Smith v. Apple, Inc.
- Haywood Gilliam
- 4:21-cv-09527
- U.S. District Court · Northern District of California
- 2
In Smith v. Apple, Inc., Judge Gilliam directed supplemental briefing before deciding whether to preliminarily approve the proposed class settlement.
The plaintiffs, Apple, Inc., and the proposed settlement class members, because the court required additional information before deciding whether to preliminarily approve the proposed settlement.
What happened
In Smith v. Apple, Inc., the plaintiffs asked the court to preliminarily approve an unopposed class-action settlement with Apple, Inc. The court held a hearing and then reviewed the proposed agreement in more detail.
The court found that the parties had not provided enough evidence on two issues central to deciding whether the settlement was fundamentally fair, adequate, and reasonable. The plaintiffs’ filing did not estimate the class’s possible recovery if they fully prevailed on each claim, so the court could not assess whether the settlement’s discount was reasonable. The agreement also allowed Apple to reject the settlement if more than a confidential threshold number of class members opted out, but the parties had not submitted that threshold for the court’s review.
Judge Haywood S. Gilliam, Jr. directed the parties to file supplemental briefing addressing both issues and to submit the opt-out threshold for private court review. The parties were ordered to file a statement of five pages or less by October 22, 2024; the court did not decide preliminary approval in this order.
The detailed version
- Smith v. Apple, Inc. · No. 4:21-cv-09527
- Haywood Gilliam
- Oct. 15, 2024
Background
The plaintiffs filed an unopposed motion for preliminary approval of a proposed class-action settlement with Apple, Inc. The court held a hearing on the motion on October 3, 2024, and took it under submission.
Issues identified by the court
The court explained that it needed sufficient evidence to determine whether the proposed settlement fell within the range of a fundamentally fair, adequate, and reasonable settlement. It identified two deficiencies.
First, Northern District of California guidance requires a motion for preliminary settlement approval to state the class recovery under the settlement, the potential recovery if the plaintiffs fully prevailed on each claim, and the justification for any discount. The court found that the plaintiffs’ motion did not estimate the potential recovery if the plaintiffs prevailed at trial. Without that information, the court could not compare the settlement with the reasonably likely result at trial or evaluate whether any discount was reasonable.
Second, the proposed agreement stated that if the number of settlement-class members who opted out exceeded a threshold agreed to by the parties and submitted confidentially to the court, Apple could reject the settlement, making the agreement null and void. The parties had not submitted the document containing that provision for the court’s review. The court therefore could not evaluate the reasonableness of the term.
Disposition
The court DIRECTED the parties to file supplemental briefing addressing both issues and to submit the opt-out threshold provision for in camera review, meaning private review by the court. Counsel were ordered to file a statement of five pages or less by October 22, 2024. The order did not grant or deny preliminary approval of the settlement.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.