(Reuters) - Motel 6 will pay up to $7.6 million to Hispanic guests to settle a proposed class-action lawsuit claiming that it violated their privacy by regularly providing guest lists to U.S. Immigration and Customs Enforcement (ICE) agents.
Terms of the preliminary settlement with eight Hispanic plaintiffs - seven from Arizona and one from Washington state - were disclosed in a Nov. 2 filing with the federal court in Phoenix.
Motel 6 also agreed to a two-year consent decree barring it from sharing guest data with immigration authorities absent warrants, subpoenas, or threats of serious crime or harm.
Court approval is required. Motel 6 did not admit liability, and denied engaging in unlawful conduct.
The Mexican American Legal Defense and Educational Fund (MALDEF) filed the lawsuit after the Phoenix New Times said ICE agents had arrested 20 people over six months at Motel 6s in Arizona, using guest lists to target people by national origin.
"Motel 6 fully recognizes the seriousness of the situation and accepts full responsibility for both compensating those who were harmed and taking the necessary steps to ensure that we protect the privacy of our guests," Motel 6 and MALDEF said in a joint statement.
A settlement had been reached in July, but no terms were disclosed at the time.
The terms were announced shortly before the U.S. midterm elections, in which President Donald Trump has made immigration a central issue.
Up to $5.6 million will go to Motel 6 guests who faced immigration removal proceedings after their personal information was shared. They are eligible to receive at least $7,500 each.
Another $1 million was set aside for guests who were questioned or interrogated by immigration authorities, with each guest receiving $1,000.
The remaining $1 million will go to guests whose information was turned over to immigration authorities from Feb. 1, 2017 to Nov. 2, 2018. They will receive $50 each.
Motel 6 will also pay up to $1.3 million for the plaintiffs' legal fees and administrative costs.
The chain is controlled by the private equity firm Blackstone Group LP, which bought the brand in 2012.
Motel 6's management company, G6 Hospitality, has said it ordered its more than 1,400 U.S. and Canadian locations in September to stop voluntarily giving guest lists to ICE agents.
The case is Jane V. et al v Motel 6 Operating LP et al, U.S. District Court, District of Arizona, No. 18-00242.
(Reporting by Jonathan Stempel in New York; Editing by Susan Thomas)