Williamson v. McAfee, Inc.

Filing 114

ORDER GRANTING #98 MOTION FOR FINAL APPROVAL OF CLASS ACTION SETTLEMENT AND #99 MOTION FOR ATTORNEYS' FEES AND COSTS AND FOR SERVICE AWARDS. Signed by Judge Edward J. Davila on 2/3/2017. (ejdlc2S, COURT STAFF) (Filed on 2/3/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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SAM WILLIAMSON, individually and on
behalf of all others similarly situated,

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Plaintiff,

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v.

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United States District Court
Northern District of California

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MCAFEE, INC.,
Defendant.

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SAMANTHA KIRBY, individually and on
behalf of all others similarly situated,

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Case No. 5:14-cv-00158-EJD
ORDER:
GRANTING MOTION FOR FINAL
APPROVAL OF CLASS ACTION
SETTLEMENT; AND
GRANTING MOTION FOR
ATTORNEYS’ FEES AND COSTS AND
FOR SERVICE AWARDS
Re: Dkt. Nos. 98, 99

Plaintiff,
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v.
Case No. 5:14-cv-02475-EJD

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MCAFEE, INC.,

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Re: Dkt. Nos. 69, 70

Defendant.

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Plaintiffs bring claims on behalf of two classes of McAfee customers: (1) those who were
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allegedly overcharged for automatic renewal of McAfee software (the “Auto-Renewal Class”) and
(2) those who purchased software where McAfee advertised a “reference price” (a crossed-out
price shown alongside a discounted purchase price) that was allegedly false (the “Reference Price
Class”). Dkt. No. 42.1 This Court granted preliminary approval of the proposed settlement. Dkt.

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Docket citations refer to Williamson v. McAfee, Case No. 14-cv-158. Another case—Kirby v.
McAfee, Case No. 14-cv-2475—was formally related to Williamson and assigned to this Court on
May 29, 2015.
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Case No.: 5:14-cv-00158-EJD
ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION
SETTLEMENT AND GRANTING MOTION FOR ATTORNEYS’ FEES AND COSTS AND
FOR SERVICE AWARDS

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No. 96. Plaintiffs and class counsel now move for final approval and for attorneys’ fees, costs, and

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service awards. Dkt. Nos. 98 and 99.

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I.

CLASS SETTLEMENT

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Under the settlement, each member of the Auto-Renewal Class receives a “value

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certificate” for $11.50 that can only be used to purchase McAfee or Intel Security products. Dkt.

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No. 98 at 7–9. $11.50 is roughly half of the alleged overcharge. Id. Class members had the option

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to receive $11.50 in cash instead of a certificate if they submitted a form by December 23, 2016.

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Id. Ultimately, 263,261 class members opted for cash, totaling $3,027,501.50. Dkt. No. 111 at 7.

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McAfee also agrees to change its practices regarding pricing and disclosure of autorenewal terms. Dkt. No. 98 at 7–8. Members of the Reference Price Class receive no monetary

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United States District Court
Northern District of California

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benefit. Dkt. No. 98 at 8. This is because Plaintiffs sought injunctive relief, but not monetary

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relief, for the reference price claims. Dkt. No. 42 ¶¶ 150, 160.

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Courts apply heightened scrutiny to “coupon settlements.” 28 U.S.C. § 1712; In re Online

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DVD-Rental Antitrust Litig., 779 F.3d 934, 949 (9th Cir. 2015). But this is not a coupon

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settlement, since class members had the option to receive cash instead of value certificates, even

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though they received certificates by default. Id. at 952 (“the claimants in this case had the option

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of obtaining cash instead of a gift card, undercutting the argument that the settlement forces them

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to buy from the defendant”); CLRB Hanson Indus., LLC v. Weiss & Assocs., PC, 465 F. App’x

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617, 619 (9th Cir. 2012) (“The settlement gives every class member the option to receive its share

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of the settlement proceeds in cash. . . . This is not a ‘coupon settlement’ and therefore does not

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trigger the Class Action Fairness Act of 2005’s limitations on contingent fees awarded in

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connection with such settlements.”).

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Upon review of the settlement terms, the arguments of the parties and class counsel, and

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objections from class members, the Court finds that the settlement is “fair, adequate, and

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reasonable” and should be approved. Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 576 (9th

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Cir. 2004).

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Case No.: 5:14-cv-00158-EJD
ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION
SETTLEMENT AND GRANTING MOTION FOR ATTORNEYS’ FEES AND COSTS AND
FOR SERVICE AWARDS

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II.

ATTORNEYS’ FEES, COSTS, AND SERVICE AWARDS
Class counsel seek $2,321,225.92 in attorneys’ fees, $78,774.08 in costs, and $1,250 in

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service awards for each of the named plaintiffs. Dkt. No. 99 at 7–8, 17. Courts in the Ninth Circuit
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may use either or both of two methods to evaluate requests for attorneys’ fees: the percentage-of-

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the-fund method and the lodestar method. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir.
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1998).
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Under the percentage-of-the-fund method, courts evaluate attorneys’ fees as a percentage

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of the total settlement fund. Id. The guideline is 25%, which courts may adjust depending the
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circumstances of the case. Id.; Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048–49 (9th Cir.
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2002). In this case, the monetary value of the certificates is uncertain. If the certificates are valued
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United States District Court
Northern District of California

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at zero, the requested attorneys’ fees amount to more than three quarters of the settlement fund:
($2.32m in attorneys’ fees) / ($3.03m in cash elections) = 76.6%. However, if the certificates are
valued at 10% of their face value, or $1.50, then the attorneys’ fees are about 26.8% of the
settlement fund, which meets the fairness guidelines: ($2.32m in attorneys’ fees) / (7.53m class

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members × $11.50 × 0.10) = 26.8%. $1.50 is a cautious estimate: the certificates are likely worth
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more to many class members; and if not, the class members were free to choose cash instead. The
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Court finds the requested fees to be reasonable under the percentage-of-the-fund method.
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Under the lodestar method, the lodestar is the number of hours spent on the case
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multiplied by a reasonable hourly rate—so, if one attorney bills 1,000 hours at $100/hour, the
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lodestar is $100,000. Hanlon, 150 F.3d at 1029. The lodestar “may be adjusted upward or

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downward to account for several factors including the quality of the representation, the benefit
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obtained for the class, the complexity and novelty of the issues presented, and the risk of
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nonpayment.” Id. Here, class counsel present a lodestar of $1,601,805.85, based on 2,612.95 hours
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billed. Dkt. No. 99 at 12–13. Counsel ask the Court to multiply the lodestar by roughly 1.449,
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amounting to a total fee award of $2,321,225.92. Based on counsel’s billing records and the

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circumstances of this case, the Court finds the requested fees to be reasonable under the lodestar
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Case No.: 5:14-cv-00158-EJD
ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION
SETTLEMENT AND GRANTING MOTION FOR ATTORNEYS’ FEES AND COSTS AND
FOR SERVICE AWARDS

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method. See Vizcaino, 290 F.3d at 1051 (applying a lodestar multiplier of 3.65 and noting that the

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majority of cases apply a multiplier between 1.0 and 3.0)
Lastly, the Court finds it appropriate to grant class counsel’s requests for $78,774.08 in

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costs and $1,250 in service awards to each named plaintiff.

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III.

CONCLUSION

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The Court orders as follows:

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1.

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Plaintiffs’ and class counsel’s motion for final approval of class settlement is

GRANTED.
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Plaintiffs’ and class counsel’s motion for attorneys’ fees, costs, and service awards

is GRANTED.

United States District Court
Northern District of California

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IT IS SO ORDERED.
Dated: February 3, 2017
______________________________________
EDWARD J. DAVILA
United States District Judge

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Case No.: 5:14-cv-00158-EJD
ORDER GRANTING MOTION FOR FINAL APPROVAL OF CLASS ACTION
SETTLEMENT AND GRANTING MOTION FOR ATTORNEYS’ FEES AND COSTS AND
FOR SERVICE AWARDS