In Re: MacBook Keyboard Litigation

Background

The plaintiffs filed a consolidated putative class action against Apple concerning an alleged defect in the “butterfly” keyboard used in certain MacBook computers. The second amended complaint asserted claims under California’s Unfair Competition Law, the California Consumer Legal Remedies Act, the Song-Beverly Consumer Warranty Act, and consumer-protection laws in Washington, Florida, Illinois, New Jersey, New York, and Michigan. It also asserted a fraudulent-concealment claim.

The court had previously certified a seven-state litigation class and seven related state subclasses consisting of purchasers of the covered computers. After extensive discovery and motion practice, including depositions, expert discovery, motions to dismiss, class-certification proceedings, and rulings concerning expert testimony, the parties reached a settlement after negotiations assisted by retired judges.

Settlement Terms

Apple agreed to pay $50,000,000 into a common settlement fund without admitting liability. The fund includes attorneys’ fees and litigation costs, notice and settlement-administration expenses, and service awards for class representatives. Plaintiffs’ counsel agreed to seek up to approximately $13,599,113 in fees and no more than $2,000,000 in litigation costs; the court did not finally decide those amounts in this order.

The net fund will be distributed to eligible settlement class members who experienced keyboard problems and received at least one unsuccessful repair. A qualifying repair generally involved a “Topcase Replacement,” meaning replacement of the full keyboard module, or a “Keycap Replacement,” meaning replacement of one or more keycaps, within four years after purchasing the covered computer. Class members may make one claim for each covered computer they purchased, and no settlement funds will revert to Apple.

The proposed settlement divides claimants into three groups:

- Group 1: Members who received at least two Topcase Replacements within four years of purchase. Their payments, capped at $395 per computer, will be automatic based on Apple’s records. - Group 2: Members who received one Topcase Replacement and attest that the repair did not resolve the keyboard problem. Payments are capped at $125 per computer, and a claim form is required. - Group 3: Members who received one or more Keycap Replacements, but no Topcase Replacement, and attest that the repair did not resolve the keyboard problem. Payments are capped at $50 per computer, and a claim form is required.

Class members remain eligible for Apple’s Keyboard Service Program, which provides free keyboard repairs for four years from purchase. Uncashed checks become void after 90 days. The agreement provides for supplemental distributions when practicable and requires the parties to propose how to distribute any remaining funds, potentially through a court-approved charitable distribution, if supplemental payments are not practicable or do not use the remaining money.

Preliminary Class Certification and Settlement Review

For settlement purposes, the court conditionally certified a nationwide class of people and entities in the United States who purchased one or more covered computers other than for resale, with stated exclusions including Apple and certain Apple-related persons and entities, as well as the judges and staff assigned to the litigation and their immediate family members.

The court found that the proposed settlement class met the requirements for class certification under Federal Rule of Civil Procedure 23. It found that the class was sufficiently numerous, that common questions included whether the keyboard was defective and whether Apple knew of the alleged defect and had a duty to disclose it, and that the representative plaintiffs’ claims were typical. The court also found that the representatives and proposed class counsel adequately represented the class and that common issues predominated over individual issues for settlement purposes.

Under Rule 23, a court may preliminarily approve a class settlement when the settlement appears fair, reasonable, and adequate and when there is a sufficient basis to notify class members and schedule a final approval hearing. The court concluded that the proposed settlement fell within the range of possible approval. It considered the risks, costs, and delay of further litigation; the amount offered; the discovery completed; the experience of counsel; the possibility of class decertification; and the absence of indications of collusion or self-dealing.

The court conditionally certified the proposed nationwide settlement class and provisionally appointed Girard Sharp LLP and Chimicles Schwartz Kriner & Donaldson-Smith LLP as class counsel. It also provisionally appointed the named plaintiffs listed in the order as class representatives.

Notice, Claims, Exclusion, and Objection Procedures

The court approved the amended long-form notice, short-form email notice, and short-form postcard notice. Apple’s records showed contact information for more than 95 percent of the settlement class. Eligible members with valid email addresses were to receive email notice; others, or those whose emails were undeliverable, were to receive mailed notice. The settlement administrator was also directed to maintain a settlement website and toll-free telephone number, and Apple was directed to provide notice to government enforcement authorities as required by federal law.

JND Legal Administration was appointed as the settlement administrator. It was directed to begin distributing notice no later than 25 days after entry of the order and to substantially complete notice within 60 days. Apple was directed to provide specified class-member contact data by December 2, 2022.

Class members could request exclusion by February 10, 2023. Those who did not timely exclude themselves would be bound by the settlement’s terms, including its releases, if the settlement later received final approval, whether or not they objected or submitted a claim. Eligible class members who remained in the settlement could object to the settlement, the allocation plan, or the requested attorneys’ fees and service awards by February 10, 2023.

Ruling and Further Proceedings

The court granted the parties’ motion for preliminary approval of the class action settlement. It approved the notice forms and plan, preliminarily approved the allocation plan and claim form, conditionally certified the nationwide settlement class, and provisionally appointed class counsel, class representatives, and the settlement administrator.

The court set March 16, 2023, for a fairness and final approval hearing. At that hearing, the court was to decide whether to grant final approval and consider the separate requests for attorneys’ fees and class-representative awards. This November 28, 2022 order did not grant final approval of the settlement or finally decide the requested fees and awards. The court retained jurisdiction over further applications connected with the settlement.