Apple Power Adapter Class Action Settlement Approval Vacated

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The Ninth Circuit Court of Appeals on Thursday vacated a lower court’s approval of a November 2011 class action settlement over defective Apple MagSafe power adapters, saying that the $3 million in attorneys’ fees included in the deal had not been cross-checked thoroughly by the lower court, and therefore the three-judge panel lacks “a sufficient basis for determining the reasonableness of the award.”

“The district court’s order accepted the lodestar of $1,986,362.00 submitted by plaintiffs’ counsel,” read the April 24 memorandum. “But the court did not explain why this figure is reasonable beyond a few boilerplate recitations about the attorneys’ skill and the risks of proceeding with the litigation that never reference the specific facts of this case. Under some circumstances, “counting all hours expended on the litigation—even those reasonably spent—may produce an ‘excessive amount.'”

The panel said that U.S. District Judge James Ware, who approved the Apple power adapter class action settlement, was remiss in considering the fairness of these fees when compared to the amounts awarded the customers. He applied a 1.5x multiplier to the $1,986,362 lodestar, citing the risk and skill required in the case, but did not appropriately detailing the reasons for this multiplier. The original Apple class action settlement was approved in March 2012.

“The discretion rests with the district court,” the opinion said, however, noting that Ware could justify the amount with further work. “We merely require that the court scrutinize both the settlement agreement and fee award and offer a specific explanation about why it deems them reasonable.”

If the Apple class action settlement agreement had been left in place, it would have been the settlement to two class action lawsuits against Apple, both of which had alleged Apple’s MagSafe power adapters were sold with design flaws that caused them to fray, spark and prematurely fail to work. Consumers who had signed up for the Apple MagSafe class action settlement would have collected $79, $50 or $35 for replacement adapters, depending on when consumers purchased the products.

The panel’s decision also vacated an order requiring the objectors, which included The Center for Class Action Fairness, to post $15,000 each in appeal bonds, stating that bonds could not be used to secure attorneys’ expenses.

The Apple class action lawsuits were first filed in 2009, and plaintiffs alleged the flawed power adapters were dangerous fire hazards, and that they failed prematurely. The class action lawsuits claimed that Apple was aware of the problems, but did not disclose or warn consumers about them, and forced consumers to purchase costly replacements upon their failure from Apple. MagSafe was the only plug-in power source for MacBook and MacBook Pro computers, according to the complaint, which accused Apple of violations of California business and consumer law, breach of warranty, negligence and unjust enrichment.

The plaintiffs are represented by Helen I. Zeldes of Zeldes & Haeggquist LLP; Steven A. Skalet and Craig L. Briskin of Mehri & Skalet PLLC; Angela C. Agrusa and Camilla Y. Chan ofLiner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP; and Patrick McNicholas and Douglas D. Winter of McNicholas & McNicholas

The Apple Power Adapter Class Action Settlement cases are In re: Naotaka Kitagawa Jr. et al. v. Robert Gaudet Jr. et al., Case No. 12-15757 and In re: Naotaka Kitagawa Jr. et al. v. Marie Gryphon et al., case number 12-15782, both in the U.S. Court of Appeals for the Ninth Circuit.