Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 1 of 34
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`ALLAN STEYER (Bar No. 100318)
`JILL M. MANNING (Bar No. 178849)
`D. SCOTT MACRAE (Bar No. 104663)
`STEYER LOWENTHAL BOODROOKAS
` ALVAREZ & SMITH LLP
`235 Pine Street, 15th Floor
`San Francisco, CA 94104
`Telephone: (415) 424-3400
`Facsimile: (415) 421-2234
`asteyer@steyerlaw.com
`jmanning@steyerlaw.com
`smacrae@steyerlaw.com
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`CLIFFORD H. PEARSON (Bar. No. 108523)
`DANIEL L. WARSHAW (Bar No. 185365)
`THOMAS J. NOLAN (Bar No. 66992)
`ALEXANDER L. SIMON (Bar No. 305734)
`PEARSON, SIMON & WARSHAW, LLP
`15165 Ventura Boulevard, Suite 400
`Sherman Oaks, CA 91403
`Telephone: (818) 788-8300
`Facsimile: (818) 788-8104
`cpearson@pswlaw.com
`dwarshaw@pswlaw.com
`tnolan@pswlaw.com
`asimon@pswlaw.com
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`Counsel for Plaintiffs and the Class
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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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`CHRISTINA GRACE and KEN POTTER
`Individually and on Behalf of All Others
`Similarly Situated,
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`Plaintiffs,
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`vs.
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`APPLE INC.,
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`Defendant.
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` CASE NO. 5:17-cv-00551-LHK-NC
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`CLASS ACTION
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`NOTICE OF MOTION AND MOTION
`FOR PRELIMINARY APPROVAL OF
`CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND
`AUTHORITIES IN SUPPORT THEREOF
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`Date: September 3, 2020
`Time: 1:30 p.m.
`Courtroom: 8, 4th Floor
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`926662.8
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`Case No. 5:17-cv-00551-LHK-NC
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`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 2 of 34
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`TO ALL PARTIES AND THEIR RESPECTIVE ATTORNEYS OF RECORD:
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`PLEASE TAKE NOTICE that on September 3, 2020, at 1:30 p.m., or as soon thereafter as
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`the matter may be heard in the Courtroom of the Honorable Lucy H. Koh, United States District
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`Court, Northern District of California, San Jose Division, 280 South 1st Street, San Jose, CA 95113,
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`Plaintiffs Christina Grace and Ken Potter (“Plaintiffs”) will and hereby do move the Court, pursuant
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`to Federal Rule of Civil Procedure 23(e), for the entry of an Order:
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`1.
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`Preliminarily approving the Settlement Agreement between Plaintiffs and Defendant
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`Apple Inc. (“Apple”);
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`2.
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`Approving the form, manner, and content of the notice for the proposed settlement
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`to the Class;
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`3.
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`Appointing Epiq Systems, Inc. as the Settlement Administrator;
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`Appointing Jill M. Manning, Daniel L. Warshaw, David F.E. Tejtel, and John Austin
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`Curry as Class Counsel on behalf of their firms;
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`5.
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`Setting a Fairness Hearing date and briefing schedule for final approval of the
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`Settlement and consideration of Class Counsel’s fee application; and
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`6.
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`Finding Apple has started the process of complying with 28 U.S.C. § 1715(b).
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`The grounds for this motion are that the proposed settlement is within the necessary range
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`of reasonableness to justify granting preliminary approval pursuant to Rule 23(e). This motion is
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`based upon this Notice of Motion and Motion for Preliminary Approval of Class Action Settlement,
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`the Memorandum of Points and Authorities, the Declaration of Daniel L. Warshaw filed herewith,
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`the pleading and papers on file in this action, and such oral argument and documentary evidence as
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`may be presented at the hearing on this motion.
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
`2
`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 3 of 34
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`TABLE OF CONTENTS
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`I.
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`INTRODUCTION ..................................................................................................................1
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`II.
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`BACKGROUND ....................................................................................................................2
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`A.
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`B.
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`C.
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`D.
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`Plaintiffs’ Claims ........................................................................................................2
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`Procedural History ......................................................................................................2
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`Mediation and Settlement ...........................................................................................3
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`Monetary Remedies ....................................................................................................4
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`III.
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`SUMMARY OF THE SETTLEMENT ..................................................................................4
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`A.
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`B.
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`C.
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`Monetary Relief ..........................................................................................................5
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`Narrowly Tailored Release .........................................................................................6
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`Cost of Settlement Administration and Class Notice .................................................6
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`IV.
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`THE COURT SHOULD PRELIMINARILY APPROVE THE SETTLEMENT .................7
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`A.
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`Standard for Preliminary Approval ............................................................................7
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`B.
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`The Settlement Provides Substantial Relief to the Class and is Well Within
`the Range of Reasonableness .....................................................................................8
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`6.
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`7.
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`8.
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`The Strength of Plaintiffs’ Case Compared to the Risk, Expense,
`Complexity, and Likely Duration of Further Litigation .................................9
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`The Amount Offered in Settlement ..............................................................10
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`The Risk of Maintaining Class Action Status Through Trial .......................12
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`The Extent of Discovery Completed and the Stage of the
`Proceedings ..................................................................................................13
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`The Experience and Views of Counsel ........................................................15
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`The Presence of a Government Participant ..................................................16
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`The Reaction of the Class Members to the Proposed Settlement.................16
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`Other Factors ................................................................................................16
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`Comparable Cases ........................................................................................17
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`C.
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`The Rule 23(e)(2) Factors Are Met ..........................................................................18
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`1.
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`The Class Representatives and Class Counsel have Vigorously
`Represented the Class ...................................................................................18
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
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`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 4 of 34
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`2.
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`3.
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`4.
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`The Class Representatives’ Interests are Aligned with and are Not
`Antagonistic to the Other Class Members’ Interests. ...................................19
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`The Settlement was Negotiated at Arm’s-Length ........................................19
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`The Relief Provided for the Class is Adequate. ...........................................19
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`V.
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`BECAUSE THE COURT ALREADY CERTIFIED THE CLASS, IT NEED NOT
`UNDERTAKE A RULE 23 ANALYSIS ............................................................................20
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`VI.
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`THE SETTLEMENT PROVIDES PROPER NOTICE TO THE CLASS ..........................20
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`VII. ATTORNEYS’ FEES, COSTS, AND INCENTIVE AWARDS .........................................21
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`1.
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`3.
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`“Percentage-of-the-Fund” Method ...............................................................22
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`Lodestar Cross-Check ..................................................................................22
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`Incentive Awards ..........................................................................................23
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`VIII. THE COURT SHOULD SET A FINAL APPROVAL HEARING SCHEDULE ...............24
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`IX.
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`CONCLUSION ....................................................................................................................25
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
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`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 5 of 34
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`Cases
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`TABLE OF AUTHORITIES
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`Page(s)
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`Amchem Prod., Inc. v. Windsor,
`521 U.S. 591 (1997) ................................................................................................................ 20
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`In re Anthem, Inc. Data Breach Litig.,
`327 F.R.D. 299 (N.D. Cal. 2018) ...................................................................................... 12, 15
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`In re Anthem, Inc. Data Breach Litig.,
`No. 15-MD-02617-LHK, 2018 WL 3960068 (N.D. Cal. Aug. 17, 2018) .............................. 23
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`Arelvarez v. Farmers Ins. Exch.,
`No. 3:14-CV-00574-WHO, 2017 WL 2214585 (N.D. Cal. Jan. 18, 2017) ............................ 23
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`Bellinghausen v. Tractor Supply Co.,
`306 F.R.D. 245 (N.D. Cal. 2015) ............................................................................................ 23
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`Betancourt v. Advantage Human Resourcing, Inc.,
`No. 14-CV-01788-JST, 2016 WL 344532 (N.D. Cal. Jan. 28, 2016) ..................................... 12
`
`In re Bluetooth Headset Prod. Liab. Litig.,
`654 F.3d 935 (9th Cir. 2011) ................................................................................................... 22
`
`In Re Carrier IQ, Inc. Consumer Privacy Litig.,
`Case No. 3:12-md-02330-EMC (N.D. Cal.) ........................................................................... 17
`
`In re Cathode Ray Tube (CRT) Antitrust Litig.,
`2016 WL 721680 (N.D. Cal. Jan. 28, 2016) ........................................................................... 22
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`Churchill Vill., L.L.C. v. Gen. Elec.,
`361 F.3d 566 (9th Cir. 2004) ................................................................................................. 7, 8
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`Class Plaintiffs v. City of Seattle,
`955 F.2d 1268 (9th Cir. 1992) ............................................................................................. 7, 15
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`Dickey v. Advanced Micro Devices, Inc.,
`No. 15-CV-04922-HSG, 2020 WL 870928 (N.D. Cal. Feb. 21, 2020) .................................. 11
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`Glass v. UBS Fin. Servs., Inc.,
`No. C-06-4068 MMC, 2007 WL 221862 (N.D. Cal. Jan. 26, 2007) ................................ 10, 16
`
`In re Google LLC St. View Elec. Commc'ns Litig.,
`No. 10-MD-02184-CRB, 2020 WL 1288377 (N.D. Cal. Mar. 18, 2020) ............................... 11
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`Gross v. Symantec Corp.,
`No. 3:12-CV-00154-CRB, 2014 WL 12641996 (N.D. Cal. Mar. 21, 2014) .......................... 11
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
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`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 6 of 34
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`Hanlon v. Chrysler Corp.,
`150 F.3d 1011 (9th Cir. 1998) ............................................................................................. 8, 10
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`Hendricks v. Starkist Co.,
`No. 13- 00729, 2016 WL 5462423 (N.D. Cal. Sept. 29, 2016) .............................................. 21
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`Hickcox-Huffman v. US Airways, Inc.,
`No. 10-CV-05193-VKD, 2019 WL 1571877 (N.D. Cal. Apr. 11, 2019) ............................... 23
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`In re High-Tech Employee Antitrust Litig.,
`2015 WL 5158730 (N.D. Cal. Sept. 2, 2015) .......................................................................... 22
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`Larsen v. Trader Joe’s Co.,
`No. 11-cv-05188-WHO, 2014 WL 3404531 (N.D. Cal. July 11, 2014) ................................. 16
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`Lehman v. Transbay Joint Powers Authority,
`Case No. CGC-16-553758 (San Francisco Sup. Ct.) ................................................................ 6
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`In re Mercury Interactive Corp. Sec. Litig.,
`618 F.3d 988 (9th Cir. 2010) ................................................................................................... 23
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`Mullane v. Cen. Hanover Bank & Trust Co.,
`339 U.S. 306 (1950) ................................................................................................................ 20
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`Nat’l Rural Telecomms. Coop. v. DIRECTV, Inc.,
`221 F.R.D. 523 (C.D. Cal. 2004) ............................................................................................ 10
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`Officers for Justice v. Civil Serv. Comm’n,
`688 F.2d 615 (9th Cir. 1982) ................................................................................................. 7, 8
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`In re Pac. Enters. Sec. Litig.,
`47 F.3d 373 (9th Cir. 1995) ..................................................................................................... 15
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`Perez v. Asurion Corp.,
`501 F. Supp. 2d 1360 (S.D. Fla. 2007) .................................................................................... 13
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`Pierce v. Rosetta Stone, Ltd.,
`No. C 11-01283 SBA, 2013 WL 5402120 (N.D. Cal. Sept. 26, 2013) ................................... 13
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`Ramirez v. TransUnion LLC,
`951 F.3d 1008 (9th Cir. 2020) ................................................................................................. 13
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`Rodriguez v. W. Publ’g Corp.,
`563 F.3d 948 (9th Cir. 2009) ....................................................................................... 10, 12, 22
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`Schneider v. Chipotle Mexican Grill, Inc.,
`No. 16-CV-02200-HSG, 2020 WL 511953 (N.D. Cal. Jan. 31, 2020) ................................... 12
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`Six Mexican Workers v. Ariz. Citrus Growers,
`904 F.2d 1301 (9th Cir. 1990) ................................................................................................. 21
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
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`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Stovall-Gusman v. W.W. Granger, Inc.,
`No. 13-CV-02540-HSG, 2015 WL 3776765 (N.D. Cal. June 17, 2015) ................................ 12
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`In re Syncor ERISA Litig.,
`516 F.3d 1095 (9th Cir. 2008) ................................................................................................... 7
`
`In re Tableware Antitrust Litig.,
`484 F. Supp. 2d 1078 (N.D. Cal. 2007) .................................................................................... 7
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`Torrisi v. Tucson Elec. Power Co.,
`8 F.3d 1370 (9th Cir. 1993) ....................................................................................................... 8
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`Vasquez v. Coast Valley Roofing, Inc.,
`670 F. Supp. 2d 1114 (E.D. Cal. 2009) ..................................................................................... 7
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`Vizcaino v. Microsoft Corp.,
`290 F.3d 1043 (9th Cir. 2002) ........................................................................................... 21, 22
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`In re Yahoo Mail Litig.,
`No. 13-CV-4980-LHK, 2016 WL 4474612 (N.D. Cal. Aug. 25, 2016) ................................. 22
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`Statutes & Rules
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`28 U.S.C. § 1715(b) ............................................................................................................ 2, 16, 21
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`Fed. R. Civ. P. 23(c)(2)(B) ...................................................................................................... 20, 21
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`Fed. R. Civ. P. 23(e) ........................................................................................................................ 7
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`Fed. R. Civ. P. 23(e)(1) ................................................................................................................. 20
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`Fed. R. Civ. P. 23(e)(1)(B) ............................................................................................................ 20
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`Fed. R. Civ. P. 23(e)(2) ................................................................................................................. 18
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`Fed. R. Civ. P. 23(e)(2)(B) ............................................................................................................ 15
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`Fed. R. Civ. P. 23(e)(2)(C) ............................................................................................................ 19
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`Fed. R. Civ. P. 23(e)(3) ................................................................................................................. 19
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`Fed. R. Civ. P. 23(f) .............................................................................................................. 2, 3, 13
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`Fed. R. Civ. P. 23(h) ...................................................................................................................... 21
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`Fed. R. Civ. P. 30(a)(2) ................................................................................................................. 14
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`Other Authorities
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`4 Newberg on Class Actions § 13:15 (5th ed.) ............................................................................... 7
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
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`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 8 of 34
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`4 Newberg on Class Actions § 13.45 (5th ed.) .............................................................................. 15
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`Moore’s Fed. Prac. § 23.165 (3d ed. 2009) ..................................................................................... 8
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
`vi
`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 9 of 34
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`MEMORANDUM OF POINTS AND AUTHORITIES
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`I.
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`INTRODUCTION
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`After over three years of hard-fought litigation, Plaintiffs and Apple Inc. (“Apple”) have
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`reached agreement to resolve this action (the “Action”) on a class-wide basis. The Settlement was
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`reached after not only aggressive litigation but also extensive arm’s-length negotiations—including
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`four in-person mediation sessions with an experienced mediator and a United States District Court
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`Magistrate Judge, and substantial additional negotiations. The final settlement was reached after a
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`mediator’s proposal crafted by a Magistrate Judge. The settlement provides significant monetary
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`relief to all Class Members.
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`Under the terms of the proposed settlement, Apple will fund an $18 million non-reversionary
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`Settlement Fund.1 After subtracting from the Settlement Fund the costs of notice and claims
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`administration, attorney’s fees and expenses, and incentive awards, the proceeds of the fund will be
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`distributed automatically by electronic and paper checks. Settlement Class Members2 will not need
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`to submit a claim in order to receive payment.
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`The proposed settlement is fair, reasonable and adequate and meets all requirements for
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`preliminary approval. Absent a settlement, the Class would be subject to the risk of uncertainty at
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`trial and on appeal, and would incur additional expenses through further litigation. Plaintiffs
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`respectfully request that the Court preliminarily approve the Settlement Agreement, attached as
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`Exhibit 1 to the Declaration of Daniel L. Warshaw in Support of Motion for Preliminary Approval
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`of Class Action Settlement (“Warshaw Decl.”), and enter an order that:
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`1.
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`Preliminarily approves the Settlement Agreement between Plaintiffs and Defendant
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`Apple;
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`2.
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`Approves the form, manner, and content of the notice for the proposed settlement to
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`1 All terms referenced herein are defined in the Settlement Agreement.
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`2 “Settlement Class Members” are the persons identified in Apple’s records as Class Members
`because they owned an iPhone 4 or 4S device that was running on iOS 6 or an earlier version of
`iOS on April 16, 2014 in California.
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`930238.2
`
`Case No. 5:17-cv-00551-LHK-NC
`1
`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`

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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 10 of 34
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`the Class;
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`3.
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`4.
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`Appoints Epiq Systems, Inc. (“Epiq”) as the Settlement Administrator;
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`Appoints Jill M. Manning, Daniel L. Warshaw, David F.E. Tejtel, and John Austin
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`Curry as Class Counsel on behalf of their firms;
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`5.
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`Sets a Fairness Hearing date and briefing schedule for final approval of the
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`Settlement and consideration of Class Counsel’s fee application; and
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`6.
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`Finds Apple has started the process of complying with 28 U.S.C. § 1715(b).
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`II.
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`BACKGROUND
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`A.
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`Plaintiffs’ Claims
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`Plaintiff Christina Grace filed this Action on February 2, 2017, and filed the Amended
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`Complaint adding Plaintiff Ken Potter on April 5, 2017. The Amended Complaint alleges “a
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`consumer class action brought by Plaintiffs on behalf of themselves and all others similarly situated
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`who owned an Apple iPhone 4 or iPhone 4S that was operating on iOS 6 or an earlier operating
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`system, and therefore lost the ability to use Apple’s ‘FaceTime’ video conferencing feature when
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`Apple intentionally broke FaceTime for iOS 6 and earlier operating systems on April 16, 2014.”
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`Dkt. No. 36. Plaintiffs assert two causes of action: trespass to chattels under California law, and
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`violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. (the
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`“UCL”). Id. Plaintiffs’ Amended Complaint seeks damages, restitution, and injunctive relief. Id.
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`Apple denies the allegations.
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`B.
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`Procedural History
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`The parties vigorously litigated this case. As set forth in greater detail below, the parties
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`engaged in significant motion practice, including a motion to dismiss, a motion for class
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`certification, a Rule 23(f) petition, 12 discovery motions, a summary judgment motion, 6 motions
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`in limine and a Daubert motion to exclude the testimony and opinions of Plaintiffs’ two experts.
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`The parties also engaged in extensive discovery, including 78 requests for production of documents,
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`68 interrogatories, 350 requests for admission, production of 224,693 documents, review of
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`databases produced in discovery that contained millions of records, review of Apple’s source code,
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`17 depositions, forensic imaging of the Class Representatives’ three iPhone devices, 7 expert
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
`2
`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`

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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 11 of 34
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`reports, and numerous non-party document requests and deposition subpoenas.
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`On July 28, 2017, the Court denied Apple’s Motion to Dismiss the Amended Complaint.
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`Dkt. No. 65. On September 19, 2018, the Court issued a Class Certification Order certifying a class
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`pursuant to Fed. R. Civ. P. 23(b)(3) defined as “[a]ll owners of non-jailbroken Apple iPhone 4 or
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`Apple iPhone 4S devices in California who on April 16, 2014, had iOS 6 or earlier operating systems
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`on their iPhone 4 or iPhone 4S devices.” Dkt. No. 269. The Court denied certification of a
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`nationwide class and did not certify an injunctive relief class under the UCL. Id. On November 6,
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`2018, Plaintiffs filed a petition pursuant to Fed. R. Civ. P. 23(f) seeking permission to appeal the
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`Court’s denial of certification of a nationwide class. Dkt. No. 290. On March 20, 2019, the Ninth
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`Circuit denied permission to appeal. Dkt. No. 295. On August 21, 2019, the Court denied Apple’s
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`Summary Judgment Motion. Dkt. No. 306. On April 29, 2019 the Court set the case for trial on
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`April 6, 2020; however, the trial date was vacated pursuant to General Order No. 72. Dkt. Nos. 301,
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`410.
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`C. Mediation and Settlement
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`On November 9, 2018, the parties attended an all-day mediation session before the
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`Honorable William J. Cahill (Ret.), at JAMS in San Francisco. Warshaw Decl., ¶ 4. The parties
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`were unable to reach a settlement. Id. After denying Apple’s motion for summary judgment, the
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`Court ordered the parties to return to mediation. On October 22, 2019, the parties returned to JAMS
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`for a mediation before Judge Cahill but were again unable to reach agreement on all terms of a
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`settlement. Id., ¶ 5. After the second mediation, Judge Cahill engaged in extensive settlement
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`discussions with each party but ultimately a settlement was not reached. Id., ¶ 6. As the litigation
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`progressed closer to trial, the Court ordered the Parties to attend a settlement conference before the
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`Honorable Nathanael Cousins. Dkt. No. 325. On December 5, 2019, Magistrate Judge Cousins
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`held an all-day settlement conference, but the parties were unable to resolve the case. Warshaw
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`Decl., ¶ 7. After extensive follow-up discussions, the parties attended a second in-person settlement
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`conference with Magistrate Judge Cousins on January 16, 2020, which also failed to result in a
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`settlement. Id., ¶ 8. Magistrate Judge Cousins continued conferring with the parties and, on January
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`31, 2020, made a mediator’s proposal. Id., ¶ 9. On February 6. 2020, Magistrate Judge Cousins
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
`3
`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`

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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 12 of 34
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`informed the parties that both parties had accepted the mediator’s proposal. Id., ¶ 10.
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`D. Monetary Remedies
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`Plaintiffs seek damages and restitution on a class-wide basis for the diminution in value of
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`their iPhone 4 and 4S devices caused by the FaceTime Break.3 Plaintiffs retained Dr. Justine S.
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`Hastings, Ph.D., to calculate aggregate class-wide damages measured by the diminution in value of
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`Class Members’ iPhone 4 and 4S devices caused by the FaceTime Break. Dr. Hastings constructed
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`an econometric damages model using transactional data produced by third-party resellers of smart
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`phone devices. Dr. Hastings used multivariate regression analysis to compare smart phone prices
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`during the time period affected by the FaceTime Break to prices during the time when the market
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`was unaffected. Dkt. No. 174. The model produced an estimate of the impact of the FaceTime
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`Break on prices of used iPhone 4 and 4S models and concluded that Apple’s conduct impacted the
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`prices by, on average, $18.30 per device. The Court accepted Plaintiffs’ damages model in its order
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`on class certification and in its order denying summary judgment. Dkt. Nos. 269, 306.
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`Apple vigorously contests Plaintiffs’ damages model and contends that Dr. Hastings inflated
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`damages by focusing on the “B to B” market rather than the consumer market. Apple filed a Daubert
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`motion seeking to exclude Dr. Hastings’ testimony and reports from the Action. Dkt. No. 333. The
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`Court has not ruled on that motion.
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`III.
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`SUMMARY OF THE SETTLEMENT
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`The Settlement Agreement provides for relief to the following Class Members:
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`All owners of non-jailbroken Apple iPhone 4 or Apple iPhone 4S
`devices who on April 16, 2014, had iOS 6 or earlier operating systems
`on their iPhone 4 or iPhone 4S devices, and who were in California at
`that time.
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`The Class includes4 approximately 3,600,000 devices (prior to additional data analysis that
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`3 The “FaceTime Break” refers to the April 16, 2014 expiration of the certificate that allowed the
`FaceTime feature to function on iPhone 4 and 4S devices running on iOS 6 or an earlier version.
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`4 The Class excludes (a) directors, officers, and employees of Apple or its subsidiaries and
`affiliated companies; (b) the Court and the Court’s staff, as well as any appellate court to which
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`930238.2
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`Case No. 5:17-cv-00551-LHK-NC
`4
`NOTICE OF MOTION AND MOTION FOR PRELIMINARY APPROVAL OF CLASS ACTION SETTLEMENT;
`MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF
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`Case 5:17-cv-00551-LHK Document 414 Filed 04/27/20 Page 13 of 34
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`may remove some records without valid contact information, or records indicating fraudulent
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`accounts) that were affected by the FaceTime Break and whose owners are members of the class
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`certified by the Court. Dkt. No. 269. Because there is no way, using available records, to verify if
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`a user has jailbroken their phone, the Settlement Agreement provides that otherwise-qualifying
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`iPhone devices will be presumed to be non-jailbroken unless it can be determined through existing
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`records that they are jailbroken. Thus, payment will inevitably be made to a small but indeterminate
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`number of individuals who have jailbroken their iPhone 4 or iPhone 4S devices. The relevant expert
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`testimony in the Action indicates that the number of Settlement Class Members with jailbroken
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`phones is very low.
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`A. Monetary Relief
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`Pursuant to the Settlement Agreement, the Settlement Administrator will provide payment
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`to Settlement Class Members by electronic or paper checks. The Settlement Administrator will send
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`the checks by email to those Settlement Class Members for whom Apple has email addresses,
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`estimated to be over 90% of the Settlement Class, and by mail to those Settlement Class Members
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`for whom Apple has only physical addresses. Settlement Agreement, ¶ 2.5. Wh