$110M in fees for attorneys who sued Apple

Plaintiffs' firms who got Apple Inc. to pay $490 million to resolve claims that the iPhone maker misled stockholders about the economic impacts of the U.S.-China trade war will receive $110 million in attorney fees, ruled a federal judge in Oakland who regularly presides over complex litigation involving the tech giant.

Class counsel at Robbins Geller Rudman & Dowd LLP, Labaton Keller Sucharow LLP, and other firms asked U.S. District Judge Yvonne Gonzalez Rogers for $122 million in attorney fees. Apple's lawyers at Paul Weiss Rifkind Wharton & Garrison LLP and Orrick Herrington & Sutcliffe LLP did not take a position on the motion. The company denied any wrongdoing.

"Using the percentage-of-the-fund approach, with a lodestar cross-check, the court finds it fair to both the class and counsel to award a reduced amount of fees than that requested," Gonzalez Rogers wrote in her final approval order last week. 

Under the percentage-of-the-fund approach, courts consider various factors, including the overall results for the class members, whether the case was risky for class counsel, and whether the attorneys' performance generated benefits beyond the settlement fund. The lodestar approach multiplies the hours reasonably expended by the reasonable hourly rate.

Gonzalez Rogers wrote in her order that class members' reaction to the settlement "was overwhelmingly positive" with few opt-outs, strongly indicating that the deal was fair and equitable. In re: Apple Inc. Securities Litigation, 4:19-cv-02033-YGR (N.D. Cal., filed Apr. 16, 2019). 

The investor plaintiffs accused Apple's top executives, including CEO Tim Cook and chief financial officer Luca Maestri, of lying about the threats to Apple's Chinese market because of trade tensions between the U.S. and China. 

While the Trump administration enacted import tariffs, Chinese smartphone competitors offered alternatives for hundreds of dollars less than iPhones, Robbins Geller founding partner Shawn A. Williams wrote in the complaint. 

During a conference call for analysts and investors in November 2018, Cook explicitly excluded China from the category of emerging markets experiencing negative economic pressures, Williams continued. 

He said Apple had already "begun to see declining traffic in Apple's retail stores and those of its channel partner stores in Greater China and reports of an overall contraction of the smartphone industry."