Sony has agreed to pay $15 million to settle a proposed class action that followed a PlayStation security breach in 2011 that exposed the personal information of an estimated 30 million users.
But even adding in $2.75 million in plaintiffs’ attorneys fees and costs, $1.25 million for claims administration and multimillion-dollar legal expenses as a defendant in a bare-knuckles, three-year court battle, the financial toll for Sony Computer Entertainment America LLC likely will amount to less than the $171 million the company estimated in 2011 than it would cost to clean up the mess.
And whatever the final bill, it is certain to amount to a micro-fraction of the $20 billion some industry analysts estimated when the breach came to light.
That is largely because the proposed settlement, filed June 13 in U.S. District Court for the Southern District of California, comes in a case that was condensed and largely dismantled. In August 2011, the 61 proposed class actions became the single multidistrict action that is set to settle—in Re: Sony Gaming Networks and Customer Data Security Breach Litigation.
In January, U.S. District Judge Anthony Battaglia hacked away 43 of the 51 claims plaintiffs brought under the laws of nine states, including negligence, negligent misrepresentation, breach of contract and unjust enrichment. Kept were charges of misrepresentation and security omissions by Sony in violation of California, Florida, Michigan and New Hampshire consumer-protection laws. Sony denies any wrongdoing or liability.
The “hacktivist” group Anonymous claimed responsibility for some of the breach. LulzSec, an Anonymous offshoot, allegedly broke into Sony, as well. Exposed in the break-in were users’ log-in credentials, names, addresses, phone numbers, email addresses and credit and debit card information, according to the consolidated complaint. Shortly after the breach was announced, Sony offered identity-theft protection to some of the users.
The proposed settlement offers a complex ladder of awards for plaintiffs, depending on what they had subscribed to or agreed to in the past, according to the court documents. The bulk of the awards will take the form of online currency, games and three-month subscriptions to the PlayStation Plus service. Sony also agreed to provide up to $2,500 each to those with documented and unreimbursed costs from being an identity theft victim, up to a total of $1 million.
A motion hearing for preliminary approval of the settlement is scheduled for July 10 in Battaglia’s court.
Plaintiffs’ attorneys are Ben Barnow of Barnow and Associates; Paul Geller of Robbins Geller Rudman & Dowd; David McKay of the Law Offices of David A. McKay; Adam Levitt of Grant & Eisenhofer; Brian Strange of Strange & Carpenter; Timothy Blood of Blood Hurst & O’Reardon; and Gayle Blatt of Casey Gerry Schenk Franca Villa Blatt & Penfield.
Sony’s attorneys are Harvey Wolkoff and Mark Szpak of Ropes & Gray LLP and William Boggs and Amanda Fitzsimmons of DLA Piper.
Lisa Hoffman is a contributor to law.com.