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Facebook Pays $6.5 Million to End Fee Fight in Breach Case (1)

June 24, 2021, 4:38 PM; Updated: June 24, 2021, 6:09 PM

Facebook Inc. will pay $6.5 million to class counsel in a lawsuit that alleged the company’s negligence allowed hackers to obtain user information via software bugs, ending a dispute over attorneys’ fees.

The parties reached an agreement prior to a hearing scheduled for Thursday, they told Judge William Alsup. The amount is described in a stipulation as “a material reduction from the total attorneys’ fees and litigation costs Plaintiff initially sought.”

Stephen Adkins sued the social media giant in 2018, saying the personal identifying information of 50 million users was exposed “due to a flaw in Facebook’s code” that allowed hackers to take over user accounts. The company said the breach was made possible by a bug in the website’s “view as” feature, which was intended to increase user control over privacy.

The parties reached a settlement in the underlying class suit under which Facebook agreed to make numerous new security enhancements. Under the terms of the deal, class counsel agreed it would seek no more than $16 million for attorneys’ fees.

The court approved the settlement and class counsel sought $10.7 million in attorneys’ fees and $1.2 million in litigation expenses, but Facebook opposed that bid in March.

Alsup, of the U.S. District Court for the Northern District of California, approved the $6.5 million agreement via a remote hearing after asking the parties about the finality of the deal and about payments to a special master. The deal resolves all disputes in the case, and the special master will be paid from the established settlement fund, the parties said.

“The court will not have to get back into this attorneys’ fees issue in any respect going forward as to this case,” Alsup said in the telephonic hearing. “That is the basis on which I’m signing off on this settlement.”

Alsup asked the parties to submit an order ready for his signature to accept the settlement.

“I’m happy now with what I’ve heard. I’m giving you the OK, and as far as I’m concerned, this case is over.”

The class is represented by Morgan & Morgan Complex Litigation Group, Cohen Milstein Sellers & Toll PLLC, and Tadler Law LLP. Facebook is represented by Latham & Watkins LLP.

The case is Adkins v. Facebook Inc., N.D. Cal., No. 3:18-cv-05982, 6/24/21.

(Updates story with additional reporting in paragraphs seven through nine.)

To contact the reporter on this story: David McAfee in Los Angeles at dmcAfee@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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