Grace v. Apple, Inc.

District Court, N.D. California·Decided March 31, 2021·No. 5:17-cv-00551·Unknown

Opinion

UNITED STATES DISTRICT COURT

CHRISTINA GRACE, et al., Case No. 17-CV-00551-LHK Plaintiffs, ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR v. ATTORNEYS’ FEES APPLE, INC., Re: Dkt. No. 429 Defendant.

Before the Court is Class Counsel’s motion for attorneys’ fees, ECF No. 429. The Court held a hearing on the motion on February 8, 2021. ECF No. 445 (“Mot.”). In response to the Court’s questions at the hearing, Class Counsel filed four supplemental declarations regarding attorneys’ fees on February 19, 2021. ECF Nos. 450–53. On February 26, 2021, Defendant Apple, Inc. filed an opposition to Class Counsel’s supplemental declarations; and Class Counsel filed a reply on March 5, 2021. ECF Nos. 454 (“Supp. Opp’n”), 455 (“Supp. Reply”). Having considered all the briefing, the oral arguments, the relevant law, and the record in this case, the Court hereby GRANTS IN PART and DENIES IN PART Class Counsel’s motion for attorneys’ fees. 1 Case No. 17-CV-00551-LHK Specifically, the Court orders that fees in the amount of $5.04 million and expenses in the amount of $1,083,045.14 be paid to Class Counsel, and that service awards of $7,500 be paid to each Class Representative. I. LEGAL STANDARD “Where a settlement produces a common fund for the benefit of the entire class, courts have discretion to employ either the lodestar method or the percentage-of-recovery method.” In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935, 942 (9th Cir. 2011). To guard against an unreasonable result, the Ninth Circuit encourages district courts to “cross-check[] their calculations against a second method.” Id. at 944. Accordingly, the Court calculates the attorneys’ fees using the percentage-of-recovery method and then cross-checks its calculations against the lodestar method. See id. at 944–45. “Because in common fund cases the relationship between plaintiffs and their attorneys turns adversarial at the fee-setting stage, courts have stressed that when awarding attorneys’ fees from a common fund, the district court must assume the role of fiduciary for the class plaintiffs.” In re Wa. Pub. Power Supply System Sec. Litigation (WPPSS), 19 F.3d 1291, 1302 (9th Cir. 1994). Thus, “fee applications must be closely scrutinized.” Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1052 (9th Cir. 2002). “Rubber-stamp approval, even in the absence of objections, is improper.” Id. Where the percentage-of-recovery method is used, it is well-established that 25% of a common fund is a presumptively reasonable amount of attorneys’ fees. In re Bluetooth, 654 F.3d at 942 (“[C]ourts typically calculate 25% of the fund as the ‘benchmark’ for a reasonable fee award . . . .”). However, the Ninth Circuit has emphasized that “[t]he 25% benchmark rate, although a starting point for analysis, may be inappropriate in some cases.” Vizcaino, 290 F.3d at 1048. “Selection of the benchmark or any other rate must be supported by findings that take into account all the circumstances of the case.” Id.; see also WPPSS, 19 F.3d at 1298 (“[C]ourts cannot 2 Case No. 17-CV-00551-LHK rationally apply any particular percentage . . . in the abstract, without reference to all the circumstances of the case.”). II. DISCUSSION Class Counsel moves for fee award substantially greater than the 25 percent benchmark rate. Specifically, Class Counsel seeks 30 percent of the settlement fund ($5.4 million). In addition, Class Counsel seeks reimbursement of $1,090,393.14 in expenses and $7,500 service awards to each of the two Class Representatives. The Court ultimately concludes that an award between the 25 percent benchmark and Class Counsel’s 30 percent request is appropriate. Specifically, the Court awards 28 percent of the settlement fund, which yields fees of $5.04 million and an adjusted multiplier of 0.72. As for expenses, the Court concludes that nearly all of Class Counsel’s requested reimbursement is reasonable. The Court orders reimbursement of $1,083,045.14—an amount which excludes $7,348 in unreasonable hotel expenses. Lastly, the Court approves $7,500 service awards for both Class Representatives. Below, the Court analyzes the fee award, expenses, and service awards in turn. A. The Court awards 28 percent of the settlement fund in attorneys’ fees. The Court awards 28 percent of the settlement fund in attorneys’ fees—a moderate increase to the 25 percent benchmark rate. The Court reaches this award based on consideration of the following factors: (1) the skills displayed by Class Counsel; (2) the risks taken by Class Counsel; (3) the result achieved for the class; and (4) a lodestar cross-check. See Vizcaino, 290 F.3d at 1048–49 (weighing the risks taken by counsel and the result achieved for the class); see also Serrano v. Priest, 20 Cal. 3d 25, 49 (Cal. 1977) (stating factors under California law). The Court discusses each factor in turn. 1. Class Counsel displayed skill by bringing a novel claim and analyzing technical subject matter. The skills displayed by Class Counsel merit a moderate upward adjustment from 25 percent. Class Counsel’s skills were displayed in two ways. To start, Class Counsel achieved an 3 Case No. 17-CV-00551-LHK $18 million settlement based in part on a novel claim: trespass to chattels. See ECF No. 57 at 12:14–15 (stating that “this trespass to chattels claim seems novel”). Before the instant case, the Court “ha[d]n’t seen a trespass case of action in [a] consumer class action.” Id. at 5:15–18. Moreover, the instant case’s subject matter was technical. The case required analyzing the source code for Apple’s FaceTime product. See, e.g., ECF No. 71 (source code protective order). Specifically, Class Counsel alleged that Apple disabled FaceTime for iOS 6 and earlier operating systems by prematurely terminating a digital certificate. See Grace v. Apple, Inc., 328 F.R.D. 320, 328 (N.D. Cal. 2018) (background). Class Counsel further analyzed different technical methods to connect FaceTime calls, namely “peer-to-peer” versus “relay.” Id. at 327. The characteristics of these distinct methods allegedly motivated Apple’s conduct. Id. In short, the novel nature of the trespass to chattels claim and the technical subject matter of the instant case support a moderate upward adjustment from a 25 percent fee award. However, these considerations do not support the 30 percent fee award requested by Class Counsel. The weakness of Class Counsel’s case on the merits supports a 28 percent fee award instead. Specifically, the trespass to chattels claim, though novel, was not compelling and not particularly meritorious. To survive the motion to dismiss, the trespass to chattels claim required the Court to assume that “FaceTime was permanently disabled on iOS6 and earlier operating systems, and that Plaintiffs could not transition to iOS7.” Grace v. Apple Inc., No. 17-CV-00551, 2017 WL 3232464, at *13 (N.D. Cal. July 28, 2017) (emphasis in original). However, in fact, class members chose not to transition to, and declined, a free software update (iOS7) that would re-enable FaceTime—and thus redress class members’ injury—because the update would allegedly “significantly impair” class members’ iPhones. Grace v. Apple, Inc., 328 F.R.D. 320, 328 (N.D. Cal. 2018). If the case had proceeded to adjudication on the merits, it is possible that Apple would have prevailed. Cf. WhatsApp Inc. v. NSO Grp. Techs. Ltd., 472 F. Supp. 3d 649, 685 (N.D. Cal. 4 Case No. 17-CV-00551-LHK 2020) (dismissing trespass to chattels claim for failure to “detail any actual harm caused by defendants’ program or access”). Despite the potential weakness of their claims, Class Counsel cite Hopkins v. Stryker Sales Corporation to support

Free access — add to your briefcase to read the full text and ask questions with AI

Grace v. Apple, Inc., (N.D. Cal. 2021).

Grace v. Apple, Inc. (Grace v. Apple, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

In Re Bluetooth Headset Products Liability
654 F.3d 935 (Ninth Circuit, 2011)
In Re Washington Public Power Supply System Securities Litigation. Class Chemical Bank, in Its Representative Capacity as Trustee for Bondholders, and Bernstein, Litowitz, Berger & Grossman Milberg, Weiss, Bershad, Specthrie & Lerach Molloy, Jones & Donahue, P.C. v. City of Seattle Oregon Public Entities, Benton Rural Electric Association, Washington Washington Public Power Supply System R.W. Beck and Associates Ebasco Services Incorporated United Engineers & Constructors, Inc. Director Participants' Committee Public Utility District No. 1, of Klickitat County United States of America, on Behalf of Itself and Its Agency, the Bonneville Power Administration State of Washington Bonneville Power Administration, Class and Lawrence Laub v. Continental Assurance Company v. City of Seattle Oregon Public Entities, Benton Rural Electric Association, Washington Washington Public Power Supply System R.W. Beck and Associates Ebasco Services Incorporated United Engineers & Constructors, Inc. Director Participants' Committee Public Utility District No. 1, of Klickitat County United States of America, on Behalf of Itself and Its Agency, the Bonneville Power Administration State of Washington Bonneville Power Administration, Class and Continental Assurance Company v. Berger & Montague, P.A. v. City of Seattle Oregon Public Entities, Benton Rural Electric Association, Washington Washington Public Power Supply System R.W. Beck and Associates Ebasco Services Incorporated United Engineers & Constructors, Inc. Director Participants' Committee Public Utility District No. 1, of Klickitat County United States of America, on Behalf of Itself and Its Agency, the Bonneville Power Administration State of Washington Bonneville Power Administration
19 F.3d 1291 (Ninth Circuit, 1994)
Welch v. Metropolitan Life Ins. Co.
480 F.3d 942 (Ninth Circuit, 2007)
Martin Gonzalez, Sr. v. City of Maywood
729 F.3d 1196 (Ninth Circuit, 2013)
Moreno v. City of Sacramento
534 F.3d 1106 (Ninth Circuit, 2008)
Serrano v. Priest
569 P.2d 1303 (California Supreme Court, 1977)
Rodriguez v. West Publishing Corp.
563 F.3d 948 (Ninth Circuit, 2009)
McDaniel v. County of Schenectady
595 F.3d 411 (Second Circuit, 2010)
Jadwin v. County of Kern
767 F. Supp. 2d 1069 (E.D. California, 2011)
Charles T. Johnson v. NPAS Solutions, LLC
975 F.3d 1244 (Eleventh Circuit, 2020)
Vizcaino v. Microsoft Corp.
290 F.3d 1043 (Ninth Circuit, 2002)
Anastasi v. Wright Medical Technology, Inc.
16 F. Supp. 3d 1032 (E.D. Missouri, 2014)
In re Toys "R" US-Delaware, Inc.
295 F.R.D. 438 (C.D. California, 2014)
Ontiveros v. Zamora
303 F.R.D. 356 (E.D. California, 2014)