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Judge Wants To See Math in Apple’s $27M Antitrust Fee Request

June 7, 2022 | Posted in : Fee Request

A recent Law 360 story by Dorothy Atkins, “Apple’s $100M Deal Gets OK, $27M Atty Fee Bid Hits Bump” reports that a California federal judge said she'll approve Apple's $100 million deal resolving class antitrust claims by app developers, but told class counsel she wants more information about the "math" behind their $27 million attorney fee request and how much their fee bid will reduce claims by small app developers.

During a hearing in Oakland, California, U.S. District Judge Yvonne Gonzalez Rogers told class counsel Steve W. Berman of Hagens Berman Sobol Shapiro LLP, to submit a mathematical breakdown of how much each class member would receive if she awarded class counsel $25 million in fees instead of the $27 million they requested from the nonreversionary settlement.

The judge noted that for some developers, who she pointed out "really are the people who are taking the brunt of this," the difference between $1,000 and $2,000 may be significant.

"That's why I want to see the numbers," she said.

Judge Gonzalez Rogers also noted the deal was struck in the wake of Epic Games Inc.'s high-stakes antitrust bench trial last year against Apple Inc., which she presided over, and which asserts similar but separate antitrust claims against Apple.

"This is a good settlement," the judge told Berman. "You all did a good job, but it's also pretty quick, relatively speaking, for these types of antitrust cases. And it certainly was in large part quick because we worked really hard to get the Epic v. Apple [trial] done in a short period of time, and as a consequence, you in some ways were the beneficiaries of that. So this isn't like [other antitrust litigation] where it was an extended period of litigation."

Apple struck the proposed deal with roughly 6,700 software app developers last year to resolve class claims first launched in 2019 by Donald R. Cameron, maker of a baby naming app, and Pure Sweat Basketball Inc., a basketball training company.

The developers accused Apple of ensuring its store is the only place for iPhone users to buy apps and imposing allegedly anti-competitive, 30% commission fees on all in-app purchases.

Judge Gonzalez Rogers preliminarily approved the deal in November 2021. In March, Apple said class counsel's request for $27 million in fees is higher than the 25% benchmark set by the Ninth Circuit.

During the hearing Tuesday, Berman agreed to submit the additional information to the judge by the end of the day, but he also pointed out that class counsel not only filed the case and negotiated a significant settlement for the class — which he noted represents 19% of the potential maximum recovery — but class counsel also took all the depositions.

He added that the $27 million fee request, which represents 27% of the total fund, is within the range of percentages approved by other courts in the district. He also noted the fee request also represents a 2.4 lodestar hourly multiplier, which is also "in the realm of multiples" affirmed by the Ninth Circuit.

Additionally, he said class counsel expects the claims rate to increase from roughly 30% to 40% by the time checks are sent out at the end of the summer, in part due to class counsel's repeated efforts to reach class members.

"We weren't sitting back thinking our job was done," he said.

Even with awarding class counsel $27 million in fees, some app developers will likely receive between $80,000 and $123,000, which is much higher than most class action payouts, he said.

"People are getting real money," he said.

At the end of the hearing, Judge Gonzalez Rogers said she would take the matter under advisement.

She added she wanted to take the opportunity to inform litigants in the courtroom that the Northern District of California is "now in the worst emergency of our entire circuit" due to judicial shortages.

"We have multiple vacancies, we have no new judges yet, and our weighted case average is 817 cases per district judge," she said.

She added that the district judges' criminal dockets are "exploding" and even if new judges are nominated, it'll take months for U.S. Congress to confirm them.

"I just want to encourage everybody in your law firms and the bar to think about consenting to magistrate judges," the judge told the attorneys. "Try to only bring us things you actually have to because we are all feeling it."

Judge Gonzalez Rogers also noted that multiple judges in the district — including U.S. District Judge Edward Davila who has been presiding over criminal fraud trials against former Theranos executives for nearly a year — have been in multiple months-long trials, and attorneys "now need to think beyond your disputes and try to really be judicial with what your filings because there's a huge impact."

"We're in a particular mess these days," she said.