Corporacion Nacional de Consumidores Y Usuarios de Chile v. Apple Inc

Background

Conadecus, a private nonprofit organization with its principal place of business in Santiago, Chile, sued Apple on behalf of consumers in Chile. It alleged that Apple failed to tell customers that software updates for certain iPhone models slowed the devices to address a battery defect. The complaint asserted claims for trespass to chattels, unjust enrichment, and fraudulent misrepresentation or omission.

The court later consolidated Conadecus’s action into multidistrict litigation involving Apple’s device-performance issues. Conadecus’s counsel was appointed International Liaison Counsel, with responsibilities that included monitoring related litigation in other countries.

Separately, another Chilean consumer organization, Odecu, sued Apple’s Chilean subsidiary and local authorized distributors in Chile. That case involved the same general iPhone-related allegations and claims under Chilean law. Conadecus did not join or participate in the Chilean case and did not inform the Chilean court about its U.S. action.

The multidistrict litigation later settled claims involving U.S. consumers, but the settlement did not release Conadecus’s claims. Conadecus’s counsel received $417,237 in attorneys’ fees for work as International Liaison Counsel. The separate Chilean case settled in principle in August 2020, and the settlement became final and non-appealable in March 2021. Conadecus’s counsel learned of that settlement afterward and sought additional fees under California Code of Civil Procedure section 1021.5, relying on a “catalyst” theory. Under that theory, fees may be available when a lawsuit motivates defendants to provide the relief sought even without a favorable judgment.

Court’s Analysis

The court explained that section 1021.5 can allow fees to a successful party whose action helps enforce an important right affecting the public interest. When there is no judgment on the merits, the court considers whether the lawsuit accomplished what it sought, whether the lawsuit had some merit, and whether the plaintiff made a reasonable attempt to settle before filing suit. The party seeking fees has the burden of proving these requirements.

The court concluded that Conadecus was not a successful party in the Odecu Action because it was not involved in that case. The court also questioned whether section 1021.5 could apply to a case filed in Chile under Chilean consumer-protection laws that sought relief for Chilean consumers. Conadecus identified no case awarding fees under that statute for a foreign lawsuit that produced no benefit for anyone in California.

The court further concluded that Conadecus was not a successful party in its own U.S. action because that action remained pending. Conadecus intended to continue litigating and had not yet vindicated an important right or obtained relief for Chilean consumers through that action.

The court also rejected Conadecus’s claim that its work in the multidistrict litigation caused the Chilean settlement. Conadecus relied on correspondence with lead counsel from May through August 2020, but Apple’s counsel was not included in that correspondence. Apple’s counsel first interacted with Conadecus’s counsel in late 2020, after Apple and Odecu had already reached a settlement in principle. Odecu also confirmed that it independently reached its settlement without Conadecus’s participation or assistance. The court therefore found no clear causal connection between Conadecus’s conduct and the Chilean settlement.

Finally, the court found that Conadecus had not shown that its action had “some merit” and had not first made a reasonable attempt to settle. The court rejected Conadecus’s argument that attempting to settle would have been futile, noting that Apple agreed to settle with Odecu, which the court described as a similarly situated Chilean consumer organization.

Ruling

Judge Edward J. Davila denied Conadecus’s motion for attorneys’ fees. The court stated that an additional fee award was not warranted because Conadecus’s counsel had already received $417,237 in the multidistrict litigation.