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Class Counsel Earn $80.6M in Fees in Apple iPhone Slowdown Settlement

March 20, 2021 | Posted in : Class Fee Objector, Contingency Fees / POF, Expenses / Costs, Fee Award, Fee Award Factors, Fee Calculation Method, Lodestar, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Mike Curley, “Attys Get $80.6M in Apple IPhone Slowdown Settlement,” reports that a California federal judge greenlighted a settlement of up to $500 million for iPhone users who accused Apple of deliberately slowing down their devices with an update and granted class counsel $80.6 million in fees after objections from some class members, Apple and government entities that the initial request was too high.  In a pair of orders, U.S. District Judge Edward J. Davila first granted final approval to the settlement, which will see Apple pay out between $310 million and $500 million — which the judge called one of the largest class action settlements in the circuit — then turned to the divisive request for fees.

Those fees are to be awarded to Cotchett Pitre & McCarthy LLP; Kaplan Fox & Kilsheimer LLP; the Law Offices of Andrew J. Brown; and the Brandi Law Firm.  Class counsel in the case had requested $87 million in fees, which prompted Apple to ask the court to cut it down by at least $7 million.  While Judge Davila praised the attorneys for their work on the case, including their assumption of the risks of taking it on contingency, the risks of continued litigation, and the substantial payout that class members are likely to receive, he said that other factors don't support increasing the total fees beyond the court's normal 25% benchmark.

In particular, the judge noted how a large settlement fund could support granting attorneys a higher percentage, but in this case, the high settlement fund is mostly the result of the large amount of class members — not the amount of work performed by the class counsel.  "Class counsel's work in litigating this case up to the point of reaching settlement would have been the same whether there were 10,000, 100,000, 1,000,000 or more devices at issue," the judge wrote.

For the purposes of the fee calculation, the judge decided it was most appropriate to go by the percentage-of-the-fund model, based on the $310 million minimum Apple will have to pay, rather than a lodestar model that would be used for a settlement based on the number of claims made, and the judge found that 26% of the $310 million — or $80.6 million — was appropriate.  He also granted $995,245 in expenses, finding that none of the objections to either the fees or the expenses warranted knocking the total down any further than that.

The settlement resolves dozens of consumer protection lawsuits that were filed in 2018 after Apple admitted to issuing software updates that slowed certain iPhones.  The suits allege that Apple designed its software updates to slow down some phone models, nudging consumers to buy newer iPhones.  Under the deal, Apple agreed to pay up to $500 million in total, depending on the amount of iPhone users to participate in the deal, according to court filings, with a minimum settlement fund of $310 million.  Class members would receive $25 each for their phones.  If the payouts, attorney fees and expenses don't add up to at least $310 million, class members will receive up to $500 apiece until that minimum settlement amount is reached.