Federal Judge Turns Down Proposed Yahoo Data Breach Class-Action Settlement

The proposed settlement for a class-action suit which came as the result of a massive data breach at Yahoo has been rejected by a judge…

US Federal District Judge Lucy Koh has turned down a class-action settlement proposal made by defendant Yahoo. The legal action came as the result of the company failing to disclose two major data breaches, affectig 3 billion users from 2014 to 2016.

Yahoo Data Breach Lawsuit Settlement Rejected by Federal Judge

Yahoo said it would pay out $50 million and provide two years of free credit monitoring to approximately 200 million people in the United States and Israel. But Koh, rejected the offer, writing: 

“The proposed notice does not disclose the costs of credit monitoring services or costs for class notice and settlement administration, and does not disclose the total size of the settlement fund. Without knowing the total size of the settlement fund, class members cannot assess the reasonableness of the settlement.”

Yahoo did not make the scope of its breach clear until July 2016, after it agreed to sell its internet business to communication and media company Verizon for about $5 billion.

The denial isn’t surprising given the number of victims. The Yahoo data breach remains one of the largest in history. In fact, it ranks first and third, respectively, among others. By comparison, the breach at Marriott last fall stands at parity with Yahoo’s 2014 breach, with 500 million users impacted.

Ashley Lipman

Ashley Lipman is a super-connector with Outreachmama who helps businesses find their audience online through outreach, partnerships, and networking.