Trial lawyers have launched bids to gain control of about 40 class action lawsuits, worth potentially massive money, that have already been filed against genetic testing company 23andMe over a data breach affecting nearly 7 million people.
And one of the firms seeking control has asked the San Francisco judge handling the consolidated cases to consider a new strategy to decide which law firms get the lead spot, and likely the lion's share of any fee awards that may come down in a settlement or judgment to resolve the litigation.
On April 18, the firms of Edelson P.C., of Chicago and San Francisco, and Tycko & Zavareei LLP, of Oakland and Washington, D.C., each filed competing motions in San Francisco federal court, seeking to be appointed lead counsel for the 23andMe class actions.
Each of the law firms touted its depth of experience, and its leading role in moving forward data and privacy class action litigation using privacy and consumer protection laws in California and Illinois - laws which have drawn calls for reform from the nation's business and legal reform advocates, as they have been used to generate an avalanche of class action lawsuits and billions of dollars in fees for plaintiffs' lawyers through the years.
However, in their motion seeking the lead spot among all of the various firms that have piled into the court fight against 23andMe, Edelson sought to distinguish its bid by recommending the court take a new, more democratic approach to selecting lead class counsel, by considering surveying class members and allowing them to have a say in who sits across the table from 23andMe when a settlement is reached.
The lawsuits against 23andMe have piled into court since the fall of 2023, when news first broke that 23andMe's databases had been hacked, resulting in the loss of control over genetic information for more than 6.9 million people.
The lawsuits, filed in California, Illinois and elsewhere, centered on privacy laws and consumer protection laws, such as California's Unfair Competition Law and Illinois' Genetic Information Privacy Act. The GIPA claims, which would apply to alleged data breach victims from Illinois, could prove particularly costly, with plaintiffs able to claim damages of $2,500 to $15,000 per alleged violation, not just per person.
The Tycko firm was among the first to file, landing a case on behalf of named plaintiff Michelle Baucus, in state court in Chicago in November 2023. That complaint leveled accusations against 23andMe under the Illinois GIPA law.
The Edelson firm followed in January 2024 with a complaint filed in San Francisco federal court on behalf of named plaintiff David Melvin and a minor identified only as J.L. That lawsuit, as others, particularly noted that the lost genetic information was posted on the dark web and other sources, and offered for sale. Notably, according to the complaint, online genetic information dealers noted the information could potentially be used to locate people of Jewish and Chinese descent for potential action against them.
The Edelson complaint included a call for special "subclass" of plaintiffs under various state genetic privacy laws.
Because they all essentially level the same accusations against the same company and seek similar damages, a panel of federal judges ordered all of the cases consolidated into one proceeding in San Francisco federal court.
The plaintiffs have not yet publicly estimated how much they believe they may be able to extract from 23andMe to settle the cases.
However, in their motion for control, Edelson urged the court to avoid a so-called "race to the bottom," in which 23andMe and plaintiffs' lawyers reach a relatively quick settlement that generates potentially big fees for lawyers, but leaves money on the table for class members.
Edelson noted in the motion "that 23andMe has repeatedly reiterated that they’ve corralled all of the Plaintiffs’ firms into early settlement discussions and mediation with the sole exception of Edelson."
In their motion, Edelson likened a judge overseeing a sprawling consolidated class action proceeding, such as the one pending against 23andMe, to an in-house lawyer for an organization deciding which outside law firm would be best to represent them. In this case, Edelson likened the potentially millions of people suing 23andMe to being the judge's "clients," for whom the judge must pick the best possible attorney to press their claims and obtain the best possible result for the class in court.
The brief does not discuss how a judge could occupy that role, while also remaining impartial to the company being sued.
"How ... can a Court take an objective approach to deciding what’s in the best interests of its temporary, millions-strong client?" Edelson wrote. "A burgeoning area of scholarship suggests a surprising but commonsense solution: perhaps we should just ask them."
Edelson's motion points to research from two professors, Alissa del Riego and Joseph Avery of the University of Miami. The motion cites a paper the professors authored discussing "Class Member Preferences of Class Counsel."
According to its motion, Edelson said it asked the professors to conduct a survey of 400 potential members of the 23andMe class action lawsuits, asking them what factors they considered important in choosing lead counsel.
The factors identified by Edelson included: a litigation strategy centered on a "well-developed" complaint, not just being the quickest to file; experience in generating big dollar settlements and judgments in data privacy lawsuits; the long-term financial viability of plaintiffs' firms seeking control of the lawsuits; and a willingness to push for more money for class members, even if it means slightly less fees for the plaintiffs' lawyers.
Edelson claimed that its history and results match up best to the factors identified in the survey conducted by the professors, at Edelson's commissioning.
Edelson, for instance, noted it has consistently been among the leaders in crafting new and innovative strategies for suing companies using data privacy laws. To date, Edelson said it has secured judgments and settlements worth more than $5 billion.
Edelson also suggested courts, when weighing the financial strength and business acumen of law firms, take into account if those firms accepted Paycheck Protection Program loans through the federal government in response to economic and societal restrictions imposed by governors and others in 2020 amid the Covid-19 pandemic.
"While many plaintiffs’ firms (either properly or not) competed against their clients to take large Paycheck Protection Program loans, our firm did not," Edelson said. "We continued to grow and increased salaries and benefits for our employees."
And Edelson said they would offer to cap their fees at "20% of what is actually received by the class." They noted that if only 5% of potential class members file claims, they will accept fees of only 5%.
Edelson, however, noted their class actions generally result in class claims rates of more than 20%.
The 20% cap guarantee likely speaks to the size of the expected return. In most class actions, lawyers are awarded fees equal to a third or more of settlements. But in unusually large class action settlements, those fee awards can be significantly less.
In a famous settlement, the Edelson firm was among the lead counsel that secured $650 million from Facebook for allegedly violating Illinois' Biometric Information Privacy Act. Under that settlement, a San Francisco federal judge awarded Edelson and their associated lead counsel fees worth 15% of the settlement, or about $97.5 million.
Edelson noted their recommended approach to deciding lead class counsel in the 23andMe litigation is new and may prove unpopular among their peers. But they said they believe the time has come for new approach to strengthen privacy class actions, and prevent further settlements that Edelson described as "anemic ... that primarily benefit the lawyers."
The Edelson brief was authored by attorney Rafey S. Balabanian, of the firm's San Francisco office. Balabanian was joined by attorneys Jay Edelson, Ari Scharg, J. Eli Wade-Scott, Michael Ovca, Emily Penkowski Perez and Hannah P. Hilligoss, of the firm's Chicago office.