$500M Apple Throttling Settlement Gets Preliminary Approval
The settlement has a projected value of $310 million to $500 million to iPhone 6 and iPhone7 users in the case led in part by Boca Raton plaintiffs attorney Mark Dearman.
May 15, 2020 at 03:51 PM
5 minute read
The original version of this story was published on The Recorder
A federal judge has given preliminary approval to a potential $500 million class action settlement with Apple Inc. over the alleged throttling of older iPhones.
The settlement reached Feb. 28 could provide $25 to each class member, depending on how many make claims, and comes after nearly two years of discovery battles, including sanctions against plaintiffs attorneys Joseph Cotchett and Mark Molumphy of Cotchett, Pitre & Molumphy in Burlingame, California.
"The settlement was reached after extensive litigation," Molumphy said Friday. "This was a very active, hotly contested case. Virtually everything was contested."
At a hearing Friday, U.S. District Judge Edward Davila in San Jose, California, found the settlement met the requirements of federal rules governing class actions and the Northern District of California's guidelines for class actions.
The judge conducted the hearing via Zoom given the social-distancing orders tied to COVID-19. Both he and Apple attorney Christopher Chorba of Gibson, Dunn & Crutcher joked that the screen displaying the faces of 11 lawyers resembled the TV game show "Hollywood Squares."
Mark Dearman of Robbins Geller Rudman & Dowd in Boca Raton headed the 23-member plaintiffs executive committee coordinating assignments, communications with the court and distributing its. orders. He had no comment by deadline Monday.
The settlement resolves claims, coordinated into multidistrict litigation, that Apple surreptitiously throttled iPhone 6 and 7 products when consumers upgraded software on the devices. Davila dismissed several of the claims, including consumer fraud and those brought by Apple customers in 39 other countries.
"Through extensive briefing on the pleadings, your honor narrowed this case quite significantly, so now we're dealing with computer hacking and computer intrusion claims," Chorba said Friday.
Apple has denied the allegations — with Chorba noting there was a "fundamental disagreement on the impact of these software upgrades." Chorba also indicated the settlement would likely end up costing closer to $310 million, the minimum amount projected and accepted by both sides. At that amount, Apple agreed not to accept any reversionary funds should the number of claimants fall below the settlement's estimate.
He noted the uncertified class did not include everyone who owned one of the phones but was limited to those who downloaded the software upgrades.
"It's a very, very narrow group," Chorba said Friday. "The number of devices does not correlate with the number of people."
Davila spent most of the hearing focused on whether lawyers planned to include languages other than English in the notices, which will be sent primarily electronically using Apple ID information. He also wanted to make sure enough class members get the notices, noting the settlement proposed a "discrete" and "finite" method that could result in a "high degree of accuracy" in reaching them.
"That gives me confidence the parties will be able to capture the class with some degree of certainty," the judge said.
Davila did not address a proposed $93 million in attorney fees filed by 39 plaintiffs firms appointed in the MDL plus dozens of others working on related cases in California state courts, which are part of the settlement. In a March 13 statement, Apple said it "reserves its right to object to and oppose class counsel's forthcoming requests for attorneys' fees and/or expenses on all grounds."
Davila also did not mention his 2019 sanctions ruling against Cotchett, one of the co-lead plaintiffs attorneys, and Molumphy, both of whom Apple attempted to remove from the case after they disclosed confidential information during a discovery hearing last year. The order required Cotchett to get court permission before arguing motions in the case.
At the start of Friday's hearing, Chorba questioned whether the judge approved of Cotchett and Molumphy participating, and Davila assured that he wished to hear from them.
Davila also did not question the lawyers on a May 11 objection filed in the case that insisted the Cotchett Pitre firm had a conflict of interest because its lawyers previously represented Apple in an antitrust case over lithium ion batteries. That filing came from Edward and Darlene Orr, who have objected to settlements in other cases.
Davila said objectors could raise concerns before a hearing on final approval, which he suggested could be in December. In approving the settlement, he emphasized he welcomed Cotchett's statements on any matters involving the case.
"The court finds counsel will continue to represent and prosecute this case vigorously," he said. "The court finds there are no conflicts that impair the representing of the class in this matter."
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