SAN FRANCISCO (Legal Newsline) - The U.S. Court of Appeals for the Ninth Circuit has vacated a lower court's approval of a class action settlement over Apple MagSafe power adapters on Thursday.
The Ninth Circuit decided that the $3 million in attorneys fees included in the deal had not been cross-checked thoroughly by the lower court and, because of that, the lower court lacked "a sufficient basis for determining the reasonableness of the award," the opinion stated.
"The district court's order accepted the lodestar of $1,986,362.00 submitted by plaintiffs' counsel," the court ruled.
"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."
Approval of the settlement was appealed by the Center for Class Action Fairness, which was founded by Ted Frank.
Under some circumstances, counting all hours expended on the litigation-even those reasonably spent-may produce an "excessive amount," according to the memo.
"The district court then applied a multiplier that increased the total amount of the attorneys' fee award to $3,000,000 without explaining why a multiplier was necessary to adequately compensate class counsel," the opinion stated.
"If the court determines on remand that a multiplier is appropriate, it should offer an explanation of its decision that is sufficient to 'assure itself - and us - that the amount awarded was not unreasonably excessive in light of the results achieved.'"
The appeals court emphasized that Apple's advance agreement to pay class counsel up to $3 million in attorneys fees and $100,000 in expenses "cannot relieve the district court of its duty to assess fully the reasonableness of the fee request," according to the opinion.
The district court also did not cross-check the attorneys fee award against the percentage-of-the-recovery method, the opinion states.
"Although we have 'encouraged' rather than required courts to cross-check their calculations, the fact that the court made no mention of the value of the settlement, let alone the percentage-of-the-recovery method, contributes to our determination that we 'lack a sufficient basis for determining the reasonableness of the award,'" the court said.
If the class action settlement agreement had been left in place, it would have been the settlement of two lawsuits filed against Apple, both of which claimed that 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, according to court documents.
The lawsuits were first filed in 2009 in the U.S. District Court for the Northern District of California.
The plaintiffs alleged the flawed power adapters were dangerous fire hazards that prematurely failed.
The plaintiffs claimed 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.
The plaintiffs are being 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 of Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor LLP; and Patrick McNicholas and Douglas D. Winter of McNicholas & McNicholas.
Apple is being represented by Anne M. Hunter, Alexei Klestoff, Heather A. Moser, Andrew David Muhlbach and Penelope Athene Preovolos of Morrison & Foerster LLP.
The original Apple class action settlement was approved in March 2012.
U.S. Court of Appeals for the Ninth Circuit case numbers: 12-15757, 12-15782
From Legal Newsline: Kyla Asbury can be reached at email@example.com.