Class Actions, Poof!: Ninth Circuit Vacates $310 – 500 Million Class Settlement Based On Objectors’ Arguments To Settlement Fairness

That Meant $80.6 Million Class Counsel Fee Award Went POOF!, And Whether Fees For Parallel State Litigation Was Appropriate Had To Be Considered Based On Its Impact On Lodestar Multiplier.

            In Named Plaintiffs, et al. v. Apple, Inc., Case Nos. 21-15758 et al. (9^th Cir. Sept. 28, 2022) (published), the Ninth Circuit, based on some objectors’ arguments, vacated a $300 – 500 million class action settlement and $80.6 class action fee award (out of a requested $87.73 million) in a case alleging that Apple secretly throttled system performance of certain iPhones to mask battery defects.  The district judge on remand needed to use the correct legal standard to gauge the fairness of the settlement.  The panel did address a specific fee issue:  the district judge, on remand, needed to consider $4 million in fees expended in parallel coordinated state litigation as far as appropriateness because it impacted the lodestar multiplier awarded (which would have gone up, even though the district judge thought the lower multiplier was pretty high).  The appellate court did observe that district judges can pick either the lodestar or percentage method, choosing to cross-check with the other method depending on what method is chosen.