A recent Law 360 story by Katryna Perera, “Class Backs Atty Fee Bid In $68M Morgan Stanley Privacy Deal” reports that a class of Morgan Stanley customers asked a New York federal judge to grant final approval to a $68.2 million data breach settlement while also responding to a class member who objected to the requested $20 million in attorney fees, arguing the fee is reasonable, and her objections are misplaced and ignore the "settlement structure."

The class filed a memo Friday in support of their motion for final approval and a response to class member Robina Frank's objections.

A judge granted preliminary approval to the settlement with Morgan Stanley Smith Barney LLC in January. The deal will see the bank pay $68.2 million to provide 15 million class members with two years of fraud insurance and prevention services.

In their Friday memo, the class said the settlement brings "meaningful resolution and significant benefits to the settlement class without requiring further delay, risk, and expense." The memo also asked for class certification and noted the reaction to the settlement by class members has been "overwhelmingly positive," with only 43 objections and 300 exclusion requests out of more than 15 million class members.

The memo pushed back at the filed objections, calling them "either facially invalid or substantively without merit."

One hotly contested objection was filed by Robina Frank on July 12. She said the deal "gives credence to the worst stereotypes of class action abuse," and urged U.S. District Judge Paul A. Engelmayer to drastically reduce the fee award sought by attorneys at Morgan & Morgan and Nussbaum Law Group PC.

Frank argued that most class members have already received the fraud insurance and prevention services outlined in the settlement from other data breach class action settlements, and all of them have already received two years' worth of the same services from Morgan Stanley earlier on.

Frank, represented pro bono by frequent and well-known class action settlement objector Anna St. John of the Hamilton Lincoln Law Institute's Center for Class Action Fairness, said Judge Engelmayer should either reduce the fee award to 25% of the monetary value of fraud services to class members who actually bother to activate them — a number she contends would be exceedingly low — or cut the 33.76% award of the $68.2 million pot sought by attorneys down to 10% or 15%.

The Center for Class Action Fairness regularly objects to proposed class action settlements it says are unfair to class members. According to the response filed Friday, the organization's founder, Ted Frank, is Robina Frank's son.

Attorneys argued in the response that the objections are based on "misstatements of law and misunderstandings of the relevant facts" and that Frank "fails to appreciate that the settlement is cash."

"There is a $60 million non-reversionary cash fund in addition to defendant-borne costs of notice and administration of approximately $8.2 million … class counsel's request for $20 million represents 29.3% of the total value of the settlement or 33 1/3 % of the qualified settlement fund, not 33.76% as suggested by Ms. Frank," the response states.

The class argued that if the court accepted Frank's arguments, an "excellent and comprehensive recovery" would be delayed, and the class could again face the risk of no remedy at all.

"If the settlement is not approved and litigation resumes, a ruling on Morgan Stanley's motion to dismiss or a future ruling on a motion for class certification could leave most class members without a remedy," the attorneys said. "Data privacy litigation remains uncertain and underdeveloped, making it far riskier than other consumer class actions, particularly when, like here, there is no intervening hacker or criminal act that caused the compromise of data."

Morgan Stanley was hit with an array of lawsuits in the summer of 2020 after it began notifying customers and regulators about what it described as "potential data security incidents" stemming from its 2016 closure of two data centers and its 2019 replacement of computer equipment at one of its branches, eventually leading to the current settlement.

Additionally, the class says Frank's argument that the settlement is of no benefit to class members is incorrect.

Frank's claim that fraud and credit monitory services offered through the settlement are "not worth anything" is an unsupported opinion, the response states, and Frank is making "broad assumptions" that most class members don't need the services or are indifferent to them.

When Robina Frank filed her objection, Ted Frank attached a declaration rebutting "wildly false" attacks on Center for Class Action Fairness' motives, like accusations that he and the center make money off of the objections they file, or that the organization and its right-leaning attorneys are purely ideologically motivated.

The Morgan Stanley settlement at the heart of the current dispute was struck in December and requires Morgan Stanley to establish a $60 million settlement fund to provide the class members with two years of fraud insurance and prevention services from Aura Financial Shield.

Several class members who aren't represented by attorneys wrote in to object to the deal over the spring, arguing similarly to Robina Frank that it doesn't sufficiently help affected customers and gives attorneys too large a share of the pot.