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Monday, July 15, 2024 | Back issues
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Apple Owes $13M Fees in Warranty Class Action

(CN) - After settling claims that it failed to honor consumer warranties on iPhones and iPod Touches, Apple owes class counsel $13.25 million, a federal judge ruled.

Apple had agreed last April to a $53 million settlement in the class action led in San Francisco by Christopher Corsi, Charlene Gallion, Raj Johal and a married couple, Sean Pennington and Megan White.

The class alleged that Apple denied their warranty claims if a strip of paper on the bottom of their devices had turned pink or red, indicating that the device had been submerged in water. They said the chemically sensitive paper could change color based on humidity or sweat.

Hundreds of class members each received up to $300 in the settlement, depending on the type of device they owned. The settlement covered the original iPhone, as well as the iPhone 3G, iPhone 3GS, and the first, second and third-generation iPod Touch.

The co-lead class counsel at Fazio Micheletti in San Ramon, Calif., and at Chimicles & Tikellis in Haverford, Pa., wanted the court to set 30 percent of the settlement fund, or $15.9 million, aside for attorneys' fees and costs.

They noted such an award would still mean that approximately 132,000 class members would receive $211 each for their devices, plus such payments to the 43,000 class members whose claims were being verified at the time.

U.S. District Judge Richard Seeborg opted Monday to instead apply the 9th Circuit benchmark of 25 percent.

"While the results counsel achieved for the class are excellent, the size of the fund is such that applying the standard benchmark is manifestly sufficient to provide fair compensation," Seeborg wrote. "Accordingly, plaintiffs' counsel is awarded fees and costs of 25% of the settlement fund remaining after deduction of the expenses of settlement administration."

Seeborg clarified Thursday that his ruling had been "premised on the mistaken understanding that settlement expenses were to be deducted from the fund, and on the view that it would therefore be inappropriate to allow fees on the portion of the fund consumed by such expenses rather than distributed to the class."

He nevertheless refused to disturb the 25 percent benchmark, "notwithstanding the fact it will be slightly higher than contemplated by the April 14th order."

Apple had argued unsuccessfully that the attorneys' fee recovery should not exceed $8.78 million.

Seeborg also approved a $1,000 incentive award to each of the three individual class representatives. Pennington and White, as husband and wife, will split a joint $1,000 award.

A settlement website describes eligible class members as all owners of an iPhone or iPod Touch whose device was submitted for repair or replacement in the United States under Apple's one-year limited warranty or AppleCare Protection Plan, but was denied warranty coverage because Apple said the iPhone or iPod touch had been damaged by liquid.

The website also said: "To qualify for a cash refund, you must: (a) be a United States resident; (b) Apple denied warranty coverage for your iPhone on or before December 31, 2009, OR for your iPod touch on or before June 30, 2010; (c) when it was submitted to Apple for warranty coverage, your iPhone or iPod touch was covered either by its original one-year limited warranty or by an AppleCare Protection Plan; and (d) Apple denied warranty coverage because Apple stated that your iPhone or iPod touch had been damaged by liquid."

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