-out and that do not have
an attorney who enters an appearance on their behalf will be represented by Class
Counsel. Any person or entity who or which does not elect to be excluded from the
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Settlement Class may object to the proposed Settlement. Any Settlement Class
Member may object to, among other things, (a) the proposed Settlement, (b) entry
of Final Approval Order and the judgment approving the Settlement, (c) Class
Counsel’s Application for fees and expenses, or (d) the service award request, by (i)
serving a written objection upon Proposed Class Counsel and Defendant’s counsel
or (ii) filing the written objection with the Court through the Court’s ECF system,
with service on Proposed Class Counsel and Defendant’s counsel made through the
ECF system. Any Settlement Class Member making the objection (an “Objector”)
must submit the objection in writing and include all the following information: a)
the objecting Settlement Class members’ full name, current address, telephone
number, and email address (if any); (ii) contain the objecting Settlement Class
Members’ signature; and (iii) set forth a statement of all ground for the objection,
including any legal support for the objection that the objector believes applicable.
To be timely, any objection must be filed with the Clerk of Court no later than sixty
(60) Days after Notice Date. If the objecting Settlement Class Member intends to
appear at the Final Approval Hearing through counsel, the notice of appearance filed
with the Court must also identify the attorney(s) representing the objector who will
appear at the Final Approval Hearing and include each such attorney’s name,
address, phone number, email address, state bar(s) to which counsel is admitted. In
order to be timely, objections, along with any notices of intent to appear, must be
mailed to Class Counsel and Defendant’s Counsel with a postmark date of no later
than thirty (30) days before the initial Final Approval Hearing or filed with the Court
no later than thirty (30) days before the initial Final Approval Hearing;
12. Order that Settlement Class Members who have filed and served valid and timely
notices of objection shall be entitled to be heard at the Final Fairness Hearing. Any
Settlement Class Member who does not timely mail or file and serve an objection
in writing in accordance with the procedure set forth in the Class Notice and
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mandated in this Order shall be deemed to have waived any objection to (a) the
Settlement; (b) the Released Claims and Released Parties; (c) entry of Final
Approval Order or any judgment; (d) Proposed Class Counsel’s application for fees,
costs, and expenses, and/or (e) the Service Award requests for the named Plaintiffs,
whether by appeal, collateral attack, or otherwise;
13. Order that Settlement Class Members need not appear at the hearing or take any
other action to indicate their approval. Upon entry of the Order and Final Judgment,
all members of the Settlement Class who have not personally and timely requested
to be excluded from the Settlement Class will be enjoined from proceeding against
Enroll with respect to all of the Released Claims and the Released Parties;
14. Set the Final Approval (Fairness) Hearing on a date and time providing Settlement
Class Members with sufficient notice and opportunity to be heard, with that
date/time subject to adjournment by the Court without further notice to the members
of the Settlement Class, other than that which may be posted by the Court. Should
the Court adjourn the date for the Final Approval Hearing, that shall not alter the
deadlines for mailing and publication of notice, the Opt-Out Deadline, or the
deadlines for submissions of settlement objections, claims, and notices of intention
to appear at the Final Fairness Hearing unless those dates are explicitly changed by
subsequent Order. The Court may also decide to hold the hearing via zoom or
telephonically. Instructions on how to appear at the Final Fairness Hearing will be
posted on the Settlement Website;
15. Order that in the event the Settlement Agreement and the proposed settlement are
terminated in accordance with the applicable provisions of the Settlement
Agreement, the Settlement Agreement, the proposed Settlement, and all related
proceedings shall, except as expressly provided to the contrary in the Settlement
Agreement, become null and void, shall have no further force and effect, and
Settlement Class Members shall retain all of their current rights to assert any and all
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claims against Defendant, and shall retain any and all of their current defenses and
arguments thereto (including but not limited to arguments that the requirements of
Fed. R. Civ. P. 23(a) and (b)(3) are not satisfied for purposes of continued litigation.)
The Litigation shall thereupon revert forthwith to its respective procedural and
substantive status prior to the date of execution of the Settlement Agreement and
shall proceed as if the Settlement Agreement and all other related orders and papers
had not been executed; and
16. Order that neither the Court’s Order nor the Settlement Agreement nor any other
settlement-related document nor anything contained herein or therein or
contemplated hereby or thereby nor any proceedings undertaken in accordance with
the terms set forth in the Settlement Agreement or herein or in any other settlement
related document, shall constitute, be construed as or be deemed to be evidence of
or an admission or concession by Defendant as to the validity of any claim that has
been or could have been asserted against it or as to any liability by it as to any matter
set forth in this Order, or as to the propriety of class certification for any purposes
other than for purposes of the current proposed Settlement.
EFFECT OF RECOMMENDATION
This recommendation is not an order that is immediately appealable to the Ninth
Circuit Court of Appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of
Appellate Procedure, should not be filed until entry of the district court’s judgment. The
parties shall have 14 days from the date of service of a copy of this recommendation within
which to file specific written objections with the Court. See 28 U.S.C. § 636(b)(1); Fed.
R. Civ. P. 6(a), 6(b) and 72. Thereafter, the parties have 14 days within which to file a
response to the objections.
Failure to timely file objections to the Magistrate Judge’s Report and
Recommendation may result in the acceptance of the Report and Recommendation by the
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district court without further review. See United States v. Reyna-Tapia, 328 F.3d 1114,
1121 (9th Cir. 2003). Failure to timely file objections to any factual determinations of the
Magistrate Judge will be considered a waiver of a party’s right to appellate review of the
findings of fact in an order of judgment entered pursuant to the Magistrate Judge’s
recommendation. See Fed. R. Civ. P. 72.
Dated this 10th day of February, 2026.
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