MDL Court Grants Final Approval to iPhone Throttling Suit Settlement

The multidistrict In Re: Apple Inc. Device Performance Litigation has concluded following Judge Edward J. Davila’s approval of the class settlement on Wednesday. The court ruled that the settlement was fair, reasonable, and adequate given the case’s history and Apple’s potential liability for iPhones that allegedly experienced diminished performance as a result of proprietary operating system updates.

The order recounted that news of the phones’ performance flaws came to light in December 2017. Reportedly, between then and June 2018, 66 class action complaints were filed around the country, and four in California state courts. The federal cases were consolidated in 2018 and, like the state cases, proceeded through rounds of dismissal briefing and extensive discovery, wherein Apple produced more than 7 million documents.

The parties began settlement negotiations in September 2019, and the discussions concluded in February last year, when the parties reached an agreement. As previously reported, the class settlement provides for a non-reversionary minimum cash sum of $310 million, with a maximum of $500 million, depending on attorneys’ fees and expenses, named plaintiff service awards, notice expenses, and the aggregate value of approved claims. During the claims period, more than 3.25 million claims were submitted out of more than 90 million potential claims, Judge Davila noted.

In approving the comprehensive settlement, and among other considerations, the court determined that the figure was within the range of reasonableness, citing an analysis conducted by the plaintiffs’ consultant. The calculation showed that had the plaintiffs fully prevailed on all of their remaining claims, damages would have amounted to between $18 and $46 per iPhone. 

The court explained that although the information initially presented in support of this calculation was thin, the plaintiffs submitted a supplemental brief shortly after the Dec. 4, 2020 hearing. Therein, the plaintiffs described their methods, including an explanation of their expert economist’s regression analysis that used “actual sales data in the secondary market for both the resale value of eligible devices during the relevant period and resale of previous models of iPhones.”

A number of objectors argued that the amount of compensation promised by the settlement was too low, but the court overcame those arguments after finding that the settlement met the Federal Rule of Civil Procedure prerequisites. Ultimately, Judge Davila found a “strong evidentiary basis” weighing in favor of approval of the $310 million sum.

In its Thursday order regarding the plaintiffs’ motion for attorneys’ fees, service awards and expenses, the court awarded $80.6 million in attorneys’ fees out of the $87.73 million requested.

Interim co-lead counsel for the plaintiffs are Cotchett, Pitre & Mccarthy LLP and Kaplan Fox & Kilsheimer LLP. Apple is represented by Gibson, Dunn & Crutcher LLP.