Apple's $310 mln iPhone throttling settlement must be reconsidered - court

Logo of an Apple store is seen in Washington, U.S. REUTERS/Joshua Roberts
  • Panel finds judge applied incorrect standard in signing off on deal
  • Judge also told to reconsider fee award

(Reuters) - A federal judge was ordered Wednesday to reconsider his approval of a $310 million settlement of a class action accusing Apple Inc of slowing down certain iPhones to mask performance issues, including $80.6 million in lawyers' fees.

A unanimous panel of the 9th U.S. Circuit Court of Appeals did not express any view about whether the settlement should ultimately be approved.

However, it found that U.S. District Judge Edward Davila in San Jose, California incorrectly started with a presumption that the settlement was fair while he was considering it. Under earlier 9th Circuit precedent, the panel said, there should be no such presumption for settlements, like that in the iPhone litigation, that were reached before a court has certified a class.

The ruling partly granted objections by some class members to the deal, but overruled most objections. Lawyers for the objectors, the class and for Apple did not immediately respond to requests for comment.

The panel also ruled that Davila should reconsider his decision to count lead lawyers' hours of work in parallel mass tort litigation in California state court, which was also resolved by the settlement, when he set the $80.6 million fee. Some class members had argued that the state court work duplicated work in the federal litigation and should not be counted separately.

The 9th Circuit did not address the merits of the issue, but said that including those hours appeared to contradict another part of Davila's reasoning in setting the fee.

The settlement resolved claims in multidistrict litigation that Apple secretly slowed down, or throttled, the performance of certain iPhone operating systems in order to prevent them from shutting off unexpectedly.

In settling the case, Apple said it had "agreed to put this matter behind it" but did not admit wrongdoing and stood by what it called a performance management feature that "solved a complex technological problem."

The case is In re Apple Inc Device Performance Litigation, 9th U.S. Circuit Court of Appeals, No. 21-15758.

For the prevailing objectors: Kendrick Jan of Jan & Jan

For plaintiffs: Mark Molumphy of Cotchett, Pitre & McCarthy

For Apple: Christopher Chorba of Gibson, Dunn & Crutcher

Read more:

In Apple iPhone class action, plaintiffs' lawyers defend $80 mln fee

Class counsel in Apple ‘throttling’ case beat multifront attack to land $81 million in fees

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Brendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at brendan.pierson@thomsonreuters.com.