Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 1 of 37 PageID #:3612
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF ILLINOIS
`EASTERN DIVISION
`
`IN RE: TIKTOK, INC., CONSUMER
`PRIVACY LITIGATION
`
`MDL No. 2948:16-cv-08637
`
`Master Docket No. 20-cv-4699
`
`Judge John Z. Lee
`
`This Document Relates to All Cases
`
`Magistrate Judge Sunil R. Harjani
`
`PLAINTIFFS’ MOTION FOR ATTORNEYS’ FEES,
`REIMBURSEMENT OF EXPENSES, AND CLASS
`REPRESENTATIVE SERVICE AWARDS
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 2 of 37 PageID #:3613
`
`TABLE OF CONTENTS
`
`INTRODUCTION .............................................................................................................. 1(cid:3)
`
`CLASS COUNSEL DEDICATED ENORMOUS RESOURCES TO THIS
`MATTER AND FACED SIGNIFICANT RISKS TO SUCCESSFULLY
`RESOLVE THIS CASE WITH DEFENDANTS ............................................................... 3(cid:3)
`
`A.(cid:3)
`
`B.(cid:3)
`
`Class Counsel Dedicated Tremendous Resources to Resolve Plaintiffs’
`Claims. .................................................................................................................... 3(cid:3)
`
`Class Counsel Faced Significant Risk of Nonpayment. ......................................... 7(cid:3)
`
`1.(cid:3)
`
`2.(cid:3)
`
`3.(cid:3)
`
`Class Actions are Inherently Risky. ............................................................ 8(cid:3)
`
`Class Counsel Faced Complex Issues. ........................................................ 8(cid:3)
`
`Defendants Had Substantial Resources for Their Defense. ........................ 9(cid:3)
`
`.(cid:3)
`
`(cid:3)I
`
`II.(cid:3)
`
`III.(cid:3)
`
`THE REQUESTED ATTORNEYS’ FEES ARE REASONABLE UNDER
`CONTROLLING LAW. ................................................................................................... 10(cid:3)
`
`A.(cid:3)
`
`B.(cid:3)
`
`C.(cid:3)
`
`D.(cid:3)
`
`The Settlement Creates a Common Fund from Which Percentage-of-
`the-Fund is the Appropriate Method for Awarding Attorneys’ Fees. ................... 10(cid:3)
`
`Plaintiffs’ Requested Fee is an Appropriate Market-Based Fee and
`Should Be Approved. ............................................................................................ 14(cid:3)
`
`1.(cid:3)
`
`2.(cid:3)
`
`Class Counsel Overcame Serious Litigation Risks. .................................. 15(cid:3)
`
`Class Counsel Achieved an Excellent Result ........................................... 18(cid:3)
`
`A Lodestar Cross-Check Confirms that the Fee Requested is Proper. ................. 20(cid:3)
`
`A “Sliding Scale” Approach is Neither Necessary Nor Appropriate
`Here. ...................................................................................................................... 23(cid:3)
`
`IV.(cid:3)
`
`V.(cid:3)
`
`COUNSEL’S LITIGATION EXPENSES WERE REASONABLY
`INCURRED AND SHOULD BE APPROVED ............................................................... 27(cid:3)
`
`THE CLASS REPRESENTATIVES SHOULD RECEIVE SERVICE
`AWARDS ......................................................................................................................... 27(cid:3)
`
`VI.(cid:3)
`
`CONCLUSION ................................................................................................................. 29(cid:3)
`
`
`
`
`
`
`
`i
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 3 of 37 PageID #:3614
`
`TABLE OF AUTHORITIES
`
`Cases
`
`
`Americana Art China Co., Inc. v. Foxfire Printing and Packaging, Inc.,
`743 F.3d 243 (7th Cir. 2014) ..................................................................................................... 11
`Arenson, et al. v. Bd. of Trade of City of Chicago,
`372 F. Supp. 1349 (N.D. Ill. 1974) ............................................................................................ 10
`Beckman v. KeyBank, N.A.,
`293 F.R.D. 467 (S.D.N.Y. 2013) ............................................................................................... 22
`Blum v. Stenson,
`465 U.S. 886 (1984) .................................................................................................................. 14
`Boeing Co. v. Van Gemert,
`444 U.S. 472 (1980) ............................................................................................................ 10, 11
`Brewer v. S. Union Co.,
`607 F. Supp. 1511 (D. Colo. 1984) ........................................................................................... 10
`Columbus Drywall & Insulation, Inc. v. Masco Corp.,
`2012 WL 12540344 (N.D. Ga. Oct. 26, 2012) .......................................................................... 22
`Cook v. Niedert,
`142 F.3d 1004 (7th Cir. 1998) ....................................................................................... 20, 21, 28
`Denius v. Dunlap,
`330 F.3d 919 (7th Cir. 2003) ..................................................................................................... 20
`Dial Corp. v. News Corp.,
`317 F.R.D. 426 (S.D.N.Y. 2016) ............................................................................................... 25
`Dohrmann v. Intuit, Inc.,
`823 F. App’x 482 (9th Cir. 2020) (reversing ............................................................................. 15
`Exch. Comm’n v. First Secs. Co. of Chicago,
`528 F.2d 449 (7th Cir. 1976) ..................................................................................................... 13
`Florin v. Nationsbank of Ga., N.A.,
`34 F.3d 560 (7th Cir. 1994) ............................................................................................. 7, 13, 21
`Gaskill v. Gordon,
`160 F.3d 361 (7th Cir. 1998) ..................................................................................................... 11
`Gaskill v. Gordon (“Gaskill I,
`942 F. Supp. 382 (N.D. Ill. 1996) .............................................................................................. 13
`Gastineau v. Wright,
`592 F.3d 747 (7th Cir. 2010) ..................................................................................................... 21
`George v. Kraft Foods Glob., Inc.,
`2012 WL 13089487 (N.D. Ill. June 26, 2012) ........................................................................... 20
`Hale v. State Farm Mut. Auto. Ins. Co.,
`2018 WL 6606079 (S.D. Ill. Dec. 16, 2018............................................................................... 12
`Harman v. Lyphomed, Inc.,
`945 F.2d 969 (7th Cir. 1991) ............................................................................................... 21, 22
`Heekin, v. Anthem, Inc.,
`2012 WL 5878032 (S.D. In. Nov. 20, 2012) ............................................................................. 20
`Hensley v. Eckerhart,
`461 U.S. 424 (1983) .................................................................................................................. 13
`
`
`
`ii
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 4 of 37 PageID #:3615
`
`Hillson v. Kelly Servs. Inc.,
`2017 WL 3446596 (E.D. Mich. Aug. 11, 2017) ........................................................................ 22
`Horizon Healthcare Servs., Inc.,
`2016 WL 6089713 (D.N.J. Oct. 18, 2016) ................................................................................ 22
`In re Avandia Mktg., Sales Practices and Prods. Liab. Litig.,
`2012 WL 6923367 (E.D. Pa. Oct. 19, 2012) ............................................................................... 9
`In re Broiler Chicken Antitrust Litig.,
`2021 WL 5709250 (N.D. Ill. Dec. 1, 2021)......................................................................... 11, 25
`In re Broiler Chicken Antitrust Litig.,
` 2021 U.S. Dist. LEXIS 229895 (N.D. Ill. Dec. 1, 2021) .......................................................... 12
`In re Capital One Telephone Consumer Protection Act Litig.,
`80 F. Supp. 3d 781 (N.D. Ill. 2015) ............................................................................................. 8
`In re Dairy Farmers of America, Inc.,
`80 F. Supp. 3d 838 (N.D. Ill. Jan. 20, 2015) ............................................................................. 20
`In re Facebook Biometric Info. Priv. Litig.,
`2022 WL 822923 (9th Cir. Mar. 17, 2022) ............................................................................... 26
`In re Giant Interactive Group, Inc. Sec. Litig.,
`279 F.R.D. 151 (S.D.N.Y.) .......................................................................................................... 2
`In re Imax Secs. Litig.,
`2012 WL 3133476 (S.D.N.Y. Aug. 1, 2012)............................................................................... 2
`In re Lawnmower Engine Horsepower Mktg. & Sales Practices Litig.,
`733 F. Supp. 2d 997 (E.D. Wis. 2010) ...................................................................................... 22
`In re Northfield Lab., Inc. Secs. Litig.,
`2012 WL 2458445 (N.D. Ill. June 26, 2012) ............................................................................. 11
`In re Ready-Mixed Concrete,
`2010 WL 3282591 (S.D. Ind. Aug. 17, 2010) ........................................................................... 27
`In re Schering-Plough Corp. Enhance Secs. Litig.,
`2013 WL 5505744 (D.N.J. Oct. 1, 2013) .................................................................................... 9
`In re Synthroid Mktg. Litig.,
`264 F.3d 712 (7th Cir. 2001) .............................................................................................. Passim
`In re Synthroid Mktg. Litig.,
`325 F.3d 974 (7th Cir. 2003) ............................................................................................... 24, 25
`In re VeriFone Holdings, Inc. Sec. Litig.,
`2014 WL 12646027 (N.D. Cal. Feb. 18, 2014) ......................................................................... 22
`In re Warner Comm’ns. Secs. Litig.,
`618 F. Supp. 735 (S.D.N.Y. 1985) ............................................................................................ 10
`In re WorldCom, Inc. Secs. Litig.,
`388 F. Supp. 2d 319 (S.D.N.Y. 2005) ................................................................................... 9, 22
`Ins. Brokerage Antitrust Litig.,
`282 F.R.D. 92 (D.N.J. Mar. 30, 2012) ......................................................................................... 9
`Jeffboat, LLC v. Dir., Office of Workers’ Comp. Programs,
`553 F.3d 487 (7th Cir. 2009) ..................................................................................................... 20
`Johnson v. Uber Techs., Inc.,
` 2018 U.S. Dist. LEXIS 161155 (N.D. Ill. Sep. 20, 2018) ........................................................ 15
`Kirchoff v. Flynn,
`786 F.2d 320 (7th Cir. 1986) ....................................................................................................... 7
`
`
`
`iii
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 5 of 37 PageID #:3616
`
`Kolinek v. Walgreen Co.,
`311 F.R.D. 483 (N.D. Ill. 2015) ................................................................................................ 11
`Leung v. XPO Logistics, Inc.,
`326 F.R.D. 185 (N.D. Ill. 2018) ................................................................................................ 20
`Matter of Cont’l Illinois Sec. Litig.,
`962 F.2d 566 (7th Cir. 1992) ....................................................................................................... 7
`Mills v. Elec. Auto-Lite Co.,
`396 U.S. 375 (1970) ............................................................................................................ 11, 26
`Miracle-Pond v. Shutterfly, Inc., No. 19-cv-04722,
` 2020 U.S. Dist. LEXIS 86083 (N.D. Ill. May 15, 2020) .......................................................... 15
`Montgomery v. Aetna Plywood, Inc.,
`231 F.3d 399 (7th Cir. 2000) ..................................................................................................... 11
`Paz v. Portfolio Recovery Assocs., LLC,
`924 F.3d 949 (7th Cir. 2019) ..................................................................................................... 21
`Peter v. DoorDash, Inc.,
`2020 WL 1967568 (N.D. Cal. Apr. 23, 2020) ........................................................................... 15
`Schulte v. Fifth Third Bank,
`805 F. Supp. 2d 560 (N.D. Ill. Jul. 29, 2011) ............................................................................ 22
`Silverman v. Motorola Sols., Inc.,
`739 F.3d 956 (7th Cir. 2013) ..................................................................................... 7, 23, 24, 25
`Skelton v. Gen. Motors Corp.,
`860 F.2d 250 (7th Cir. 1988) ..................................................................................................... 21
`Spicer v. Chicago Bd. Options Exch., Inc.,
`844 F. Supp. 1226 (N.D. Ill. 1993) ............................................................................................ 28
`Trist v. First Fed. Savings & Loan Ass’n of Chester,
`89 F.R.D. 8 (E.D. Pa. 1980) ...................................................................................................... 10
`Vizcaino v. Microsoft Corp.,
`290 F.3d 1043 (9th Cir. 2002) ................................................................................................... 22
`Wal-Mart Stores, Inc. v. Visa U.S.A., Inc.,
`396 F.3d 96 (2d Cir. 2005) ........................................................................................................ 25
`Williams v. Gen. Elec. Cap. Auto Lease,
`1995 WL 765266 (N.D. Ill. Dec. 26, 1995)............................................................................... 11
`Williams v. Rohm & Haas Pension Plan (“Rohm & Haas II”),
`658 F.3d 629 (7th Cir. 2011) ............................................................................................... 11, 20
`Williams v. Rohm & Haas Pension Plan) (“Rohm & Haas II”),
`2010 WL 4723725 (S.D. Ind. Nov. 12, 2010) ........................................................................... 27
`Wright v. Nationstar Mortg. LLC,
`2016 WL 4505169 (N.D. Ill. Aug. 29, 2016) ............................................................................ 20
`
`
`
`
`
`
`
`
`
`iv
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 6 of 37 PageID #:3617
`
`
`Fed. R. Civ. P. 12(b)(6)................................................................................................................. 16
`Fed. R. Civ. P. 23(h) ..................................................................................................................... 26
`
`
`Rules
`
`Other Authorities
`
`
`ABA Regulation of Contingency Fees: Money Talks, Ethics Walks,
`65 Fordham L. Rev. 247 (1996) ................................................................................................ 14
`
`
`
`
`
`
`
`v
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 7 of 37 PageID #:3618
`
`
`I.
`
`INTRODUCTION
`
`This multidistrict litigation (“MDL) case alleges that U.S. defendants TikTok Inc.
`
`(“TikTok”) and ByteDance Technology Inc. (“ByteDance”), and foreign defendants TikTok, Ltd.
`
`and Beijing ByteDance Technology Co. Ltd. (“Beijing ByteDance”) (collectively, “Defendants”)1
`
`invaded Plaintiffs’ and putative class members’ privacy through the popular TikTok application
`
`and its predecessor application Musical.ly (the “App”), a video-sharing social networking service
`
`used to create short videos. Notably, unlike many civil cases that follow government investigations
`
`and prosecutions, this case came exclusively from Co-Lead Counsel’s own extensive, independent
`
`investigation.2
`
`After more than a year of litigation, an expert-led inside look at TikTok’s source code, two
`
`hard-fought mediations before renowned mediator Honorable Layn Phillips (ret.), and subsequent
`
`negotiations for additional relief after Co-Lead Counsel was appointed, Plaintiffs have obtained a
`
`$92 million non-reversionary cash settlement fund (“Settlement Fund”) and meaningful injunctive
`
`relief for the Settlement Class (“Class”).
`
`In reaching this excellent result, Plaintiffs overcame serious litigation risks and capitalized
`
`on unique defense-side political and settlement pressures. For example, Plaintiffs faced material
`
`risks stemming from arbitration clauses and class action waivers. And Plaintiffs asserted highly
`
`technical legal claims, navigating through developing areas of data privacy law, arising from
`
`Defendants’ novel technology. But Plaintiffs were unrelenting in their pursuit of class-wide relief
`
`
`1 Capitalized terms have the same meanings as set forth in the September 4, 2020 Settlement
`Agreement and Release (“Settlement Agreement”), as clarified by the February 16, 2021
`Addendum No. 1 to Settlement Agreement and Release (“Addendum”) (collectively, the
`“Settlement”).
`2 On September 28, 2020, the Court appointed Katrina Carroll, Elizabeth A. Fegan, and Ekwan E.
`Rhow, as Co-Lead Counsel. ECF Doc. No. 94.
`
`
`
`1
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 8 of 37 PageID #:3619
`
`and took advantage of unique political factors, including the potential for a presidentially mandated
`
`rush sale, to achieve an outstanding recovery for Plaintiffs and the Class.
`
`Though the litigation has been contentious, the settling Parties have reached consensus,
`
`and jointly endorse the proposed Settlement now before the Court. The Settlement provides
`
`substantial relief to the Class, including a non-reversionary $92 million cash payment, and
`
`prospective relief that addresses the complained-of conduct by requiring TikTok to make
`
`disclosures that comply with the laws Plaintiffs claim were violated and to initiate a newly
`
`designed data privacy compliance training program for all TikTok employees and contractors.
`
`The Settlement, which ranks among the nation’s highest privacy-related settlements,
`
`reflects the skill, expertise, and hard work of Co-Lead Counsel and other Plaintiffs’ Counsel
`
`(collectively, “Class Counsel”),3 and the benefit to class members is substantial, real, and concrete.
`
`Importantly, the proposed Settlement will eliminate the risk and uncertainty of continued
`
`proceedings in this Court, in which the foreign Defendants would contest personal jurisdiction and
`
`the domestic Defendants would pursue motions to compel arbitration and to dismiss Plaintiffs’
`
`claims. As such, Plaintiffs respectfully ask the Court to award Class Counsel 33.33% of the
`
`
`3 Under Co-Lead Counsel’s direction, 28 other firms have prosecuted this case on Plaintiffs’ behalf
`(together with Co-Lead Counsel, they are referred to collectively in this Memorandum as “Class
`Counsel”). At all times since appointment, Co-Lead Counsel directed and organized Class
`Counsel’s work. Co-Lead Counsel requests discretion to allocate an award of attorneys’ fees
`among Class Counsel. Co-Lead Counsel’s good-faith determination will reflect each individual
`Class Counsel’s contribution to the commencement, prosecution, and resolution of the litigation.
`See e.g., In re Imax Secs. Litig., 2012 U.S. Dist. LEXIS 108516, *36, 2012 WL 3133476 (S.D.N.Y.
`Aug. 1, 2012) (“lead plaintiff’s counsel is best able to fairly allocate the funds.”) (citing In re Giant
`Interactive Group, Inc. Sec. Litig., 279 F.R.D. 151 at 166 (ordering “fees shall be allocated among
`. . . counsel by lead plaintiffs’ counsel in any manner which, in their good faith judgment, reflects
`each counsel’s contribution to the institution, prosecution[,] and resolution of the action”).
`
`
`
`
`2
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 9 of 37 PageID #:3620
`
`Settlement Fund or $30,663,600 as attorneys’ fees, $789,836.62 as reimbursement for litigation
`
`expenses, and $2,500.00 in service awards to each of the 35 named class representatives.
`
`All class members will have notice and an opportunity to be heard on this motion. As
`
`discussed more specifically in Plaintiffs’ motion for final approval, Plaintiffs’ request for
`
`attorneys’ fees, reimbursement of expenses, and service awards for the class representatives will
`
`be posted on the case website, www.tiktokdataprivacysettlement.com, contemporaneously with the
`
`filing of this motion. Prior to the Court’s fairness hearing on May 18, 2022, Class Counsel will
`
`report to the Court on any further objections received to this motion for fees, expenses, and service
`
`awards.
`
`II.
`
`CLASS COUNSEL DEDICATED ENORMOUS RESOURCES TO THIS MATTER
`AND FACED SIGNIFICANT RISKS TO SUCCESSFULLY RESOLVE THIS CASE
`WITH DEFENDANTS
`
`From the inception of their investigation into this matter, Class Counsel dedicated their
`
`time, expertise, and capital to ensure the Class would recover for Defendants’ wrongful conduct.
`
`A summary of those efforts is provided below.
`
`A.
`
`Class Counsel Dedicated Tremendous Resources to Resolve Plaintiffs’ Claims.
`
`As also discussed in Plaintiffs’ accompanying motion for final approval, the Settlement
`
`was the ultimate result of the cohesion of various (and initially adverse) groups of Plaintiffs’
`
`attorneys coming together as a unit to solidify an outstanding result in the face of numerous
`
`potentially dispositive legal and factual challenges, any of which could have resulted in zero
`
`recovery for the Class. This consolidated litigation also proved to be on the cutting edge not only
`
`of BIPA and privacy litigation generally but of larger questions of state surveillance, national
`
`security, and the Chinese government’s use of artificial intelligence and biometric technology to
`
`collect personal data from foreign nationals, including U.S. citizens. Class Counsel’s investigation
`
`and pursuit of this multi-district litigation helped to shed light upon these issues more than two
`
`
`
`3
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 10 of 37 PageID #:3621
`
`years ago and was a precursor to the tremendous political pressure TikTok faced from the Trump
`
`administration in the late summer of 2020, which itself contributed to Plaintiffs’ ability to settle
`
`the case on favorable terms at that time.
`
`Class Counsel have dedicated tremendous time, effort, and expense hoeing that road, and
`
`they have done so entirely on a contingent basis, with no guarantee of compensation or even
`
`reimbursement of expenses. Since the inception of this case, Class Counsel invested thousands of
`
`hours of attorney and other legal professional time through February 28, 2022.4 Co-Lead Counsel
`
`have worked diligently to ensure that Class Counsel’s efforts have been coordinated, detailed,
`
`vigorous, and efficient. The result of these efforts is a substantial recovery for the Plaintiffs: a
`
`$92,000,000 non-reversionary cash settlement fund and important injunctive relief.
`
`As the Court is well acquainted with the history of this case and the full procedural and
`
`factual history is set forth in the accompanying final approval motion (which is incorporated here
`
`by reference), the following is only an overview of Class Counsel’s efforts to date:
`
`• The first filed case of all related cases in this MDL was filed in November 2019.
`
`The complaint was the product of Class Counsel’s extensive preparation,
`
`independent investigation, and research into the App that began in 2018, before the
`
`Congressional investigations of TikTok became trending news. An important
`
`aspect of the pre-filing investigation entailed working closely with highly trained
`
`source code experts who analyzed multiple versions of the Musical.ly and TikTok
`
`apps to uncover (1) the various types of private and personally-identifiable data
`
`taken by defendants and third-party entities whose software development kits and
`
`
`4 Class Counsel have limited the reporting of their time and lodestar through February 28, 2022
`for the purpose of this motion.
`
`
`
`4
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 11 of 37 PageID #:3622
`
`analytic libraries are secretly embedded within the apps, and (2) the domestic and
`
`foreign destinations of such misappropriated data. ECF Doc. No. 122-8 (Rhow
`
`Declaration in Support of Preliminary Approval, ¶ 10);
`
`• Class Counsel collected and analyzed numerous iterations of the TikTok terms of
`
`use and privacy policies upon which Defendants might rely for their arbitration and
`
`consent defenses and developed the arguments and evidence to counter those
`
`defenses. Id.;
`
`• With the aid of two teams of investigators in California and China, an ESI expert,
`
`and colleagues with Chinese-language skills to translate documents, Class Counsel
`
`thoroughly researched the Defendant corporations to better understand Defendants’
`
`corporate structures, document and data collection and retention systems, internal
`
`reporting systems, business and advertising models, artificial intelligence and
`
`patent development programs, and other relevant foreign and domestic activities,
`
`all of which were relevant to establishing the alleged statutory and common law
`
`violations, class damages, Defendants’ unjust enrichment, and the alter ego defense
`
`to the foreign Defendants’ anticipated personal jurisdiction challenge. Id.;
`
`• Class Counsel consulted with experts who have conducted original research into
`
`the intersection of data privacy, artificial intelligence, Chinese corporations and the
`
`Chinese government, including Chinese laws requiring corporations to share data
`
`with the government. Id.;
`
`• Class Counsel researched numerous legal issues in the data privacy field including
`
`jurisdiction and venue, potential causes of action, standing, damages, injunctive
`
`relief, notice and consent, and arbitration and class waivers;
`
`
`
`5
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 12 of 37 PageID #:3623
`
`• After conducting the extensive investigation described above, Class Counsel filed
`
`numerous complaints against the Defendants alleging BIPA claims. Subsequently,
`
`when the MDL litigation was transferred to this Court, Class Counsel conducted
`
`additional legal research and factual investigation and prepared the operative
`
`Consolidated Amended Class Action Complaint, ECF Doc. No. 114;
`
`• Class Counsel prepared and served eight sets of discovery on Defendant and
`
`negotiated a protective order with Defendants to facilitate discovery, ECF Doc. No.
`
`122-8, ¶ 15;
`
`• Beginning in April 2020, Class Counsel participated in mediation sessions with
`
`Defendants with Judge Layn Phillips (Ret.). Id., ¶ 15. Ultimately, the hard-fought
`
`mediation with Defendants resulted in an agreement in principle and a signed term
`
`sheet for a class-wide resolution, which was later memorialized in a signed
`
`agreement on September 4, 2020. Id., ¶ 2.
`
`• Subsequently, Class Counsel engaged in a candid, collaborative process to assess
`
`the case and the proposed settlement benefits. Through that process, and six months
`
`of continued negotiations with defense counsel, Class Counsel was able to improve
`
`the already substantial Class recovery obtained in the Settlement Agreement
`
`through the clarification of some of its core terms. Id., ¶¶ 21-22;
`
`• Class Counsel prepared and executed the Addendum to the Settlement Agreement.
`
`Id., ¶¶ 2, 21-22.
`
`• Class Counsel prepared the pleadings and presented argument in connection with
`
`preliminary approval, which required the preparation of additional pleadings
`
`addressing several objections. ECF Doc. Nos. 145, 159
`
`
`
`6
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 13 of 37 PageID #:3624
`
`• Class Counsel worked closely with Angeion Group, LLC, a well-regarded
`
`settlement administrator to prepare a proposed Notice Plan and related notice
`
`documents. ECF Doc. Nos. 122, 122-4, 122-5, 122-12.
`
`• Class Counsel prepared the pleadings in support of final approval of the proposed
`
`Settlement and will continue to oversee all aspects of claims administration.
`
`B.
`
`Class Counsel Faced Significant Risk of Nonpayment.
`
`A material consideration in determining an appropriate fee is the risk of nonpayment. See
`
`Silverman v. Motorola Sols., Inc., 739 F.3d 956, 958 (7th Cir. 2013); In re Synthroid Mktg. Litig.,
`
`264 F.3d 712, 718 (7th Cir. 2001). “The lawyers for the class receive no fee if the suit fails.” Matter
`
`of Cont’l Illinois Sec. Litig., 962 F.2d 566, 568 (7th Cir. 1992), as amended on denial of reh’g
`
`(May 22, 1992). “Contingent fees compensate lawyers for the risk of nonpayment. The greater the
`
`risk of walking away empty-handed, the higher the award must be to attract competent and
`
`energetic counsel.” Silverman, 739 F.3d at 958 (citing Kirchoff v. Flynn, 786 F.2d 320 (7th Cir.
`
`1986)).
`
`To determine a fee award in a class action settlement, a court must assess counsel’s risk of
`
`taking a particular case and the probability of success as it existed “at the outset of the litigation.”
`
`Florin v. Nationsbank of Ga., N.A., 34 F.3d 560, 565 (7th Cir. 1994). Therefore, a court must do
`
`its best to estimate the terms of the contract that private plaintiffs would have negotiated with their
`
`lawyers at the outset of the case, when the risk of loss still existed, rather than at the end of a
`
`successful case:
`
`The best time to determine this rate is the beginning of the case, not
`the end (when hindsight alters the perception of the suit’s riskiness,
`and sunk costs make it impossible for the lawyers to walk away if
`the fee is too low). This is what happens in actual markets.
`
`
`
`7
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 14 of 37 PageID #:3625
`
`In re Synthroid, 264 F.3d at 718; see also In re Capital One Telephone Consumer Protection Act
`
`Litig., 80 F. Supp. 3d 781, 788–89 (N.D. Ill. 2015) (the probability of success at the outset of
`
`litigation helps determine the reasonableness of the fee).
`
`As discussed below, Class Counsel faced a significant risk of nonpayment because of the
`
`complexity of Plaintiffs’ claims based on developing areas of data privacy laws and the material
`
`risks stemming from arbitration clauses and class action waivers. Class Counsel believed in
`
`Plaintiffs’ case, invested extensive time, effort, and money, and prosecuted it vigorously. Class
`
`Counsel did so at the risk of no recovery and declined other opportunities because of the
`
`complexity, time, and expense this case demanded. Class Counsel also conceived and brought this
`
`case without the benefit of any related government investigation or enforcement action. The
`
`investigation that led to the commencement of this litigation began in 2018, before the
`
`Congressional investigations of TikTok.
`
`1.
`
`Class Actions are Inherently Risky.
`
`In a study analyzing class actions against insurers, only 12% of 564 attempted class actions
`
`led to a class settlement. Theodore Eisenberg & Geoffrey P. Miller, Attorneys’ Fees and Expenses
`
`in Class Action Settlements: 1993-2008, 7 J. EMPIR. L. STUD. 248, at 24 (2010) (citing Nicholas
`
`M. Pace, Stephen J. Carroll, Ingo Vogelsang, & Laura Zakaras, Insurance Class Actions in the
`
`United States, 47 tbl.3.16 (2007)). This case was especially risky because the law governing
`
`enforcement of BIPA and other data privacy laws is relatively unsettled.
`
`2.
`
`Class Counsel Faced Complex Issues.
`
`Investigating and proving Plaintiffs’ core claims under BIPA and other data privacy laws
`
`is difficult. The Complaint alleges that the App uses a complex system of artificial intelligence to
`
`recognize facial features in users’ videos. ECF Doc. No. 114 (Consolidated Amended Complaint),
`
`¶¶ 3, 250. Plaintiffs allege that the App also analyzes faces to determine the user’s age,
`
`
`
`8
`
`

`

`Case: 1:20-cv-04699 Document #: 197 Filed: 03/31/22 Page 15 of 37 PageID #:3626
`
`race/ethnicity, and gender, using proprietary algorithms to attempt to prevent minor children from
`
`using the App and to recommend content and profiles for the user to follow. Id., ¶¶ 245-59.
`
`Plaintiffs contend that Defendants used this private and biometric information to maintain a
`
`competitive advantage over other social media apps and profit from its use of improperly obtained
`
`data, all while failing to comply with the minimum requirements for handling users’ biometric
`
`data established by BIPA. Id., ¶ 240-43. The complexity of the issues Class Counsel confronted
`
`is amply demonstrated by the number of experts Class Counsel necessarily relied on to gain an
`
`understanding into Defendants’ alleged misconduct. See, e.g., Declarations of Katrina Carroll and
`
`Ekwan Rhow in Support of Plaintiffs’ Motion for Preliminary Approval, ECF Doc. Nos. 122-6 (¶¶
`
`29-39) and 122-8 (¶¶ 10, 12, 14).
`
`3.
`
`Defendants Had Substantial Resources for Their Defense.
`
`Not only did Class Counsel confront the inherent uncertainties of bringing an action
`
`alleging relatively novel claims, but they a