Erin Caligiuri v. Symantec Corp.
855 F.3d 860
| 8th Cir. | 2017Background
- Consumers sued Symantec and Digital River for selling "download insurance" for Norton software without disclosing free re-download alternatives; a national class was certified for purchases from Jan 24, 2005 to Mar 10, 2011.
- Parties settled for a $60,000,000 total fund; Symantec separately agreed to pay up to $7,500 per named plaintiff and any excess above $7,500 would come from the fund.
- Net settlement fund (after fees, expenses, admin costs, and excess service awards) would pay $50 per purchase subject to pro rata reduction; a second distribution would occur if >= $2 per approved claimant remained; otherwise remaining funds go cy pres to the Electronic Frontier Foundation (EFF).
- At preliminary approval the administrator estimated ~$2.42 million in total administrative costs and reported early claim counts; later claims rose to 732,049 purchases yielding ~ $49.82 per purchase even if all valid.
- District court approved the settlement, awarded class counsel one-third of the total settlement fund ($20 million) plus ~$738,605 in expenses, and granted $10,000 service awards to each named plaintiff; two class members appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether court abused discretion approving settlement without final admin costs or final class payment amount | Caligiuri: court could not assess fairness without final admin costs and final per-claimant amounts | Symantec / settlement: estimates were provided; courts commonly approve with estimates and settlement terms protect class (second distribution, cy pres) | No abuse; estimates were adequate and likely per-claimant recovery exceeded losses |
| Whether attorneys’ fees should be calculated on gross fund (including admin costs) | Caligiuri & Van de Voorde: admin costs are not a benefit to class and should be excluded from the fee base | Court/class: Eighth Circuit permits including administration costs in benefit calculation absent a showing they are unjustified | No abuse; Eighth Circuit precedent allows including admin costs and appellants did not show costs were unjustified |
| Whether cy pres recipient (EFF) selection and contingency satisfied standards | Caligiuri: court failed to ensure cy pres funds will benefit the class | Settlement/court: EFF’s mission aligns with digital consumer protection; cy pres only applies if further distributions infeasible | No abuse; EFF is an appropriate cy pres recipient and distribution conditions satisfy standards |
| Whether $10,000 service awards to each named plaintiff were excessive | Caligiuri: awards are excessive and unfair to class | Court/class: awards are customary; plaintiffs substantially participated over five years | No abuse; $10,000 awards are within circuit practice and justified by participation and benefit to class |
Key Cases Cited
- Marshall v. Nat’l Football League, 787 F.3d 502 (8th Cir. 2015) (standard for abuse of discretion in settlement approval)
- In re Airline Ticket Com’n Antitrust Litig., 307 F.3d 679 (8th Cir. 2002) (cy pres must be near as possible to class interests)
- Petrovic v. Amoco Oil Co., 200 F.3d 1140 (8th Cir. 1999) (standards for reviewing attorney-fee awards and lodestar cross-check)
- Johnston v. Comerica Mortg. Corp., 83 F.3d 241 (8th Cir. 1996) (percentage-of-benefit and lodestar methodologies described)
- In re Life Time Fitness, Inc., Tel. Consumer Prot. Act (TCPA) Litig., 847 F.3d 619 (8th Cir. 2017) (may include fund administration costs in benefit when calculating percentage fees)
- In re BankAmerica Corp. Sec. Litig., 775 F.3d 1060 (8th Cir. 2015) (cy pres distributions permissible only when further distributions to class members are not feasible)
- U.S. Bancorp Litig., 291 F.3d 1035 (8th Cir. 2002) (factors for evaluating service awards)
- Huyer v. Buckley, 849 F.3d 395 (8th Cir. 2017) (approving settlement where admin costs were estimated and considered)
- Redman v. Radioshack Corp., 768 F.3d 622 (7th Cir. 2014) (held administrative costs should not be included in calculating fee split; cited by appellants but distinguished)