Strong v. LifeStance Health Group Incorporated

District Court, D. Arizona·Decided October 6, 2025·No. 2:23-cv-00682·Unknown

Opinion

1 WO 2 3 4 5

9 Montana Strong, et al., No. CV-23-00682-PHX-KML

10 Plaintiffs, ORDER

11 v.

12 LifeStance Health Group Incorporated,

13 Defendant. 14 15 Plaintiffs Montana Strong and Debra Yick filed this suit against LifeStance Health 16 Group, Inc. (“LifeStance”) alleging federal and state claims based on tracking technology 17 LifeStance allegedly used on its website. Jointly with LifeStance, plaintiffs now seek 18 preliminary approval of a proposed class action settlement. (Doc. 79.) Because the 19 proposed settlement contains concerning attorneys’ fees provisions, the present record does 20 not allow for preliminary approval and the motion is denied without prejudice to renewal. 21 I. Factual Background 22 Defendant LifeStance is a mental healthcare company that offers “outpatient care 23 services via in-person locations and telemedicine.” (Doc. 32 at 5.) LifeStance has 600 24 locations and “employs more than 5,200 psychiatrists, advance practice nurses, 25 psychologists and therapists.” (Doc. 32 at 5.) Those professionals provide treatment for 26 conditions including depression, PTSD, and bipolar disorder. (Doc. 32 at 23.) LifeStance 27 markets and provides its services through a website, www.LifeStance.com. (Doc. 32 at 5.) 28 Opting “to put its profits over the privacy of its Users, . . . LifeStance installed certain 1 tracking technologies on its website in order to intercept and to send personally identifiable 2 information (‘PII’) and protected health information (‘PHI’[)] . . . to third parties such as 3 Meta Platforms, Inc. d/b/a Facebook . . . without the informed consent of its users.” (Doc. 4 32 at 6.) The tracking technology central to this case is known as the “Meta Pixel,” or 5 simply “the Pixel.” 6 II. Proposed Settlement Agreement 7 Following this court’s January 2025 order denying in part LifeStance’s motion to 8 dismiss, the parties discussed settlement and agreed to mediation after an exchange of 9 informal discovery. (Doc. 79 at 12.) In April, the parties participated in a private, full-day 10 mediation before the Hon. Suzanne H. Segal of Signature Resolution and subsequent 11 remote sessions. (Doc. 79 at 12.) The parties ultimately agreed plaintiffs will resolve all 12 claims related to the Pixel in exchange for LifeStance providing prospective class members 13 a common fund and additional benefits described below. (Doc. 79 at 13.) 14 Under the resulting proposed settlement agreement, the parties seek to certify for 15 settlement purposes a class comprised of three subclasses:

16 1. Settlement Subclass 1: All members of LifeStance’s total patient 17 population who booked at least one session through LifeStance’s online booking tool, accessed through LifeStance’s 18 public website lifestance.com, between March 1, 2020 and April 19 30, 2023. 2. Settlement Subclass 2: All other members of LifeStance’s total 20 patient population between March 1, 2020 and April 30, 2023, 21 not including those in Settlement Subclass 1. 3. Settlement Subclass 3: All persons who visited the LifeStance 22 website between March 1, 2020 and April 30, 2023 but did not 23 book appointments online or otherwise become patients.

24 (Doc. 79 at 13.) The parties have identified 171,915 members of Subclass 1 and 907,737 25 members of Subclass 2. (Doc. 79 at 15.) Members of Subclass 1 will, upon timely submittal 26 of a claim form, receive a pro rata cash payment from a LifeStance-funded non- 27 reversionary fund of $1,203,405.00, less any amount the court awards for attorneys’ fees 28 and costs. (Doc. 79 at 14.) Any unclaimed money will be sent to two data privacy 1 organizations as cy pres recipients. (Doc. 79 at 25.) Members of Subclasses 1 and 2 will 2 receive offers to enroll for free in a twelve-month subscription to a privacy monitoring 3 service, which the parties value at approximately $265 per redemption. (Doc. 79 at 14.) 4 Finally, all subclass members will receive injunctive relief: LifeStance will agree to 5 “disable and forego use of all third-party tracking pixels, to the extent any remain, other 6 than tracking pixels compliant with HIPAA, for a period of five (5) years from the Effective 7 Date of this Settlement Agreement.” (Doc. 79 at 14). 8 LifeStance maintains email address information for most members of Subclasses 1 9 and 2 and the parties have agreed to send notices via email (or postcards where emails 10 bounce back). (Doc. 79 at 16, 27-28.) Because LifeStance does not maintain contact 11 information for each person who accessed its website, the parties agreed to fund a media 12 campaign directing members of Subclass 3 (and, necessarily, all class members) to the 13 settlement website. (Doc. 79 at 28.) To cover these administrative costs, LifeStance agreed 14 to separately create a $300,000 fund which will go to settlement administrator Angeion’s 15 work delivering notice, maintaining the settlement website and toll-free hotline, evaluating 16 claim forms, etc. (Doc. 79 at 15.) 17 Finally, attorneys’ fees will be funded by two mechanisms. (Doc. 79 at 18.) The 18 parties have agreed class attorneys will seek 25% or 33%1 plus litigation costs from the 19 $1.2 million fund for attorneys’ fees attributable to plaintiffs’ counsel’s work securing the 20 settlement for Subclass 1. (Doc. 79 at 18.) Separately, LifeStance will create a $750,000 21 fund for attorneys’ fees “attributable to the work done to secure the settlement benefits for 22 Settlement Subclass 2 and Settlement Subclass 3.” (Doc. 79 at 15, 17-18.) LifeStance will 23 not contest plaintiffs’ counsel requesting the $750,000 and any money from this fund which 24 goes unawarded will revert to LifeStance. (Doc. 80-1 at 19.) 25 In summary, the class settlement would provide the following. The 171,915 26 members of Subclass 1 would split approximately $800,000-$900,000 (i.e., $1,203,405.00

27 1 The parties’ motion states class counsel will request 25% of the fund plus costs and 28 expenses (Doc. 79 at 19) but the draft notice to the class states class counsel will request “up to one-third” of the fund plus costs and expenses (Doc. 80-1 at 64). 1 minus either 33% or 25% for fees and costs, depending on which represents the accurate 2 settlement term). If every subclass member then makes a claim, each Subclass 1 member 3 would receive between $4.69 and $5.25. The 171,915 Subclass 1 members and 907,737 4 Subclass 2 members are eligible to claim an offer for a free privacy monitoring service. 5 And the members of Subclass 3 receive injunctive relief in the form of LifeStance being 6 prohibited from, according to plaintiffs, engaging in illegal conduct. 7 III. Analysis 8 “[V]oluntary conciliation and settlement are the preferred means of dispute 9 resolution. This is especially true in complex class action litigation.” Officers for Just. v. 10 Civ. Serv. Comm’n of City & Cnty. of San Francisco, 688 F.2d 615, 625 (9th Cir. 1982). 11 Nonetheless, courts must find each settlement agreement to be fair, adequate, and 12 reasonable. Fed. R. Civ. P. 23(e)(2). Courts tasked with preliminary approval of settlements 13 made before class certification “must peruse the proposed compromise to ratify both the 14 propriety of the certification and the fairness of the settlement.” Staton v. Boeing Co., 327 15 F.3d 938, 952 (9th Cir. 2003). 16 A. Conditional Class Certification 17 a. Legal Standard 18 Class certifications proposed for the purposes of settlement “demand undiluted, 19 even heightened, attention” to Rule 23’s class certification requirements because, unlike 20 during litigation, the court won’t be able to adjust class definitions as proceedings progress. 21 Amchem Prods., Inc. v.

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Strong v. LifeStance Health Group Incorporated, (D. Ariz. 2025).

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