John Does 1-5, et al. v. Kaiser Foundation Health Plan, Inc., et al.

Summary

The United States District Court for the Northern District of California considers Plaintiffs’ motion for preliminary approval of a proposed class action settlement concerning alleged interception of Kaiser members’ online health-related information by third-party technologies. The court finds the settlement within the range of reasonableness but requires modifications to the settlement class definition and individualized opt-out procedures. The court continues the preliminary approval hearing and directs the parties and objectors to meet and confer and file supplemental papers.

Holdings

1. The proposed settlement fell within the range of reasonableness under Rule 23(e), but the court did not grant preliminary approval immediately because approval was conditioned on modifications to the settlement-class definition and opt-out procedures.
2. The settlement-class definition should exclude individuals who demanded or initiated arbitration and remained on the arbitration track, but it should not require payment of the arbitration filing fee as a condition of exclusion.
3. Individuals who had demanded arbitration but subsequently abandoned arbitration and joined state-court litigation should not be categorically excluded from the settlement class on the basis of their prior arbitration activity.
4. The court rejected mass opt-outs and required individualized opt-out decisions, while permitting the parties and objectors to develop a reasonable process under which counsel could collect and transmit individualized opt-outs.

Questions Presented

1. Whether the proposed class action settlement fell within the range of reasonableness under Federal Rule of Civil Procedure 23(e) such that preliminary approval and class notice were appropriate.
2. Whether the settlement-class definition should exclude only individuals who had demanded or initiated arbitration and remained on the arbitration track, rather than requiring payment of an arbitration filing fee.
3. Whether individuals who had previously demanded arbitration but subsequently joined state-court litigation should be included in the settlement class.
4. Whether class members should be permitted to opt out through mass or attorney-submitted opt-outs rather than individualized opt-out requests.
5. Whether California plan members should receive a different allocation because of allegedly stronger claims.

Disposition

remanded