Motion for Preliminary Approval of Class Action
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If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order.
Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.
Re: SINITSA, STAN vs. CUSO FINANCIAL SERVICES, LP Case No.: VCU326251 Date: May 28, 2026 Time: 8:30 A.M. Dept. 1-The Honorable David C. Mathias Motion: Motion for Preliminary Approval of Class Action Tentative Ruling: To continue this motion to June 25, 2026; 8:30 am; D1 and orders a supplemental declaration as to the lodestar, the presently incurred costs of counsel, the administrative costs and the notice period filed no later than five (5) court days prior to the hearing.
1. Sufficiency of Amount of Settlement (Net Estimated: $1,141,666.67 less administrator costs) This matter arises out of an alleged Data Security Incident suffered by Defendant CUSO Financial Services, LP between December 19, 2023 and January 19, 2024 (the "Data Incident") which potentially compromised the personally identifiable information ("PII" or "Private Information").
On about October 28, 2024, Defendant began sending a Notice of Security Incident acknowledging the Data Incident. Defendant notes that, on January 19, 2024, it learned of suspicious activity involving a third-party service provider that CUSO uses for archiving communications and involved data belonging to 76,251 current or former CUSO customers and/or employees.
The nationwide class is defined as "All persons whose personal identification information and data was stored in CUSO's systems at the time of the cybersecurity incident that occurred between December 19, 2023, and January 19, 2024, and who were impacted by the cybersecurity incident." The California subclass is defined as "Members of the Nationwide Class who are also California residents at the time of the cybersecurity incident that occurred between December 19, 2023, and January 19, 2024." (collectively "Settlement Class Members").
Excluded from the Settlement Class are CUSO's officers, directors, and employees; any entity in which CUSO has a controlling interest; and the affiliates, legal representatives, attorneys, successors, heirs, and assigns of CUSO. Excluded also from the Settlement Class are the Judge presiding over this action, the Judge's immediate family, and the Court staff, non-natural persons, as well as those members of the Class who opt-out from the settlement pursuant to the procedures set forth in the Agreement and this Preliminary Approval Order.
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Plaintiff alleges that the Data Incident was the result of CUSO's inadequate data security protocols. The gross settlement amount is $1,750,000 and consists of a non-reversionary common fund from which the following will be paid: (1) Compensation for Economic Losses including up to $5,000.00 per individual for documented out-of-pocket expenses; (2) Settlement Class Members who were also California residents at the time of the Data Incident may elect to receive a statutory cash payment of up to $100; (3) Two years of additional Credit Monitoring and CyberScan Dark Web Monitoring; (4) Costs of Claims Administration; (5) Service Awards; and (6) Attorneys' Fees and Litigation Expenses. Any residual funds after the above distributions will be subject to a Residual Cash Payment to be divided equitably among Settlement Class Members with an approved claim.
Counsel indicates the relief obtained for Settlement Class Members is well within the range of approval, as the California Consumer Privacy Act provides statutory damages that range from $100 to $750 per individual. (Cal. Civ. Code Sec. 1798.150(a)(1)(A)) or individual out of pocket losses, whichever is greater.
After agreeing to participate in mediation, Defendants informally records related to the breach as to the Settlement Class members, key class data points, and other documents and information relevant to the claims alleged in advance of mediation. The parties reached the settlement four separate mediation sessions. The Court finds the information provided in support of the gross settlement amount sufficient for the Court to preliminarily approve the gross settlement amount, as the settlement amount appears to be within the recognized range of reasonableness given the claims and defenses asserted in this case.
Plaintiff's deductions from the gross settlement of $1,750,000 are proposed as follows: Proposed Court Approved Attorney Fees (33.3%): | $583,333.33 | Proposed Costs (up to): | $20,000 | Proposed Enhancement Payment to Plaintiff: | $5,000.00 | Proposed Settlement Administrator Costs | $ Unknown | Proposed Net Settlement Amount | $1,141,666.67 (less administrator costs) |
2. Class Notice The settlement agreement provides no claim form will be required of class members to participate in distributions. Only those wishing to object or opt out must file notice with the settlement administrator. Objections or opt out notices are to be made within 45 days. The Court regularly approves notice periods of 60 days or longer. The class notice period is therefore not approved.
With respect to the content of the Notice, the Court finds the Class Notice to be reasonable. It clearly provides to the class member an estimate of the settlement share the member is to receive and provides adequate instructions for any class member to opt out of the settlement or to submit an objection, or to make a claim for actual damages.
3. Enhancement Award to Class Representative The court preliminarily approves Plaintiff as class representative for settlement purposes. The proposed enhancement award to Plaintiff is $5,000. The Court has, in past cases, approved enhancement awards of up to $5,000 routinely and approves the award as requested in the same amount.
4. Attorneys' Fees and Costs Attorneys' fees no greater than of 33.3% of the gross settlement fund of $1,750,000 or $583,333.33 are sought in this matter. Although the Court recognizes the utilization of the percentage of the common fund methodology to award attorneys' fees, the Court requires a declaration from counsel that provides an estimate as to what the lodestar would be in this case.
The ultimate goal of the Court is to award reasonable attorneys' fees irrespective of the method of calculation. As such, the court needs to know the estimate of the approximate lodestar supported by declarations for preliminary approval. Counsel should submit information as to the time spent on this action and the hourly rates of all counsel working on the case. Without such information, the Court declines to preliminarily approve the fees.
The Court further finds that Plaintiff's counsel is an experienced class action attorney through the declaration of counsel. As to the costs, the Court cannot approve costs not to exceed $20,000 without knowing the presently incurred costs.
5. Claims Administrator The Court preliminary approves Analytics LLC as the claims administrator for this class action. However, no estimated cost as to the administration of this lawsuit has been provided. The Court will require such information prior to preliminary approval.
6. Unclaimed Settlement Proceeds The Court notes any residue is to be distributed equitably among Settlement Class Members with an approved claim.
7. Release The Court finds the proposed release of claims reasonable under the circumstances.
8. Class Certification for Settlement Purposes Code of Civil Procedure section 382 permits certification "when the question is of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court." (Code Civ. Proc. Sec. 382.) The plaintiff bears the burden of demonstrating that class certification under section 382 is proper. (See City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 460.)
To do so, "[t]he party advocating class treatment must demonstrate the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives." (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004, 1021.)
Here, the Motion and accompanying declaration of counsel sufficiently sets forth the basis for finding the class is numerous and ascertainable as 76,251 individuals subject to the breach. Additionally, common questions of law and fact predominate the action. The Court finds a sufficient basis to conditionally certify the class for the purposes of settlement.
Therefore, the Court continues this motion for preliminary approval to June 25, 2026; 8:30 am; D1 and orders a supplemental declaration as to the lodestar, the presently incurred costs of counsel, the administrative costs and the notice period.
If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order.
Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.