In Re: MacBook Keyboard Litigation

Background

Plaintiffs brought a consolidated putative class action against Apple, Inc., alleging that MacBook computers used a defective “butterfly” keyboard. The claims included alleged violations of 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.

The court had previously certified a seven-state litigation class and seven state subclasses. After discovery and approximately two years of negotiations assisted by retired judges, the parties reached a settlement. The settlement covered all persons and entities in the United States who purchased one or more qualifying Class Computers for purposes other than resale, subject to stated exclusions including Apple and related persons and entities.

Settlement Terms

Apple will pay $50,000,000 into a common settlement fund without admitting liability. The fund includes attorneys’ fees and costs, notice and administration expenses, and service awards. Class Counsel may seek up to 30% of the fund, or $15,000,000, in attorneys’ fees and no more than $2,000,000 in litigation costs. The agreement also provides for administration costs and service awards of up to $5,000 for each class representative and for the lead plaintiff in a parallel action.

The net fund will be distributed to class members who experienced keyboard problems and received at least one unsuccessful repair. A qualifying person generally must have received a “Topcase Replacement” or “Keycap Replacement” from Apple or an authorized service provider within four years after purchasing the computer. A claimant may submit one claim for each qualifying computer.

The allocation plan creates three groups. Group 1 includes people who received at least two Topcase Replacements and may receive up to $395 per computer without submitting a claim. Group 2 includes people who received one Topcase Replacement and attest that the repair did not resolve the keyboard problem; payments are capped at $125. Group 3 includes people who received one or more Keycap Replacements, but no Topcase Replacement, and attest that the repair did not resolve the problem; payments are capped at $50. Groups 2 and 3 must submit claim forms. No settlement funds will revert to Apple, and class members remain eligible for Apple’s Keyboard Service Program during its four-year coverage period.

Conditional Settlement-Class Certification

For settlement purposes, the court found that the proposed class satisfied Rule 23’s requirements for class certification. The class included approximately 15 million Class Computers, making joinder of all members impracticable. The court identified common questions about whether the butterfly keyboard was defective, whether Apple knew of the alleged defect, and whether Apple had a duty to disclose it. The court also found the representative plaintiffs’ claims typical, found that the representatives and Class Counsel adequately represented the class, and found that common issues predominated and a class action was the superior method for resolving the claims.

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

Preliminary Approval

Under Federal Rule of Civil Procedure 23(e)(2), a court may approve a class settlement after finding that it is fair, reasonable, and adequate. The court found that the proposed settlement fell within the range of possible approval. It considered the extensive discovery, including review of 1.2 million pages of documents, 38 depositions, expert discovery, motion practice, the risks and expense of trial and appeal, the risk of decertification, and the parties’ experience. The court also found no indication of collusion or self-dealing.

The court noted that the $50 million fund represented approximately 9% to 28% of the estimated damages and found that the settlement appeared adequate and equitable among class members. The court therefore granted preliminary approval of the Settlement Agreement. The order did not make the settlement final.

Notice, Claims, Exclusion, and Objections

The court approved amended long-form, email, and postcard notices. Notice was to be sent by email when Apple had a valid address, with postcard notice for people without a valid address or whose emails were undeliverable. The notice would also be published on a settlement website, which would include a toll-free telephone number. The court found the plan reasonably calculated to inform class members about the settlement and their rights to claim payment, object, or exclude themselves.

The settlement administrator was directed to begin distributing notice no later than 25 days after entry of the order, with notice substantially completed by January 6, 2023. Apple was directed to provide class-member contact data by December 2, 2022. Requests for exclusion and objections were due by February 10, 2023. Claim forms for Groups 2 and 3 were due by March 6, 2023.

Class members who did not timely exclude themselves would be bound by the settlement’s terms if final approval were later granted, including its releases and waivers. The court scheduled a fairness and final approval hearing for March 16, 2023, at 9:00 a.m., subject to change without further notice. The court retained jurisdiction over further applications connected with the settlement.

Disposition

The court granted the parties’ motion for preliminary approval of the class action settlement, conditionally certified the nationwide settlement class, approved the notice forms and allocation plan, appointed the settlement administrator, and set deadlines for notice, claims, exclusion, objections, fee applications, and the final approval hearing.