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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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 SAM WILLIAMSON, individually and on behalf of all others similarly situated, 8 Plaintiff, 9 v. 11 United States District Court Northern District of California 10 MCAFEE, INC., Defendant. 12 13 SAMANTHA KIRBY, individually and on behalf of all others similarly situated, 14 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, 15 v. Case No. 5:14-cv-02475-EJD 16 MCAFEE, INC., 17 Re: Dkt. Nos. 69, 70 Defendant. 18 19 Plaintiffs bring claims on behalf of two classes of McAfee customers: (1) those who were 20 21 22 23 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. 24 25 26 27 28 1 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. 1 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 1 No. 96. Plaintiffs and class counsel now move for final approval and for attorneys’ fees, costs, and 2 service awards. Dkt. Nos. 98 and 99. 3 I. CLASS SETTLEMENT 4 Under the settlement, each member of the Auto-Renewal Class receives a “value 5 certificate” for $11.50 that can only be used to purchase McAfee or Intel Security products. Dkt. 6 No. 98 at 7–9. $11.50 is roughly half of the alleged overcharge. Id. Class members had the option 7 to receive $11.50 in cash instead of a certificate if they submitted a form by December 23, 2016. 8 Id. Ultimately, 263,261 class members opted for cash, totaling $3,027,501.50. Dkt. No. 111 at 7. 9 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 11 United States District Court Northern District of California 10 benefit. Dkt. No. 98 at 8. This is because Plaintiffs sought injunctive relief, but not monetary 12 relief, for the reference price claims. Dkt. No. 42 ¶¶ 150, 160. 13 Courts apply heightened scrutiny to “coupon settlements.” 28 U.S.C. § 1712; In re Online 14 DVD-Rental Antitrust Litig., 779 F.3d 934, 949 (9th Cir. 2015). But this is not a coupon 15 settlement, since class members had the option to receive cash instead of value certificates, even 16 though they received certificates by default. Id. at 952 (“the claimants in this case had the option 17 of obtaining cash instead of a gift card, undercutting the argument that the settlement forces them 18 to buy from the defendant”); CLRB Hanson Indus., LLC v. Weiss & Assocs., PC, 465 F. App’x 19 617, 619 (9th Cir. 2012) (“The settlement gives every class member the option to receive its share 20 of the settlement proceeds in cash. . . . This is not a ‘coupon settlement’ and therefore does not 21 trigger the Class Action Fairness Act of 2005’s limitations on contingent fees awarded in 22 connection with such settlements.”). 23 Upon review of the settlement terms, the arguments of the parties and class counsel, and 24 objections from class members, the Court finds that the settlement is “fair, adequate, and 25 reasonable” and should be approved. Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566, 576 (9th 26 Cir. 2004). 27 2 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 28 1 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 2 service awards for each of the named plaintiffs. Dkt. No. 99 at 7–8, 17. Courts in the Ninth Circuit 3 may use either or both of two methods to evaluate requests for attorneys’ fees: the percentage-of- 4 the-fund method and the lodestar method. Hanlon v. Chrysler Corp., 150 F.3d 1011, 1029 (9th Cir. 5 1998). 6 Under the percentage-of-the-fund method, courts evaluate attorneys’ fees as a percentage 7 of the total settlement fund. Id. The guideline is 25%, which courts may adjust depending the 8 circumstances of the case. Id.; Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048–49 (9th Cir. 9 2002). In this case, the monetary value of the certificates is uncertain. If the certificates are valued 10 United States District Court Northern District of California 11 12 13 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 14 members × $11.50 × 0.10) = 26.8%. $1.50 is a cautious estimate: the certificates are likely worth 15 more to many class members; and if not, the class members were free to choose cash instead. The 16 Court finds the requested fees to be reasonable under the percentage-of-the-fund method. 17 Under the lodestar method, the lodestar is the number of hours spent on the case 18 multiplied by a reasonable hourly rate—so, if one attorney bills 1,000 hours at $100/hour, the 19 lodestar is $100,000. Hanlon, 150 F.3d at 1029. The lodestar “may be adjusted upward or 20 downward to account for several factors including the quality of the representation, the benefit 21 obtained for the class, the complexity and novelty of the issues presented, and the risk of 22 nonpayment.” Id. Here, class counsel present a lodestar of $1,601,805.85, based on 2,612.95 hours 23 billed. Dkt. No. 99 at 12–13. Counsel ask the Court to multiply the lodestar by roughly 1.449, 24 amounting to a total fee award of $2,321,225.92. Based on counsel’s billing records and the 25 circumstances of this case, the Court finds the requested fees to be reasonable under the lodestar 26 27 28 3 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 1 method. See Vizcaino, 290 F.3d at 1051 (applying a lodestar multiplier of 3.65 and noting that the 2 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 3 4 costs and $1,250 in service awards to each named plaintiff. 5 III. CONCLUSION 6 The Court orders as follows: 7 1. 8 9 10 Plaintiffs’ and class counsel’s motion for final approval of class settlement is GRANTED. 2. Plaintiffs’ and class counsel’s motion for attorneys’ fees, costs, and service awards is GRANTED. United States District Court Northern District of California 11 12 13 14 15 IT IS SO ORDERED. Dated: February 3, 2017 ______________________________________ EDWARD J. DAVILA United States District Judge 16 17 18 19 20 21 22 23 24 25 26 27 28 4 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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