Opinion: One Man Can Bring Equifax to Justice (and Get You Your Money)

From today’s New York Times:

On Dec. 19, District Judge Thomas Thrash of Atlanta will hold a final approval hearing for the Equifax 2017 data breach settlement. There’s a lot at stake. If the settlement is approved, the $31 million pool earmarked for claims will be paid out to some victims. Others will get free credit monitoring (because the cash reward set aside for victims was so small, if all 147 million people affected by the breach filed a claim, everyone would get just 21 cents).

There’s another option. As I wrote in a September column, victims could file a formal, legal objection, which would nullify the settlement. If Judge Thrash finds those objections convincing, Equifax’s class-action counsel wouldn’t receive their $77.5 million fee and Equifax would be liable again to face a substantial penalty for the breach. I’m happy to report quite a few people — maybe even a record number — did just that.

Over the past month Reuben Metcalfe, the founder of Class Action Inc., helped 911 individuals object (another 294 objected but did not provide signatures by the Nov. 19 deadline) by creating a chatbot tool that allowed victims to file objections automatically for the Equifax settlement at no cost (Class Action Inc. waived its 5 percent fee for Equifax). Theodore H. Frank, a lawyer who specializes in class-action suits, has jumped in the ring himself along with another victim, David Watkins. Frank’s objections, which are more formal and detailed than Metcalfe’s many automated ones, argue that the settlement is too broad and doesn’t take into account state-by-state protections for data breaches (in Utah, where Watkins lives, victims could claim damages up to $2,000).

Now it’s up to Judge Thrash to sift through the settlement and its objections and decide. Thanks to Metcalfe and Frank, he’s likely to be feeling some pressure. Back in September a class-action lawyer told me that even if only 1,000 people object, it can send a powerful message. Frank is hopeful the settlement will look weak on its own merits. “If the judge gives an honest look, he’ll realize it doesn’t meet muster,” he told me recently.

I’d argue there’s even more resting on Judge Thrash’s shoulders, including whether companies can get away with abusing our data in the future. Metcalfe, who has steeped himself in the world of class-action suits, suggested that the settlements, initially a method for accountability, have become a mechanism for companies to knowingly skirt liability for not protecting consumers. “It’s becoming cheaper to say sorry after the fact than to obey the law in the first place,” he told me.

This feels especially true in the world of data privacy, where breaches are so frequent that a discovery last week of an open database containing the personal information of 1.2 billion people hardly made news. We seem locked in a vicious cycle: Companies that gather and trade data have few checks or regulations. This allows them to collect more, which means more money. And deeper pockets make it harder to impose meaningful penalties that might deter repeat and future offenders (see: the Federal Trade Commission’s $5 billion slap on the wrist of Facebook). Judge Thrash, then, has a unique opportunity to make a statement by objecting.

Read the complete article here.