Smartphone Consumers Seek Approval of $9M Class Action Settlement

Consumers in a privacy class action lawsuit against several tablet and smartphone makers are urging a California federal court to accept a settlement that would resolve allegations that the companies installed wiretapping software on mobile devices.

Plaintiffs told U.S. District Judge Edward Chen to grant final approval of the deal that calls for Samsung, HTC, Carrier iQ and other smartphone manufacturers to pay $9 million to settle claims.

If approved, the settlement would end a lengthy battle over whether the data collection software Carrier iQ developed and installed in devices used by Samsung and HTC violated smartphone users’ privacy.

Allegations of privacy violations first surfaced in November 2011, when a researcher posted a video that appeared to show keystroke logging. The report led to numerous class action lawsuits against smartphone makers Carrier iQ as well as Samsung, HTC, Motorola, Pantech, LG Electronics, and Huawai. The cases were consolidated in front of Judge Chen in 2012.

Carrier iQ acknowledged that its software sometimes logs the contents of messages, but said that the data isn’t readable. The company also stated its software was intended to help smartphone carriers discover the source of network problems, like dropped calls.

In July 2014, the smartphone companies motioned to dismiss the consolidated cases, with Judge Chen granting partial dismissal of certain claims. At that time, both sides agreed to enter into mediation.

These negotiations proved to be hard-fought but eventually the parties came to an agreement last summer. By January 2016, the terms were ironed out and the court was notified of the agreed upon proposed $9 million settlement.

The proposed nationwide settlement provides smartphone consumers to receive a portion of the $9 million fund, contingent on how many of the estimated 79 million Class Members submit claims.

According to the plaintiffs’ motion to grant the settlement, each qualified Class Member will receive a $149 cash payment, service awards of $5,000 will be awarded to the 17 named plaintiffs and plaintiffs’ attorneys will received 25 percent fees (around $2.25 million) after final approval.

“Because of their history with this matter, and their experience, plaintiffs’ counsel were well situated to evaluate the strength and weakness of plaintiffs’ case,” the motion for final approval states. “Far from being the product of anything inappropriate, the settlement at issue is the result of long, hard-fought and adversarial work, such that it is worthy of final approval by the court.”

Under the terms of the proposed smartphone privacy settlement, if so many people submit claims that the payout would be less than $4 per person, no Class Members will receive any money. Instead, the fund will go to three outside organizations — the Electronic Frontier Foundation, the Center for Democracy and Technology, and CyLab Usable Privacy and Security Laboratory at Carnegie Mellon University.

Initial analysis estimated the nationwide settlement Class to consist of some 79 million members – though this approximation is equal to the approximate number of covered smartphone devices. However, statistically the number of unique individuals in the Class is presently estimated to be 30 million.

Any Class Member who wished to be excluded from the settlement needed to submit a request to do so by June 4 and according to the settlement administrator 57,000 claims have been received. With these current claim numbers, it is estimated that each claimant will receive about $149.

Further, the consumer plaintiffs pushed for Judge Chen to certify the settlement Class, stating that the notification program is a “strong, multi-faceted publication program constructed with expert assistance for maximum reach.” Affected smartphone consumers will be notified through traditional print and intensive, targeted Internet advertising components; a dedicated settlement website; references to that website on the websites of class counsel; a joint press release; and free press as well.

“Given the size of the class, the fact that the parties did not have access to direct contact information for class members, the inability to obtain such information and the projected cost to notify class members directly even if direct contact information were available, the notice program upon which the parties agreed — with expert assistance and endorsement — not only comports with due process, but is the best notice practicable under the circumstances,” according to the motion.

The plaintiffs also asked Judge Chen to accept the terms of the settlement, stating that the settlement further requires Carrier iQ to modify its smartphone data collection software.

“Here, the non-monetary relief gained by the plaintiffs in settlement has value particularly to those many class members who may or will go on to buy a new mobile device onto which Carrier iQ software will be installed,” the plaintiffs say. “This relief provides carriers and manufacturers with the tools to avoid issues such as those that gave rise to the instant case.”

The plaintiffs are represented by Joseph H. Malley, Law Office of Joseph H. Malley, PC, Steve W. Berman and Robert F. Lopez of Hagens Berman Sobol Shapiro LLP and Bruce L. Simon, Daniel L. Warshaw and William J. Newsom of Pearson Simon & Warshaw LLP, and others.

The Samsung Smartphone Privacy Class Action Lawsuit is In re: Carrier IQ Inc. Consumer Privacy Litigation, Case No. 3:12-md-02330, in the U.S. District Court for the Northern District of California.

UPDATE: On Oct. 1, 2018, Top Class Actions viewers started receiving checks from the Smartphone privacy class action settlement worth as much as $417. Congratulations to everyone who file a claim and got PAID!