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Kalispell mayor, former mayor object to settlement in Logan Health data breach – Daily Montanan [1]

['Darrell Ehrlick', 'More From Author', '- February']

Date: 2023-02-18  

The current mayor and former mayor of Kalispell have filed a motion in Cascade County District Court that objects to a class-action settlement proposed by attorneys representing more than 200,000 people, mostly Montana residents, whose personal information was compromised when Logan Health had a data breach in 2020.

Attorneys in the case have proposed a settlement for $4.3 million, and the various law firms have set one-third of that to pay attorneys’ fees, or roughly $1.43 million.

However, former mayor Tammi Fisher and current Kalispell Mayor Mark Johnson have filed a suit that alleges the attorneys’ fees for the case, which settled in a matter of several weeks, are exorbitant and give money to lawyers instead of helping people hurt by the data breach.

“Assuming a very generous estimate of 300 hours of billable work by class counsel, their billing rate for this case would be nearly $5,000 per hour. And they would be paid first – thousands of class members, on the other hand, might not receive any money,”said the court briefing, written by attorney Matthew Monforton.

Monforton pointed out that one of the attorneys leading the charge, John Yanchunis, has been criticized by other courts for unreasonable fees.

However, in a court filing responding to the two former mayors, attorneys in the class-action suit said they’ve invested nearly countless hours contacting members of the class, which numbers more than 200,000, and called the attempt to lower the fees as a “meritless fishing expedition the court should decline.”

The class-action suit began after Logan Health, which is headquartered in Kalispell, discovered a data breach in November 2021 that affected 213,000 patients, 175,000 of whom were Montanan. That is after two other data breaches occurred in October 2019 and January 2021, respectively.

Judges in deciding class-action lawsuits, even ones that settle before trial, can review attorneys’ fees to make sure they’re not unreasonable, especially because many cases settle without the court’s intervention. Two methods are often used. The first is called a “lodestar” method which takes an estimate of hours spent on the case and multiplies them by an average hourly rate. Another method takes a flat percentage of whatever the total settlement works out to be, leaving class members to divide the rest.

“Class counsel is requesting a fee award nearly 16 times as high as the fee normally paid for work in Great Falls,” the complaint said. “The proposed settlement is not a phenomenal result for the class members. Many of them might not receive a dime.”

The agreement stipulates that those who were directly harmed by the data breach will be paid first, and others will get what’s left after those settlements are compete. That leaves all other class action litigants with the remaining money, if any.

“The only people who will benefit phenomenally under the proposed settlement agreement are class counsel — $1.43 million for a few weeks’ of work,” the suit said.

The group of attorneys for those hurt by the data breach said that cash is available for out-of-pocket losses up to $25,000 per individual, as well as $125 for a time reimbursement. Attorney John Heenan, one of the lawyers who drafted the opposition to Monforton, said that class-action members will be provided with either three years of credit monitoring or an alternative cash payment.

“Class counsel dedicated significant time towards investigating the circumstances of the data breach, developing the relevant facts into a detailed complaint, fielding calls from potential class members, interviewing and assessing the adequacy of the named plaintiffs, and communicating internally to determine the most efficient manner of organizing the litigation,” the response said.

They also pointed to other Montana class-action cases where attorneys’ fees were roughly the same percentage for even higher award settlements.

“(Fisher and Johnson) are not entitled to unfettered access to the books and records of counsel to satisfy their own curiosity or attempt to second-guess the litigation efforts of counsel,” the reply said.

But Monforton also told the court that the case was “a virtual slam” dunk because of the two data breaches that happened not too long before the third one.

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