Data breach class actions are a racket. California is the epicenter of this plaintiff's legal fee bonanza. The passage and subsequent amendment to the CCPA fueled this legal juggernaut. While the CCPA does provide greater protection for victims of data breaches, in reality it means consumer victims of data breaches really only get at most $750 while the lawyers make hundreds of thousands if not millions in fees.
The way it works is enterprising plaintiffs' lawyers scour the internet daily searching for data breaches where consumer personally identifiable information (PII) is compromised. In the health care context, it is know as protected health information (PHI) Note: a favorite website of lawyers is the U.S. Department of Health and Human Services (HHS) where massive health care breaches are announced as required by law, often months after they occur giving the victims little chance to mitigate their damages.
If the breach is big enough and affects a California consumer, then the law firm drafts a blog post to their website and purchases advertising. They try and reel in a plaintiff. Once they have one they information is plugged into a canned complaint, and they file the lawsuit in federal court--hoping to be the first firm to file. Almost all of these firms are in California, which is a litigation paradise for this legal cottage industry.
If you are the first law firm to file, then you get to be lead counsel, which means--if the case isn't dismissed--you will make more in fees than the other circling shark lawyers. Many of these settlements are in the millions, and law firms take between 33% and 40%. Or the case is up to those percentages, but the billable time for several hundred hours is billed out between $700 to $1000 per hour. When I handled these cases, my time was around $700 per hour.
On one case I billed 76 hours. $53,200 in fees. You can see how lucrative it can get just on billables. If it is based on percentages, then it came be in the millions. And most of the time you don't even need to take depositions or barely even conduct depositions. It is largely complaint (the lawsuit) and brief driven. If you make it past a low level motion to dismiss, then the case will almost certainly settle for a ton of money.
God forbid these lawyers ever had to go to trial. They wouldn't know what the hell to do.
Oh...and there are mediations that take place where the pie is carved up. And the mediator (there aren't many who do it) charges between $11,000 and $15,000 for a one-day mediation. I shit you not. This is all while the defense lawyers, who have billed as many hours if not more than the plaintiff's attorneys, are billed out at $800 or $1000 per hour.
But, hey, the class members get maybe $750? Does this sound like justice to you? Don't tell the plaintiffs' lawyers that because they all talk about "justice," which is a total crock of shit.
In my opinion, many of the plaintiffs' lawyers who do these cases are no better than ambulance chasers and so-called Walmart lawyers. I don't do these cases anymore, and I've had time to think about it. I regret ever doing them, quite frankly. Perhaps in time I will wash the slime off of my body from this sleazy nature of these cases. But it will take a while.
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