PlayStation settlement held up by attorney fee battle

OAKLAND — Gamers angry about the Linux operating system being removed from their PlayStation 3 in 2010 are on the verge of receiving a payout, but lawyers squabbling over fees are holding up a settlement.

Attorneys representing the plaintiffs and Sony Computer Entertainment America LLC proposed a $3.75 million class action settlement at a hearing Tuesday, their second attempt at reaching an agreement. In Re Sony PS3 “Other OS” Litigation, 10-CV01811 (N.D. Cal., filed April 27, 2010).

U.S. District Judge Yvonne Gonzalez Rogers said she would likely approve the new settlement after plaintiffs’ attorneys lowered their fee request by $1 million. The attorneys will still pocket more than $1.25 million of the settlement fund if the judge approves their new fee request.

But at a hearing Tuesday, Gonzalez Rogers had to dig through another fee request from lawyers representing objectors to the first settlement.

The judge seemed highly skeptical that attorneys representing the objectors should get a slice of the attorney fees.

Grant Atkinson, a partner at Framework Law Group PC, said he and his co-counsel helped objectors defeat the first settlement proposal. Plaintiffs’ attorneys disagreed, contending the objectors essentially copied and pasted their arguments from comments Gonzalez Rogers made about her concerns with the initial settlement.

“Did you raise any issues that were not originally identified by me?” the judge asked.

Atkinson said there were nuances of the law that he and his colleagues pointed out, but when the judge asked for specifics, he couldn’t offer any.

Gonzalez Rogers also asked Atkinson to explain the difference between a pleading and a filing, which he was unable to do. She said his co-counsel must have done all the work.

“I mean look, are you rubber stamping what he’s doing on the one hand and on the other hand you’re asking me to give you attorney fees?”

James J. Pizzirusso, an attorney with Hausfeld who represents the plaintiffs, said there had been no objections to the new settlement proposal.

Gonzalez Rogers said she would very likely approve the settlement and would take all the attorney fee requests under advisement.

The gamers that make up the class contend Sony marketed the PS3 as a gaming console that “does everything” and offered the ability for consumers to use the device as a personal computer, in addition to a gaming machine, by installing the Linux operating system. The plaintiffs say the removal of that function, four years later, was a breach of trust for consumers.

Sony contended only a small subset of users purchased the gaming system because of the ability to use the relatively obscure operating system but couldn’t contest the fact that it did market the function on websites frequented by Linux users.

The case stretched on for seven years and has been handled by three different district court judges. Now it’s on the verge of a settlement after being dismissed and revived at the 9th U.S. Circuit Court of Appeals.