June 7, 2021

Eleventh Circuit upholds $380M Equifax settlement

On June 3, 2021, the Eleventh Circuit of the US Court of Appeals affirmed the decision of a Georgia district court to approve a 147 million person $380 million class action settlement related to the 2017 Equifax breach – a settlement the district court called one of largest and most comprehensive data breach recoveries in US history –  choosing only to reverse the class representative’s incentive awards after holding that such awards were prohibited.  The Eleventh Circuit received the case after 6 class members appealed the final approval of the settlement, that was granted by the US District Court for the Northern District of Georgia on January 13, 2020. 

In September 2020, several months after the Equifax settlement was approved, the Eleventh Circuit held in Johnson v. NPAS Solutions LLC that the act of compensating class representatives for their time and essentially rewarding them for filing a lawsuit, was prohibited based on two US Supreme Court cases from the 1880s.  In the Equifax appeal, the Eleventh Circuit held, based on Johnson, that incentive awards in the Equifax settlement were also prohibited as a matter of law.  However, the Eleventh Circuit rejected the objectors’ request to vacate the entire settlement, finding instead that the settlement was not affected by the  prohibited incentive awards provision.  The case was remanded to the District Court solely for the purpose vacating the incentive awards, and otherwise leaves the settlement agreement intact. 

Eleventh Circuit Opinion