Court Approves Jim Koons Data Breach Class Action Settlement
by Brian Eckert
A Maryland federal judge has approved a class action settlement against Jim Koons Automotive Company over a 2021 data breach that compromised consumers’ personal information. Milberg’s David K. Lietz served as class counsel in the case, which provides compensation for out-of-pocket losses and lost time related to the cybersecurity incident.
What is This Case About?
The settlement stems from the lawsuit Morelli v. Jim Koons Management Company, filed in February 2022.
Jim Koons Automotive Group, a Washington, D.C. area car dealership, discovered a data breach in June 2022 that exposed consumers’ personally identifiable information (PII), including full names, addresses, driver’s license numbers, Social Security numbers, and financial information. Koons sent a data breach notification letter to the approximately 114,000 customers affected by the security incident.
The Court finds that the Settlement Agreement is fair, reasonable, adequate and in the best interests of the Settlement Class Members.
Morelli v. Jim Koons Management Company claimed that Koons failed to implement or maintain adequate data security measures to protect the PII of current and former job applicants, employees, and customers. These alleged failures caused class members to suffer harm, such as an increased risk of fraud and identity theft, the lawsuit also claimed.
In October 2022, the lawsuit was certified as a class action. As part of the certification, the group of eligible class members was defined and attorneys were selected to represent the class. Class members were notified of the terms of a proposed settlement agreement in November 2022. In February 2023, the court issued final approval of the settlement terms.
Who is Included in the Settlement?
Per the class action certification, eligible class members were defined as:
- All persons to whom Jim Koons Management Company sent a “Notice of Security” letter dated on or about January 14, 2022 regarding the Data Security Incident.
If you received a notification letter from Koons, you are a member of the class. The letter looks like this.
The proposed settlement set a claim deadline of February 23, 2023. Class members were also given the option to exclude themselves from the settlement.
Anyone who submitted a claim form waived the right to sue Koons for the claims made in the lawsuit. However, class members that excluded themselves, or “opted out” of the settlement, maintained the right to file an individual data breach lawsuit against Koons. Class members who did nothing remained part of the class but will not get any settlement benefits.
How Much Can Class Members Receive?
Eligible class members who submitted a timely and valid claim form can receive the following settlement benefits:
- Compensation for out-of-pocket losses and lost time, including bank fees, credit report fees, travel, and identity theft insurance products
- Compensation for documented identity theft and monetary losses
- Credit monitoring services
- A $100 cash benefit to California residents
The actual amount payable to class members ranges from up to $500 for out of pocket expenses to up to $4,500 for actual losses (i.e., identity theft and monetary losses). Submitted claims are subject to approval by a third-party claims administrator.
Why Was This Case Filed as a Class Action?
Data breaches like the one that impacted Jim Koons customers are often best-handled as class action lawsuits.
Litigation is expensive. Plaintiffs must weigh litigation costs against the potential compensation they can recover. If they can only recover a few hundred or a few thousand dollars, it probably isn’t worth the cost of hiring a lawyer.
However, in a data breach incident that impacts many thousands of individuals, those individuals can collectively sue under federal class action lawsuit rules. By joining forces and sharing costs, litigation that would otherwise be prohibitively expensive becomes viable. Attorneys are typically paid out of the settlement pool, and the legal fees may be capped at a certain amount.
Class action lawyers work on a contingency-fee basis. They pay the upfront costs associated with the lawsuit, and agree to be paid only if the case results in class members receiving compensation. This is known as contingency fee litigation.
What Role Did Milberg Play in the Lawsuit?
The court overseeing a class action lawsuit appoints attorneys to represent the interests of all class members. These attorneys come from the law firms that file the lawsuit, and they’re known as “class counsel.” David K. Lietz of Milberg was appointed class counsel in the Koons data breach class action.
Judges must consider several factors when appointing class counsel. Among these factors are the counsel’s experience in handling class actions, their knowledge of the applicable law, and the resources they can commit to representing the class.
Milberg pioneered the use of federal class action litigation and remains a national leader in class actions. We have the knowledge, experience, resources, and track record needed to take on large corporations. Our attorneys are consistently named as class counsel in lawsuits that provide real benefits to members.
To learn more about our cases and settlements, visit the Milberg news page.