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Yahoo Investors Earn $14M in Attorney Fees in $80M Breach Deal

September 6, 2018 | Posted in : Contingency Fees / POF, Fee Award, Hourly Rates, Practice Area: Class Action / Mass Tort / MDL

A recent Law 360 story by John Petrick, “Yahoo Investors Get $14M Attys’ Fees in $80M Breach Deal, reports that a California federal judge approved $14.4 million to cover lead counsel attorneys' fees as part of an $80 million settlement finalized in a consolidated shareholder action accusing Yahoo of trading stock at artificially high prices while the company covered up large data hacks in 2014 and 2016.

Shareholders had argued for 18 percent to be set aside for attorneys' fees in the case over massive data breaches at Yahoo Inc., noting the settlement approved by U.S. District Judge Lucy H. Koh is significantly larger than a $35 million recovery in a similar suit brought by the U.S. Securities and Exchange Commission.  Shareholders also asserted that if not for the efforts of counsel during the case, the settlement could have been much lower.

Joshua L. Crowell of Glancy Prongay & Murray LLP, a lead counsel for the shareholders, all that’s left to do is go through the process of distributing the settlement.  “We still have to finish the claims administration," Crowell said. "Some will be rejected.  Then there will be a motion to send out the checks.  We think the settlement is a very excellent outcome, and we are very happy the court approved it so that we can start the process of distributing it to class members.” 

The judge denied a request for $235,200 be paid to plaintiff Ben Maher, $7,500 to plaintiff Sutton View Partners LP and $7,500 to lead plaintiff Nafiz Talukder to cover their expenses relating to their representation of the settlement class, finding that “the three named plaintiffs provide conclusory estimates of the hours spent on this case and their billing rates.  The three named plaintiffs have not substantiated their requested hours or billing rates with adequate documentation or evidence.”

The security breaches at Yahoo opened a floodgate of lawsuits and an administrative proceeding by the SEC that led to the $35 million fine levied against Yahoo in April.  In the consolidated shareholder action, which also named former Yahoo CEO Marissa Mayer, Judge Koh rejected Yahoo's motion to dismiss in November, and the parties filed the proposed settlement in March.  The judge gave preliminary approval to the settlement in May, certifying for settlement purposes a class of investors who purchased Yahoo shares between April 2013 and December 2016.

The case is In re Yahoo Inc. Securities Litigation, case number 5:17-cv-00373, in the U.S. District Court for the Northern District of California.