Attorneys who led a class action lawsuit against Apple over alleged gift card fraud should receive more than $12 million from a $35 million settlement, a federal judge has ruled, despite Apple's objections that the plaintiffs' lawyers are claiming millions of dollars more than they should, taking money away from class members who the lawyers claimed they represented.
On April 3, U.S. District Judge Edward J. Davila granted a motion from attorneys from the firms of Scott+Scott Attorneys at Law, of New York and San Diego; Cafferty Clobes Meriwether & Sprengel, of Chicago; and Kirby McInerney LLP, of Chicago, for an award of attorney fees and expenses.
The motion came as the court wraps up proceedings, following final approval of the settlement in the class action litigation against the Cupertino-based tech giant.
In all, Davila said the attorneys should be entitled to $11.65 million in fees, plus more than $500,000 in reimbursement for litigation-related expenses.
The case dates back to 2020 when the lawyers filed class action claims in San Francisco federal court against Apple, claiming the company allegedly refused to refund potentially millions of dollars in gift card expenditures to Apple customers who allegedly were scammed.
The case involved four named plaintiffs, identified as Michael Polston, Nancy Martin, Maria Rodriguez and Andrew Hagene.
The litigation centered on claims those named plaintiffs, in addition to potentially hundreds or thousands of others, were the victims of a scam.
According to court documents, the alleged victims purchased gift cards through Apple's iTunes music platform and its App Store, but were allegedly "tricked by third-party scammers into ... providing the cards' redemption codes to scammers."
When the alleged scam victims notified Apple of the scheme, Apple allegedly "knowingly kept the money stolen from the victims," refusing their requests for refunds.
While Apple initially secured dismissal of the claims, the plaintiffs amended their complaint and in 2022, survived Apple's second attempt to toss the case.
The case has continued in federal court since, ultimately resulting in a settlement valued at $35 million, which was announced in 2024.
Plaintiffs lawyers claimed the settlement would result in a large recovery for class members, as they asserted it would result in full recovery in many cases for the money lost by eligible class members who file claims for a cut of the settlement pot.
According to the April 3 ruling, more than 14% of of potential class members have filed claims for a share of the settlement.
As part of the settlement agreement, plaintiffs' lawyers filed a motion, asking the court to approve their requested fees and expenses.
In that motion, they noted California federal courts have typically stuck to a benchmark fee award of 25% of the settlement.
However, they said their work was strong and lengthy enough to allow them to collect 33% of the settlement fund, instead.
Apple objected to that fee request, saying there was nothing exceptional or unusual about the case or its result to allow the lawyers to claim an additional $3 million in fees, over and above the customary 25% award.
Apple argued that money should be reserved for class members, not used to pad the lawyers' fees.
Davila, however, rejected Apple's objections, agreeing with the plaintiffs' lawyers that they "undertook substantial risk" and had "made every effort to maximize" the payout to class members before the claims period ended.
The judge granted the full payment request.
Apple was represented in the action by attorneys David R. Singh, Morgan D. MacBride and Amy Le, of Weil Gotshal & Manges, of Redwood Shores.
Plaintiffs were represented by attorneys Joseph P. Guglielmo, Amanda M. Rolon and Hal D. Cunningham, of Scott+Scott; Nyran R. Rasche and Nickolas J. Hagman, of Caferty Clobes; and Anthony F. Fata and Sarah E. Flohr, of Kirby McInerney.