Jessica M. Karmasek Feb. 26, 2015, 8:00am


SAN JOSE, Calif. (Legal Newsline) - Professional networking website LinkedIn has agreed to compensate 800,000 premium subscribers whose passwords were leaked in 2012.

Under a settlement tentatively approved by Judge Edward Davila for the U.S. District Court for the Northern District of California’s San Jose Division late last month, those users are eligible to make a claim on the settlement fund, worth $1.25 million.

 

“Following the dismissal of every other claim associated with this lawsuit, LinkedIn has agreed to this settlement to avoid the distraction and expense of ongoing litigation,” the company said in an emailed statement.

 

In June 2012, LinkedIn announced that hackers had stolen and published nearly 6.5 million member passwords on a Russian hacker website. The stolen passwords had been “hashed,” but not “salted.” Salting is a way to randomize hashes.

 

Soon after, plaintiff Katie Szpyrka brought a putative class action in the Northern District of California.

 

She alleged claims for damages and injunctive relief against LinkedIn for failing to “properly safeguard” her personal information in accordance with industry standards and its own user agreements.

 

Szpyrka later consolidated her action with three others.

 

According to court documents, the class members never indicated they were damaged by the breach in some way, only deceived by LinkedIn.

 

The company denies that it committed, threatened or attempted to commit any wrongdoing alleged in the action.

 

However, it agreed that further defense of the action would be “protracted, risky, burdensome and expensive.”

 

Those users who paid a fee to LinkedIn for a premium subscription from March 15, 2006 and June 7, 2012 are eligible to make a claim for payment. The deadline to make a claim is May 2.

 

Payments could range from $1 to $50 after the plaintiffs’ lawyers’ fees are paid and depending on the number of claims filed.

 

A final approval hearing is scheduled for June 18.

 

Kim Stone, president of the Civil Justice Association of California, which advocates for legal reforms to restrict tort recovery, said, generally speaking, the state’s class action laws are tilted in favor of the plaintiff.

 

“But we often see settlements where the lawyers get millions and the class members get pennies, or coupons -- or, in this case, a few dollars,” she said in an email.

 

According to a search of LinkedIn, only one of the attorneys listed as counsel for the plaintiff class, Ari Scharg of Edelson PC, had a public profile.


Meanwhile, three of LinkedIn’s attorneys, Michael Rhodes, Benjamin H. Kleine and Matthew D. Brown, all of Cooley LLP, could be found on the website.

 

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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