Yahoo to Pay Up to $4M to Settle E-Mail Scanning Suit

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By Jimmy H. Koo

Jan. 8 — Yahoo! Inc. agreed Jan. 7 to change how it handles e-mail traffic to settle class allegations, filed in the U.S. District Court for the Northern District of California, that it mined e-mails to target advertising (In re Yahoo Mail Litig., N.D. Cal., No. 5:13-cv-04980, motion for preliminary settlement approval filed, 1/7/16).

Under the terms of the settlement agreement, Yahoo agreed to pay up to $4 million in attorneys' fees and costs, as well as a $5,000 service award for each class representative.

The initial October 2013 class complaint alleged that the company intercepted e-mails without proper consent in order to profit from targeted advertising, profiling and data collection unrelated to Yahoo Mail (194 PRA, 10/7/13). Other complaints followed (227 PRA, 11/25/13), and the court consolidated the putative class actions in January 2014.

In August 2014, the court granted Yahoo's bid to throw out federal wiretap claims under the Electronic Communications Privacy Act as well as invasion of privacy claims under the California Constitution, but allowed a California Invasion of Privacy Act (CIPA) claim to go forward (157 PRA, 8/14/14).

Under the terms of the settlement, Yahoo agreed to adopt practices and make technical changes that comply with the CIPA. It also agreed to make changes to its website to contain explanations of its information collection and use practices.

Hearing for preliminary approval is scheduled for Feb. 4.

Girard Gibbs LLP and Kaplan Fox & Kilsheimer LLP represent the plaintiffs. Morrison & Foerster LLP and ZwillGen PLLC represent Yahoo.

On Jan. 4, Yahoo learned in a separate case that it will have to face class allegations that its automated “Welcome” text messages triggered by lawful user-initiated messages to non-Yahoo users violated the Telephone Consumer Protection Act (3 PRA, 1/6/16).

To contact the reporter on this story: Jimmy H. Koo in Washington at

To contact the editor responsible for this story: Donald G. Aplin at

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