Facebook’s Beacon settlement may not have an easy glide through t...

Vaughn Walker in the San Francisco division rejected a settlement over a data breach at TD Ameritrade -- negotiated by the same class lawyers as in the Facebook case -- after having given it preliminary approval. Both settlements give the Kamber Edelson law firm a big payout -- $1.8 million in the TD Ameritrade case, $3.17 million in the Facebook case -- deny payments to affected customers, provide company money for future research, and give a broad release from claims. Walker said “the purported benefits to the class remain the problematic element of the settlement.” TD Ameritrade, whose account information was allegedly exposed to spammers, would provide a one-year free subscription or renewal to Internet security software to affected customers. The company would hire an independent expert to conduct penetration testing and have another company perform an analysis of whether the breach resulted in identity theft for any customers. Walker agreed with the Texas attorney general’s office, which objected to the terms, that “any reputable company” should have been taking those measures anyway. “It is not clear that such tests benefit the class,” he said: “Confidence” in TD Ameritrade’s information security “does not provide any real value to the class.” The free security software may be duplicative for some class members, and for those using e-mail services that automatically block spam, the new anti-spam software would be useless, Walker said. Kamber Edelson may also lose its exclusive right to represent the TD Ameritrade class. Walker agreed to consider a substitute class counsel, Gretchen Nelson of the Kreindler and Kreindler firm, who was recommended by one of the class members. Kamber Edelson lawyers, Nelson and TD Ameritrade will discuss the matter at a case management conference Dec. 10.