LinkedIn Settles Password Hacking Class Action Lawsuit for $1.25M

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According to court documents filed Friday in California federal court, LinkedIn Corp. has agreed to pay $1.25 million to settle a class action lawsuit filed over a 2012 data breach that resulted in millions of passwords being posted online.

Lead plaintiff Khalilah Gilmore-Wright alleged she purchased a LinkedIn premium account with the understanding the company implemented industry-standard security systems. However, the plaintiff claims that the massive career networking site had inadequate and outdated security programs that allowed hackers to breach the database and post 6.5 million LinkedIn users’ passwords on a website. According to the class action lawsuit, this data breach revealed that LinkedIn misrepresented the security of its website and made inaccurate public statements about its methods for safeguarding sensitive user data.

After news of the LinkedIn hack broke, several class action lawsuits were filed against the company, blaming the company for failing to encrypt its users’ personally identification information including email addresses, passwords and login credentials. The plaintiffs alleged they would not have paid for the premium service if they had known LinkedIn would fail to protect their information as promised in the company’s privacy policy. The LinkedIn class action lawsuits were subsequently consolidated into one action, named In re: LinkedIn User Privacy Litigation.

Under the terms of the proposed data breach class action settlement, Class Members include anyone who paid for a LinkedIn premium subscription between March 2006 and June 2012. If the LinkedIn class action settlement is approved, Class Members could be eligible to receive as much as $50. In addition, LinkedIn will implement industry-standard data security measures to protect users’ passwords. The class action settlement documents indicate that there are approximately 800,000 premium subscribers to LinkedIn.

“By providing significant direct cash to the Class and valuable prospective relief, the instant settlement exceeds the majority of privacy settlements that have won preliminary and/or final approval—even those where the Class was seeking significant statutory damages,” the motion supporting preliminary approval of the LinkedIn class action settlement says.

If any money remains in the LinkedIn data breach settlement fund after all valid claims are paid, the remaining funds will be divided among the following nonprofit organizations: the Center for Democracy & Technology, the World Privacy Forum, and the Carnegie Mellon CyLab Usable Privacy and Security Laboratory.

The plaintiffs are represented by Jay Edelson, Rafey S. Balabanian, Ari J. Scharg and Christopher L. Dore of Edelson PC; Laurence D. King and Linda M. Fong of Kaplan Fox & Kilsheimer LLP; Joseph J. Siprut of Siprut PC; David C. Parisi of Parisi & Havens LLP and Dan Marovitch of Marovitch Law Firm LLC.

The LinkedIn Password Hacking Class Action Lawsuit is In re: LinkedIn User Privacy Litigation, Case No. 5:12-cv-03088, in the U.S. District Court for the Northern District of California.

UPDATE: Instructions on how to file a claim for the LinkedIn user privacy class action settlement are now available! Click here or visit www.LinkedInClassActionSettlement.com for details.

UPDATE: A California federal judge gave final approval to the LinkedIn user privacy class action settlement on Sept. 15, 2015.