Case Name: Thomas J. Butler, et al. v. Apple Inc., et al.
Case No.: 2014-1-CV-262989

This is a putative consumer class action arising from the alleged failure of Wi-Fi and Bluetooth functions on the iPhone 4S. The parties have reached a settlement, which the Court preliminarily approved in an order filed on April 24, 2019. The factual and procedural background of the action and the Court’s analysis of the settlement and settlement class are set forth in that order.

Before the Court is plaintiff Fernanda Rocha Hawkins’s motion for final approval of the settlement and for approval of her attorney fees, costs, and service award. Plaintiff’s motion is unopposed.

I. Legal Standards for Approving a Class Action Settlement

Generally, “questions whether a settlement was fair and reasonable, whether notice to the class was adequate, whether certification of the class was proper, and whether the attorney fee award was proper are matters addressed to the trial court’s broad discretion.” (Wershba v. Apple Computer, Inc. (2001) 91 Cal.App.4th 224, 234-235, citing Dunk v. Ford Motor Co. (1996) 48 Cal.App.4th 1794, disapproved of on other grounds by Hernandez v. Restoration Hardware, Inc. (2018) 4 Cal.5th 260.)

In determining whether a class settlement is fair, adequate and reasonable, the trial court should consider relevant factors, such as the strength of plaintiffs’ case, the risk, expense, complexity and likely duration of further litigation, the risk of maintaining class action status through trial, the amount offered in settlement, the extent of discovery completed and the stage of the proceedings, the experience and views of counsel, the presence of a governmental participant, and the reaction of the class members to the proposed settlement.

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at pp. 244-245, internal citations and quotations omitted.)

In general, the most important factor is the strength of plaintiffs’ case on the merits, balanced against the amount offered in settlement. (See Kullar v. Foot Locker Retail, Inc. (2008) 168 Cal.App.4th 116, 130.) Still, the list of factors is not exclusive and the court is free to engage in a balancing and weighing of factors depending on the circumstances of each case. (Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245.) The court must examine the “proposed settlement agreement to the extent necessary to reach a reasoned judgment that the agreement is not the product of fraud or overreaching by, or collusion between, the negotiating parties, and that the settlement, taken as a whole, is fair, reasonable and adequate to all concerned.” (Ibid., quoting Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1801, internal quotation marks omitted.)

The burden is on the proponent of the settlement to show that it is fair and reasonable. However “a presumption of fairness exists where: (1) the settlement is reached through arm’s-length bargaining; (2) investigation and discovery are sufficient to allow counsel and the court to act intelligently; (3) counsel is experienced in similar litigation; and (4) the percentage of objectors is small.”

(Wershba v. Apple Computer, Inc., supra, 91 Cal.App.4th at p. 245, citing Dunk v. Ford Motor Co., supra, 48 Cal.App.4th at p. 1802.) The presumption does not permit the Court to “give rubber-stamp approval” to a settlement; in all cases, it must “independently and objectively analyze the evidence and circumstances before it in order to determine whether the settlement is in the best interests of those whose claims will be extinguished,” based on a sufficiently developed factual record. (Kullar v. Foot Locker Retail, Inc., supra, 168 Cal.App.4th at p. 130.)

III. Terms and Administration of the Settlement

The non-reversionary gross settlement amount is $6,645,440. Attorney fees and expenses of $1,500,000 (22.5 percent of the gross settlement) and administration costs not to exceed $169,000 will be paid from the gross settlement. The named plaintiff, Fernanda Rocha Hawkins, will also seek an enhancement award of $1,000.

The net settlement fund of approximately $4,975,440 will be divided among participating class members in the following manner:

• The 12,989 class members who paid $199 for an out-of-warranty replacement iPhone 4S due to a Wi-Fi/Bluetooth issue will receive $199.

• Class members who paid a lesser amount for a replacement iPhone will receive $30 (for the 386 customers who paid between $1-30); $50 (for the 42 customers who paid $30.01-50); $75 (for the 7 customers who paid between $50.01-75); $100 (for the 422 customers who paid $75.01-100); $150 (for the 103 customers who paid $100.01-150); $185 (for the 286 customers who paid $150.01-185); or $198 (for the 3 customers who paid $185.01-198).

• The 98,490 class members who complained about a Wi-Fi/Bluetooth issue when their iPhone 4S was out of warranty but did not purchase a replacement from Apple will receive $23.

Class members will not be required to submit a claim to receive their payments. Funds associated with checks uncashed after 185 days will distributed half to the National Center for Youth Law, a child advocacy program, and half to Public Counsel, a nonprofit organization that provides legal services to the indigent.

Class members who do not opt out of the settlement will release all claims, causes of action, etc. “that were or reasonably could have been asserted based on the factual allegations in the Second Amended Complaint, or based on any facts discovered in the course of litigating the Action, or that relate to or arise out of all iPhone 4S Wi-Fi/Bluetooth issues.” The release specifically excludes claims “related to any phone models other than the iPhone 4S or problems with the iPhone 4S other than Wi-Fi or Bluetooth problems,” as well as claims asserted in “any ongoing or pending litigation against Apple.”

The notice process has now been completed. After receiving the class list from Apple and removing duplicate and Apple Inc. records, the administrator determined that there were 118,392 unique records. 21,905 records were not able to be noticed because they contained no email address or an invalid email address and no mailing address or an invalid mailing address. 103,827 records had no mailing address and 55,802 had no name. Between May 22 and 31, 2019, the administrator sent 80,481 email notices that did not bounce back and mailed 3,702 postcard notices, reaching 71.1 percent of the class.

The administrator then hired vendors to conduct reverse directory searches on 73,036 email records that lacked a name or mailing address and 25,263 email records that lacked a name or mailing address and bounced back the original email sent by the administrator. The vendors located 28,142 names and addresses from the first group and 8,640 from the second group. On August 23, 2019, the administrator mailed an updated summary notice postcard to the 8,640 individuals from the second group who had not yet received a notice. Following these efforts, the administrator is able to distribute checks to 50,036 of the 118,392 class members: 68,356 remain without a valid name or mailing address. Ultimately, there were no objections to the settlement and only one request for exclusion from the class.

Plaintiff’s counsel Eric A. Grover declares that the parties have agreed that the administrator should send an email to the addresses for which there is no corresponding name or mailing address, informing the recipient that he or she has 30 days to provide a name and mailing address to receive his or her settlement payment. At the Court’s direction, the parties submitted the proposed email notice with the supplemental declaration of Jay Geraci filed before the final fairness hearing. That notice is approved, with the modification that the notice shall display the class members’ payment amount and the response deadline together in bold in a box at the top of the email set off from the rest of the text. Plaintiff’s proposal of a reminder email shall also be adopted.

At preliminary approval, the Court found that the proposed settlement provides a fair and reasonable compromise to plaintiff’s claims. It finds no reason to deviate from these findings now, especially considering that there are no objections. The Court has reviewed the supplemental declarations of Jay Geraci and Eric Grover that were filed at its direction, and is satisfied that a substantial portion of the settlement funds allocated to class member payments will ultimately reach the class. While the Court was expecting a higher participation rate, it is satisfied that the parties have done all they can to ensure class members are able to participate in the settlement. The Court consequently finds that the settlement is fair and reasonable for purposes of final approval.

III. Attorney Fees, Costs, and Incentive Award

Plaintiff seeks a combined fee and cost award of $1,500,000, or 22.5 percent of the gross settlement, which is not an uncommon contingency fee allocation in a consumer class action. This award is facially reasonable under the “common fund” doctrine, which allows a party recovering a fund for the benefit of others to recover attorney fees from the fund itself. Plaintiff also provides a lodestar figure of $2,230,227.50 ($998,125 for Keller Grover LLP, $1,028,752.50 for Robbins Geller Rudman & Dowd LLP, and $203,350 for Law Offices of Scot D. Bernstein). The lodestar is based on 3,354.9 hours spent on the case by counsel and paralegals with billing rates of $275-1,050 per hour. While the number of attorneys and hours worked on the case appear to be somewhat high, the fee request is less than half of the lodestar. As a cross-check, the lodestar supports the percentage fee requested, particularly given the lack of objections to the attorney fee request. (See Laffitte v. Robert Half Intern. Inc. (Cal. 2016) 1 Cal.5th 480, 488, 503-504 [trial court did not abuse its discretion in approving fee award of 1/3 of the common fund, cross-checked against a lodestar resulting in a multiplier of 2.03 to 2.13].) Plaintiff’s counsel also incurred a total of $53,336.28 in costs ($10,013.96 by Keller Grover LLP, $40,039.97 by Robbins Geller Rudman & Dowd LLP, and $3,282.35 by Law Offices of Scot D. Bernstein), which will be covered by the combined fee and cost award. Plaintiff’s requested attorney fee and cost award is approved.

Finally, plaintiff requests a service awards of $1,000. To support her request, she submits a declaration describing her efforts on the case. The Court finds that the class representatives is entitled to an enhancement award and the amount requested is reasonable. The $169,000 in administrative costs are also approved.

IV. Conclusion and Order

In accordance with the above, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED THAT:

Plaintiff’s motion for final approval is GRANTED. The following class is certified for settlement purposes:

All customers who, according to Apple’s company records, owned an iPhone 4S that was purchased on or after September 1, 2012, whose phone had a Wi-Fi module that was or may have been manufactured by USI, and who either paid for an out-of-warranty replacement iPhone 4S due to a Wi-Fi/Bluetooth issue or complained to Apple about a Wi-Fi/Bluetooth issue when their iPhone 4S was out-of-warranty (limited to the first customer who complained to Apple about a specific [by serial number] device).

Excluded from the class is the one individual who submitted a timely request for exclusion.

Judgment shall be entered through the filing of this order and judgment. (Code Civ. Proc., § 668.5.) Plaintiff and the members of the class shall take from their complaint only the relief set forth in the settlement agreement and this order and judgment. Pursuant to Rule 3.769(h) of the California Rules of Court, the Court retains jurisdiction over the parties to enforce the terms of the settlement agreement and the final order and judgment.

The Court sets a compliance hearing for July 31, 2020 at 10:00 A.M. in Department 1. At least ten court days before the hearing, class counsel and the settlement administrator shall submit a summary accounting of the net settlement fund identifying distributions made as ordered herein, the number and value of any uncashed checks, amounts remitted to the cy pres beneficiary, the status of any unresolved issues, and any other matters appropriate to bring to the Court’s attention. Counsel shall also submit an amended judgment as described in Code of Civil Procedure section 384, subdivision (b). Counsel may appear at the compliance hearing telephonically.

The Court will prepare the order.

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