Judge Rejects Sony PlayStation 3 Settlement

OAKLAND, Calif. (CN) – A federal judge has refused to grant final approval to a Sony PlayStation 3 settlement, finding PS3 buyers had to jump through too many hoops to recover their money.

U.S. District Judge Yvonne Gonzalez Rogers in September last year tentatively approved an unlimited settlement fund for purchasers of early-model PS3s.

But in a Tuesday ruling, Rogers objected to the claims process and the “disproportionality” of a $2.25 million request for attorneys’ fees, compared to recovery for the class.

The settlement would compensate people who bought a PS3 believing it could run a separate Linux operating system in addition to its built-in gaming system.

While earlier models had that functionality as advertised, the “Other OS” feature was wiped out by a software update on April 1, 2010, according to the lawsuits.

Sony agreed to an unlimited settlement fund that would pay $55 to each class member that used the Linux operating system and $9 to any class member who purchased an early-model “fat” PS3 between Nov. 1, 2006 and April 1, 2010.

Rogers found the claims process created too many obstacles for class members to submit proofs of purchase.

Sony sent emails to 6.9 million potential class members, instructing them to call a phone number and use their Sony Network ID to obtain a “temporary serial number” in case they no longer had the PS3 units they bought more than half a decade ago.

“The purpose of the temporary serial number remains obscure,” Rogers wrote, adding that if Sony can establish proof of purchase based on a user’s network ID, the extra steps for submitting claims seem unnecessary.

“This ‘remedial’ process begs the question of why the claimants were required to provide receipts or serial numbers in the first place, i.e. if Sony already had that information in its database and could simply confirm the claim by using the claimant’s PlayStation Network ID,” Rogers wrote in denying without prejudice Sony’s motion for final approval.

Rogers also found the parties made no effort to make it easier for those who used the Linux operating system on the PS3 to prove they used that feature, even though they faced the same problem – that the PS3s were no longer in their possession.

Nor could she see justification to explain why only 11,300 of a potential 10 million claims were filed during the 10-week claims period from Sept. 28 to Dec. 7, 2016.

Attorneys for both sides said the claims rate was low because the number of PS3 purchasers who cared about or used the “Other OS” feature was small — but they offered no proof to support that argument, Rogers said.

“No evidence of these limiting considerations is offered to justify estimating the class to be less than 1 percent of the total purchasers,” Rogers wrote.

The judge also found that class attorneys failed to provide “more than the most summary information” to support their request for $2.25 million in attorneys’ fees and costs.

“The Court has concerns, based upon how the notice and claims process preceded, the results it produced, and the disproportionality of the attorneys’ fees versus the class recovery, that the settlement agreement is not fair, reasonable, and adequate,” Rogers wrote in the 8-page ruling.

She scheduled a case management conference for Feb. 13.

Attorneys for Sony and the class did not immediately return phone calls seeking comment Wednesday morning.

James Pizzirusso with Hausfield LLC in Washington, D.C. serves as lead class counsel, and Luanne Sacks with Sacks, Ricketts & Case in San Francisco represents Sony.