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Judge Upset Parties Discussed Attorney Fees in Apple Bag Check Settlement

December 20, 2021 | Posted in : Contingency Fees / POF, Fee Award, Fee Request, Fees & Judicial Discretion, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law360 story by Hannah Albarazi, “Alsup Miffed at Fee Provision in Apple’s $30M Bag Check Deal,” reports that U.S. District Judge William Alsup said he'll preliminarily approve a $30 million class settlement resolving claims that Apple shorted California workers for bag check wait times but slammed counsel for including a "clear sailing agreement" under which Apple won't oppose a 25% plaintiff attorney fee award.  "It looks like this is a bonanza for the lawyers and that maybe the class will get something, too," Judge Alsup said of the fee provision agreement in the settlement — which came after he ruled that Apple Inc. owed its retail workers for the time they spent awaiting and undergoing security checks.

"First, that's a form of clear sailing agreement, which the Ninth Circuit says is a red flag and a form of collusion.  Secondly, I have a clear-cut order in this very case saying you should completely leave attorneys fees up to me.  Do not make any agreement on it," Judge Alsup told counsel on both sides.

Apple's attorney Julie Dunne of DLA Piper tried to assuage his concerns, saying, "All we said was we would not oppose, but we did not say we agreed to any amount."  "You should not have discussed it at all," Judge Alsup responded. "It looks collusive."  Class co-counsel Kimberly A. Kralowec of Kralowec Law PC told the judge that there had been no collusion and that the negotiations were done under the supervision of multiple respected mediators.

But Judge Alsup said he views private mediation as a red flag, not a signal that the deal is non-collusive.  "In fact, private mediators have told me how they work, and I'm shocked to hear it's the art of what's possible and it's not the art of what's fair.  So please don't go there.  I don't buy that argument," Judge Alsup said.  "I feel the lawyers ought to know my rules by now, and you just thumbed your nose in my face," he said.  Judge Alsup said he would preliminarily approve the deal but stressed that attorney fees are his call "and not for you to negotiate over."

The proposed settlement would resolve claims Apple retail employees made in a July 2013 lawsuit, which alleged that the company illegally required them to clock out before two daily required bag checks that resulted in about 90 minutes of unpaid work each week.  The workers included a claim under the Private Attorneys General Act, the California law that allows workers to file labor claims on behalf of the state with the state Labor and Workforce Development Agency.

Last month, the workers struck a deal with Apple for $29.9 million.  After a slew of deductions, including attorney fees and costs, the net settlement amount would be distributed among the class members based on the number of shifts they worked at an Apple store in California between July 25, 2009, and Dec. 31, 2015.  On average, each class member is expected to receive $1,300, according to the workers.