Randall Burkholder
Managing Director and Head of Settlement Administration
New York
Tue, Jul 18, 2023
The Kroll Lens: Monitoring Class Action Settlements – 2023, Volume IV
In Volume IV of Kroll’s Class Action Lens, we examine recent court decisions in class action settlements in the Northern District of California, Eastern District of California, District Court of Maryland and the Ninth Circuit Court of Appeals.
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Disclaimer: Please note that the content below is intended to report on class action decisions, and Kroll's Settlement Administration practice may not have been involved with these cases.
In Re: MacBook Keyboard Litigation
No. 5:18-CV-02813-EJD, 2023 WL 3688452 (N.D. Cal. May 25, 2023) (Davila, J.)
A multi-state class of computer purchasers brought consumer protection and warranty claims against Apple, alleging a defect in certain MacBook keyboards and a failure to provide adequate repairs. The Court granted final approval over several objections.
The Court noted that notice had been adequately provided, reaching more than 97% of all purchasers identified in the company’s records by means of both email and postal mail, and that less than 1% of class members did not receive any form of notice.
Looking first at whether the settlement was reached by arm's length negotiation, the Court noted that because the agreement was reached after certification, a heightened review of the 9th Circuit's Bluetooth factors need not apply. Nonetheless, the Court found that there was no evidence of collusion, counsel was well-experienced, and no reversionary interest had been included.
Applying the 9th Circuit's Churchill factors for reasonableness, the Court found that significant discovery and motion practice had been conducted, and that the risk in continuing litigation weighed in favor of the settlement. The Court also found that the amount sought was well-balanced among the different tiers of class members and was comparable with similar cases, and that a low number of objections or opt-outs were received.
The Court then addressed the objections. Some objectors had sought a higher-class member award amount, or modification of the class definition to account for their circumstances in failing to seek repairs. The Court found such requests were not a sufficient basis for objection. Another objector asserted that the settlement should contemplate a pro rata distribution of any remainder funds, but the Court found this issue was not a basis for denying approval and would be better determined once the existence or absence of remainder funds had been determined. The Court also found that four of the foregoing objectors had not proven they were class members. For these reasons, the Court overruled all objections.
Aldapa v. Fowler Packing Co. Inc.
No. 1:15-CV-00420-ADA-SAB, 2023 WL 3853482 (E.D. Cal. Jun. 6, 2023)
Migrant workers brought employment claims against a farming company, alleging violations of state and federal law. After the parties reached a settlement, the Court granted final approval.
In terms of the requested attorney fees, the Court found that the notice of the amount sought was adequate and that the counsel had asserted the right to fees and costs under the common fund doctrine, which was sufficiently supported. Despite the requested fees being higher than the 25% benchmark, the Court found the amount to be reasonable given the time and skill employed by the counsel and the class award size attained. The Court also noted this was comparable with similar contingent fee cases. Applying a lodestar cross-check, the Court determined that the fee award was lower than what had been merited by the time spent and billing rates. As such, the Court found the request reasonable, in addition to the costs incurred.
Turning to the incentive award, the Court deemed the Plaintiffs’ request for $10,000 appropriate in light of the fact that the Plaintiffs had expended significant effort and hardship in participating in the litigation and suffered loss of reputation and employment opportunities. The Court also found that these were comparatively low amounts based on the percentage of the class award, and that the Plaintiffs’ declarations were sufficient to support their request as reasonable.
Looking also at administrator costs, the Court noted that while the parties had agreed to set aside $120,000, this was higher than the initially estimated amount of $90,000. Regardless, pointing out that any remainder of that amount unused by the administrator would be redistributed to the class, the Court deemed the request reasonable and granted it.
Boger v. Citrix Systems, Inc.
No. 19-CV-01234-LKG, 2023 WL 3763974 (D. Md. Jun. 1, 2023) (Griggsby, J.)
After litigation involving claims for violation of the Telephone Consumer Protection Act (TCPA) and similar state laws settled, the Plaintiff sought final approval of the settlement.
The Court granted the request, reasoning in support of its decision first that certification was appropriate under Rule 23. For numerosity, the Court found a class size of 543,000 sufficient. For commonality and typicality, the Court found that all class members shared common issues and had suffered the same injury in receiving unsolicited calls, regardless of whether the Do Not Call Registry or withdrawal of consent were also factors for each individual member. The Court also found adequacy satisfied by virtue of the counsel's experience and a lack of conflict of interest.
In terms of Rule 23(b)(3), the Court found predominance met without a need for individualized proof, and that superiority was satisfied by the low amount of individual recovery otherwise. Thus, the Court found certification warranted.
Looking next at the settlement under Rule 23(e) and 4th Circuit factors, the Court first reviewed for fairness and found that the litigation had been sufficiently advanced with arm's-length negotiation by experienced counsel, and a reasonable class relief distribution procedure.
For adequacy of the settlement, the Court looked at other 4th Circuit factors and found the strength of the Plaintiff's case, likely difficulties that might arise at trial, the anticipated expense of litigation, the solvency of the Defendant and the lack of opposition to the settlement all weighed in favor of approval. Specifically, the Court noted that the ongoing appellate litigation involving TCPA auto-dialer cases could result in a change of law that would undermine the class claims. Additionally, the Court found the proposed payment of $44.14 to each class member to exceed the typical value of claims and expected TCPA statutory damages amounts in similar cases. Finally, the Court found the $10,000 service award requested to be comparable with other cases and reasonable given the Plaintiff's participation in the matter.
Lowery v. Rhapsody Int’l., Inc.
No. 4:16-cv-01135-JSW (9th Cir. Jun. 7, 2023) (Lee, J.)
A class of composers brought copyright claims against a music streaming company, which ended in a monetary recovery for the class members and an attorney fee award approved by the United States District Court for the Northern District of California. Upon review, the U.S. Court of Appeals for the 9th Circuit reversed and remanded, holding that the lower court should consider the specific value of the class award, and that a cross-check analysis should have been done to ensure proportionality. Here, the Court noted that in determining the value of a claims-made settlement, courts should consider the actual or anticipated value to the class rather than the maximum amount that could hypothetically be paid to the class.
In support of its decision, the Court analyzed the underlying fee award for abuse of discretion and the factual findings for clear errors. Ultimately, the Court found the fee award inappropriate, considering the benefit paid to the class, citing the 9th Circuit's Bluetooth factors. The Court found that the district court failed to consider the actual value of the award, and that calculating the award by following the Supreme Court precedent in Boeing Co. v. Van Gemert was not appropriate because the settlement agreement in the instant case had made class claims contingent upon the actual value claimed, a factor absent from Boeing.
The Court further reasoned that the Bluetooth factors encourage a cross-check method to avoid an unreasonable result and found that had the District Court applied a cross-check in the instant case it would have resulted in a different outcome. The Court took note of the fact that while counsel had spent considerable time on the case, this alone did not justify the requested fee award.
The Court also considered whether the case could be distinguishable by awarding fees under Copyright Act fee provisions. Here, the Court noted that the Supreme Court had already rejected this analysis under similar circumstances and therefore declined to apply such an analysis in the instant case. Although the Court acknowledged that the fee award in a Copyright Act case might justifiably exceed the class award in hypothetical terms under different sets of facts, under the present facts, that was not the case.
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