Dozens of Lawyers Vie to Lead Data Breach Case Against Marriott

Judge Paul Grimm of the U.S. District Court for the District of Maryland in his chambers. November 3, 2016.

The fight over who will lead class actions brought over Marriott’s data breach began Friday, when dozens of lawyers submitted applications for leadership positions.

More than 80 lawsuits were filed over the breach, which Marriott International Inc. announced Nov. 30, compromised the personal data of 500 million guests of its Starwood Hotels and Resorts Worldwide properties (Marriott has since lowered that figure to fewer than 383 million).

All the cases were coordinated as multidistrict litigation before U.S. District Judge Paul Grimm, who is in Maryland, where Marriott is based. In an April 11 order, he set out specific guidelines for the leadership team, asking victims’ lawyers to provide a host of detailed information, including whether they anticipate "using third party litigation funding and from whom” and how they would keep billing costs down.

More than 30 applications poured in Friday, including four that submitted proposed slates of attorneys, many of whom have handled the nation's largest data breach cases. Most of the applications came from individual lawyers, several of whom were women.

“Diversity in multidistrict litigation leadership positions is crucial, as plaintiffs’ counsel must work collaboratively to obtain equitable and appropriate relief on behalf of a diverse class of consumers,” wrote Mila Bartos, a partner at Finkelstein Thompson in Washington, D.C., “However, women and minorities are to date still underrepresented in MDL leadership positions despite recent gains.”

Grimm has scheduled a hearing on the leadership applications for April 29.

In a Feb. 13 order, Grimm appointed three lawyers as interim co-lead counsel: Megan Jones, in San Francisco, and James Pizzirusso, in Washington, D.C., both partners at Hausfeld, and Andrew Friedman, a partner at Cohen Milstein Sellers & Toll in Washington, D.C.

On Friday, Friedman and Pizzirusso submitted a “right-sized, diverse slate” that would include the two of them, plus Amy Keller of Chicago’s DiCello Levitt, as co-lead counsel. Jones would be one of five members of a plaintiffs’ steering committee.

The slate, they wrote, “reflects the diversity of the bar and the plaintiff class—from the standpoint of age, race, gender, sexual orientation, experience and geographical location.”

Both Pizzirusso and Friedman were on the plaintiffs’ steering committee in the data breach cases against Equifax and Home Depot. Keller was co-lead counsel in Equifax, and Friedman was co-lead counsel in the Anthem data breach case that settled for $115 million.

Grimm, a 2012 appointee of President Barack Obama, has asked lawyers for an unusually large number of details about how they plan to finance their cases. He said lawyers should discuss billing rates, as well as the percentage of the settlement fund they anticipate requesting for their fees. He asked not only whether lawyers would use third party litigation funders but, if so, who they were and the amount of control they would have on “litigation strategy and settlement discussions.” He also asked applicants to disclose any agreements they had with other lawyers involving “funding, cost-sharing, or pooling clients for strategic reasons," and how they would monitor billing to keep costs down.

Grimm is not the only judge pushing for more scrutiny of billing and outside litigation financing in MDL cases. U.S. District Judge Lucy Koh, in the Northern District of California, has criticized plaintiffs attorneys for excessive billing costs in data breach cases against Anthem and Yahoo.

None of the applicants said they used third party litigation funders.

The largest proposed slate included seven lawyers, more than half of whom were women or minorities. Three would be co-lead counsel: Norman Siegel, Ariana Tadler and Hassan Murphy. There would be four members on a plaintiffs' steering committee, including John Yanchunis of Morgan & Morgan in Tampa, Florida. Siegel, of Stueve Siegel Hanson in Kansas City, Missouri, was co-lead counsel of Equifax, working with a plaintiffs' steering committee that included Yanchunis; Tadler, of New York’s Milberg Tadler Phillips Grossman; and Murphy, of Murphy Falcon & Murphy in Baltimore. Seigel and Yanchunis also were co-lead counsel in the Home Depot case, and Yanchunis was lead counsel of the data breach case against Yahoo that settled for $117.5 million.

Another proposed slate came from Jason Lichtman, a New York partner at Lieff Cabraser Heimann & Bernstein, and Eve-Lynn Rapp of Edelson in San Francisco. Their "small, focused team" involved three executive committee members and two plaintiffs liaison counsel, according to their application.

A “lean leadership slate” led by Daniel Robinson, of Robinson Calcagnie in Newport Beach, California, claimed in their application to represent more than 412 plaintiffs in 40 states. The group promised not to seek more than 28 percent of the settlement in attorney fees.

Stacey Slaughter, a partner at Robins Kaplan in Minneapolis, recommended a similar percentage in her application, filed Friday. Slaughter, who submitted an individual application but suggested that Grimm appoint 15 lawyers, also emphasized the importance of diversity in the leadership team.

Several other applicants, including Julie Palley, an associate at Philadelphia’s Barrack, Rodos & Bacine, also encouraged diversity.

“Respectfully, this court can also take into account the need within the profession to provide female attorneys like me, who have traditionally been relegated to supporting roles in the MDL litigation but who have the requisite experience working on them, with leadership opportunities,” she wrote in her application.

Plaintiffs lawyers appointed to lead multidistrict litigation have historically been men, though there are signs of change. Women secured a record number of lead counsel positions—about 35 percent—in 2018, according to Law.com research.

Some lawyers, such as Thiago Coelho and Justin Marquez of the Wilshire Law Firm in Los Angeles, cited their ethnic diversity in applying for leadership roles in the Marriott case.

One firm, New York’s Labaton Sucharow, applied to represent Marriott shareholders who lost money after the breach’s announcement.

Another uncontested slate of five attorneys submitted an application to represent the financial institutions affected by Marriott’s breach. In other data breach cases, judges have allowed financial institutions to pursue their claims on a separate track in the litigation from consumers.

That group, which represents the Bank of Louisiana in its suit against Marriott, suggested that lead counsel would be Steven Silverman, of Maryland’s Silverman Thompson Slutkin White, and Arthur Murray, of Murray Law Firm in New Orleans, who served in leadership positions in the cases against Equifax and Home Depot.

On the plaintiffs’ steering committee would be Brian Gudmundson, of Minneapolis-based Zimmerman Reed, who has served in leadership of “nearly every major data breach litigation on behalf of financial institutions,” they wrote, including Equifax and Home Depot. If appointed, Gudmundson would join Stuart Davidson, a partner in Boca Raton, Florida, at Robbins Geller Rudman & Dowd, who was on the executive committee in the Yahoo case, and Charles Van Horn of Berman Fink Van Horn in Atlanta, who held leadership roles in Equifax and Home Depot.

They said they would seek no more than 27.5 percent of any settlement.