Plaintiffs recently agreed to a $7.1 million settlement in their data breach class action lawsuit against Drizly, North America's largest online alcohol marketplace.
The suit, Barr v. Drizly, LLC, Case No. 1:20-cv-11492 (D. Mass.), contained allegations that a data breach exposed customers' email addresses, dates of birth, hashed passwords, delivery addresses, phone numbers, and IP addresses to third parties on the dark web.
The targeted attack occurred around Feb. 2020. However, Drizly did not discover it until July 2020, according to the suit.
The plaintiffs accused Drizly of negligence, negligence per se, breach of implied contract, unjust enrichment, and violating consumer protection laws in Massachusetts, New York, Arizona, and California. The plaintiffs sought to certify a punitive class.
Drizly moved to compel arbitration after the plaintiffs amended the complaint in Oct. 2020. Drizly argued that the lawsuit was precluded based on the Federal Arbitration Act because all users agreed to terms stating that they would resolve any disputes via individual arbitration.
However, the parties reached a preliminary settlement before the court ruled on the motion.
The settlement provides a cash payment of around $14 to each class member that files a timely and valid claim form. In addition, plaintiffs will receive a portion of up to $447,750 in the form of a credit toward future orders from Drizly.
In asking the court to approve the settlement, the plaintiffs stated that although they "believe they would have prevailed, there are risks involved in data breach litigation - a relatively new area of law - including proving standing and causation." They also noted that there was a "greater risk of non-recovery" because of the "still-developing law."
In addition, the plaintiffs stated that they "likely would have incurred significant costs to prove their case through fact and expert discovery."
The court has granted preliminary approval of the settlement with a final approval hearing scheduled later in 2021. Kristin L. Bryan "No Happy Hour Here: $7.1 Million Settlement Reached in Alcohol Delivery Data Breach Class Action Litigation, Class Members Anticipated to Get $14 Cash Payout" natlawreview.com (2021).