Shin v. Plantronics, Inc.

Background

Phil Shin alleged that Plantronics, Inc. sold BackBeat FIT wireless headphones that were defective and marketed them as “sweatproof” and “waterproof” when they were not. The parties settled before Plantronics’s motion to dismiss was adjudicated and before formal discovery had been completed. The court had previously granted preliminary approval of an amended settlement.

Settlement Class and Relief

The court certified a settlement class consisting of people domiciled in the United States and its territories who purchased the specified Plantronics BackBeat FIT headphones at retail between April 1, 2014, and September 16, 2019. The court found that the class met the requirements of Federal Rule of Civil Procedure 23, including sufficient size, common legal or factual questions, a representative claim typical of the class, and adequate representation. The class contained more than one million members.

The settlement provides three alternative remedies:

- An extended limited warranty for qualifying purchasers, allowing a functional replacement if the headphones develop specified battery, charging, waterproofing, moisture, or sweat-proofing problems. - A $50 cash payment for class members who provide proof of purchase and evidence that they previously complained to Plantronics about a qualifying problem. - A $25 cash payment for class members who provide proof of purchase and attest that the headphones malfunctioned or failed to work properly because of a qualifying problem.

Class members who do not opt out release claims related to the headphones’ battery, charging, performance, ability to retain a charge, resistance to water, moisture, or sweat, and Plantronics’s advertising about those subjects. Other claims are not waived.

Final Approval Analysis

The court evaluated the settlement under Rule 23(e)(2) and the factors used in the Ninth Circuit. It found the strength of Shin’s case and the risk of maintaining class status neutral. The court found that further litigation would involve substantial time, expense, and complexity, and that the relief—extended warranties or $25 and $50 payments—was significant and directly targeted the alleged harm. The parties’ experience and views favored approval, while the lack of formal discovery weighed against approval.

Approximately 650,000 notices were sent, 49,895 class members submitted claims, one objection was received, and three class members opted out. The court found the approximately 3.8 percent claim rate reasonable. It also found no evidence of collusion, despite a provision concerning attorneys’ fees, because the fee amount was not disproportionate to the class relief, unpaid fees would not revert to Plantronics, and fee approval was separate from settlement approval.

Objection and Ruling

Class member Troy Scheffler objected that the settlement did not treat class members equitably and improperly limited the $50 payment to people who had previously complained about the headphones. The court found the objection untimely because it was received after the deadline. The court also rejected it on the merits, finding that the prior-complaint requirement was not arbitrary and could help establish that a claimant’s headphones had the alleged defect.

The court granted class certification, granted final approval of the settlement, and overruled Scheffler’s objection. It ordered that all valid claims be paid under the settlement’s terms and deadlines, released the released parties from the settled class claims, and required the parties to file a joint report about claim disbursements within 60 days. The court retained jurisdiction to enforce the approval order and settlement. Shin’s motion for attorneys’ fees was not decided in this order and was to be addressed separately by Judge Nathanael Cousins.