Norcia v. Samsung Telecommunications America, LLC

Background

This consumer deception class action concerned allegations that Samsung programmed Galaxy S4 smartphones to recognize commonly used benchmarking applications and artificially increase the phones’ central and graphics processing performance while those applications were running. After earlier litigation, including a trial about whether an arbitration agreement was formed and an appeal affirming the denial of arbitration, Daniel Norcia’s remaining claim was under the unfairness provision of California’s Unfair Competition Law, based on alleged omissions about the manipulation.

The proposed settlement class consisted of all people or entities that purchased one or more 16 GB Galaxy S4 smartphones in California from April 2013 through July 2013. The court had previously granted preliminary approval and conditionally certified the class. At final approval, the parties determined that the class contained approximately 367,000 members. The court confirmed the class certification, Daniel Norcia as class representative, and the listed attorneys as class counsel.

Final Settlement Approval

Under Federal Rule of Civil Procedure 23, a class settlement requires court approval after notice and a finding that the settlement is fair, reasonable, and adequate. The court found that the notice plan—including email, publication notices, a settlement website, a toll-free telephone line, and follow-up emails—provided notice in the best practicable manner.

The settlement provides a $2.8 million cash fund financed by Samsung. Class members who submit valid claims may receive up to $10 per claim. Attorneys’ fees, expenses, and the incentive award will be paid from the fund, with the remaining amount distributed to the Samuelson Law, Technology & Public Policy Clinic at the University of California, Berkeley School of Law. The settlement also requires, for three years, confirmation that new Samsung smartphones purchased by Samsung from another entity have not been pre-loaded with software that detects and boosts benchmarking scores.

The court found the negotiations were conducted at arm’s length and that the relief was fair and adequate in light of the reduced claims, shorter settlement class period, risks of continued litigation, and the class members’ potential recovery. Approximately 7,468 claims were submitted, representing about 2.035% of the approximately 367,000 class members. One person requested exclusion, and Steven Helfand filed the only objection.

The court determined that Helfand did not credibly establish that he was a settlement-class member. It overruled his objection for lack of standing—the legal requirement that a person show a sufficient connection to the dispute—and because the points he raised lacked merit.

Attorneys’ Fees

Class counsel requested $1,398,861.24 in fees, relying partly on an asserted total settlement value that included a $10,594,921 valuation of the injunction. The court rejected that valuation and excluded the injunction from the common-fund value used to calculate fees because its benefit to individual class members was not sufficiently measurable. The court also found the submitted information insufficient for a lodestar calculation, which estimates fees by multiplying reasonable hours by reasonable hourly rates.

Instead, the court awarded 30% of the $2.8 million cash fund—$840,000—as attorneys’ fees. The court considered the three-year injunction but found that the case did not produce exceptional results warranting more than 30%.

Costs and Incentive Award

The court granted class counsel’s request for reimbursement of $101,138.76 in litigation expenses. It also awarded the settlement administrator additional costs of up to $155,500.

Class counsel requested a $7,500 incentive award for Daniel Norcia. The court recognized Norcia’s substantial participation, including more than 100 hours assisting counsel and testimony during the arbitration-agreement trial, but found $7,500 excessive compared with the $10 available to other class members. The court awarded Norcia $3,000 instead.

Disposition

Final approval of the class action settlement was granted. The single opt-out was ordered excluded from the settlement, and Helfand’s objection was overruled. The fee, expense, and incentive requests were granted in part, resulting in the awards specified above. The case remained closed, subject to counsel filing a required post-distribution accounting document.