Grace v. Apple, Inc.

Background

Class Counsel moved for attorneys’ fees and expenses in connection with an $18 million non-reversionary common fund. Counsel requested 30% of the fund, or $5.4 million, $1,090,393.14 in expenses, and $7,500 service awards for each of the two class representatives, Christina Grace and Ken Potter. Apple opposed the requested amounts.

The court used the percentage-of-recovery method, under which 25% of a common fund is a usual benchmark, and cross-checked the result using the lodestar method. A lodestar is a calculation based on reasonable hours multiplied by reasonable hourly rates.

Attorneys’ Fees

The court awarded 28% of the $18 million settlement fund, or $5.04 million, rather than the 30% requested. It found that Class Counsel’s work involved a novel trespass-to-chattels claim and technical analysis of Apple’s FaceTime source code. The court also found that counsel took significant risks through motion practice and trial preparation and achieved a significant recovery with an easy claims process.

The court declined to award 30% in part because it viewed the trespass-to-chattels claim as weak on the merits. The court stated that, if the case had proceeded to a merits decision, Apple might have prevailed.

For the lodestar cross-check, the court reduced Class Counsel’s estimated $8,068,130 lodestar by $593,749. The reductions included $200,368 for non-working travel time, $232,122 for hours attributed to unsuccessful class-certification motions and a related appeal, $71,834 for a 10% reduction in time billed to case management and attorney meetings or strategy, and $89,425 for specifically identified block-billed time. The resulting adjusted lodestar was $7,474,381, which the court said confirmed that the $5.04 million fee award was not excessive.

Expenses

Class Counsel’s revised expense request was $1,090,393.14. The court found that nearly all of the requested expenses were reasonable but reduced the reimbursement by $7,348. That reduction represented 40% of $18,369.98 in hotel accommodations that the court found unreasonable. The court ordered $1,083,045.14 in expenses paid to Class Counsel from the settlement fund.

Service Awards

The court approved $7,500 service awards for Christina Grace and Ken Potter. It rejected Apple’s arguments that such awards were barred and that the representatives had not made significant contributions. The court noted that the representatives responded to discovery, prepared for and underwent depositions, and surrendered their iPhones for months so the devices could be imaged and analyzed.

Disposition

Judge Lucy Koh granted in part and denied in part the motion for attorneys’ fees. The order directed payment of $5.04 million in fees and $1,083,045.14 in expenses to Class Counsel, along with $7,500 to each class representative.