Plaintiffs’ attorneys seek $30M in fees for App Store litigation

Plaintiffs' attorneys will ask a federal judge in October for $30 million in attorney fees after reaching a $100 million settlement with Apple Inc. last month to end antitrust litigation with app developers.

"The Ninth Circuit has established a benchmark percentage of 25 percent to be used as the 'starting point' for analysis," Steve Berman of Hagens Berman Sobol Shapiro LLP wrote in a motion seeking preliminary approval.

The plaintiffs' attorneys invested 20,576 hours and more than $10 million in attorney fees in the litigation, according to the motion filed in late August. A $30 million attorney fee award, which they argue is within the range of awards in other class action settlements, would result in a lodestar multiplier of 2.83.

U.S. District Judge Yvonne G. Rogers in Oakland set a hearing for Oct. 12.

The attorneys point to a 2003 federal case in Pennsylvania, In re: Linerboard Antitrust Litigation, in which the court explained that "during 2001-2003, the average multiplier approved in common fund class actions was 4.35 and during a 30-year period from 1973-2003, [the] average multiplier approved in common fund class actions was 3.89."

A fee award of $30 million, which is the maximum amount attorneys will request, represents 30% of the Small Developer Assistance Fund.

Under the settlement, Apple will create a $100 million fund for small developers, whose proceeds from app sales were less than $1 million per year from June 2015 to April 2021. Roughly 67,000 app developers will be able to claim sums ranging from $250 to $30,000 based on their participation in the App Store.

Federal courts in the Northern District of California and across the nation routinely award class counsel fees 30% or higher even when it comes to "megafund" common funds which exceed $100 million, the plaintiffs' attorneys said. Filed in 2019 under the Sherman Act and California's unfair competition law, the lawsuit sought to end Apple's alleged practices of charging commissions of up to 30% on all transactions and prohibiting app developers from notifying users inside of apps that they do not have to use Apple's in-app payment system. Cameron v. Apple Inc., 19-cv-03074 (N.D. Cal., filed June 4, 2019).

Under the settlement, Apple maintains most of the business practices alleged to violate antitrust law but the company agreed to preserve for three years the commission rate for small developers, which it cut last year from 30% to 15%. Apple also agreed to publish an annual transparency report on the app review process.

An organization known as the Coalition for App Fairness says the settlement does nothing to address foundational problems facing developers, large and small. The organization called the deal a "sham settlement" and a "desperate attempt to avoid the judgment of courts, regulators, and legislators worldwide," in a statement last week.

Shortly after the settlement was announced, Apple issued its own statement saying the settlement will help make the App Store provide even better business opportunities for developers.

"Apple appreciates the developer feedback and ideas that helped inform the agreement, and respects the ongoing judicial review process," the statement reads.

Berman did not respond to a request for comment Wednesday.