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Sony agrees to $15M settlement in data breach class action; $2.75M for attorneys

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Law,Technology,Legal Newsline

SAN DIEGO (Legal Newsline) – Sony has agreed to a $15 million preliminary settlement in a class action lawsuit regarding its 2011 data breach.

PlayStation Network claimants who did not participate in the “Welcome Back” package offered to PSN accountholders are eligible to receive two of the following PSN benefit options: One PlayStation 3 or PlayStation Portable game selected from a list of 14 games; three PlayStation 3 themes selected from a list of six themes; or a three-month subscription to PlayStation Plus free of charge.

Edward J. Schwartz U.S. Courthouse in San Diego

Edward J. Schwartz U.S. Courthouse in San Diego

Claims by PSN “Welcome Back” non-participants will be honored on a first-come, first-serve basis subject to an aggregate cap of $6 million, according to the June 13 settlement document.

PSN claimants who participated in the “Welcome Back” package offered to PSN accountholders are eligible to receive on game benefit, theme benefit or PlayStation Plus new subscription benefit.

Claims by PSN “Welcome Back” participants will be honored on a first-come, first-serve basis subject to an aggregate cap of $4 million, according to the settlement document.

Qriocity accountholders who did not have a PSN account at the time of the intrusions are eligible to receive one free month of Music Unlimited service, which currently costs $4.99 per month.

SOE claimants are eligible to receive $4.50 worth of “station cash” to be credited to be SOE claimant’s account.

The Sony entities will reimburse settlement class members for claimed, documented and unreimbursed identity theft-related charges not to exceed $2,500 per claim. Valid claims under this provision are subject to an aggregate of $1 million.

The Sony entities will pay all costs of providing notice of the settlement to the settlement class and the costs of claims administration, not to exceed $1.25 million.

To Sony entities have agreed to pay co-lead settlement class counsel, subject to court approval, up to the amount of $2.75 million for attorneys’ fees, costs and expenses, according to the settlement document.

On April 26, 2011, Sony Network Entertainment International LLC and Sony Computer Entertainment America LLC announced that an unauthorized person or persons had perpetrated an illegal and unauthorized attack on the computer network systems used to provide PSN services, and that certain PSN and Qriocity accountholder information appeared to have been accessed as a result of the unauthorized intrusion.

On May 2, 2011, Sony Online Entertainment LLC announced that an unauthorized person or persons had perpetrated an illegal and unauthorized attack on the SOE network, and that certain SOE accountholder information appeared to have been accessed as a result of the unauthorized intrusion.

Services on both the PSN and the SOE networks were suspended and unavailable to accountholders for a period of approximately two to three weeks until operations were restored on the networks by on or about May 15, 2011.

A “Welcome Back” package of various benefits (including the opportunity to obtain identity theft insurance) thereafter was made available to accountholders of both networks.

Following announcement of the intrusions, 65 class action complaints were filed, asserting claims against various of the Sony entities in federal courts throughout the country.

On Aug. 8, 2011, the Judicial Panel on Multidistrict Litigation transferred all related actions to the court for coordinated or consolidated pretrial proceedings.

“The settling parties have engaged in several rounds of settlement discussions since the inception of this MDL litigation,” the settlement documents state. “These discussions began over two years ago and have included a number of face-to-face meetings and telephone conference calls.”

During the fall of 2012, the settling parties engaged in a mediation and subsequently continued settlement negotiations.

“After the court’s ruling on the Sony entities’ motion to dismiss the FAC, the settling parties engaged in renewed settlement discussions,” the document states. “The settlement was reached as a result of such discussions.”

A final fairness hearing will be held May 1, 2015.

The case was assigned to District Judge Anthony J. Battaglia.

U.S. District Court for the Southern District of California: 3:11-md-02258

From Legal Newsline: Kyla Asbury can be reached at classactions@legalnewsline.com.

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