Michael Edenborough v. ADT, LLC
4:16-cv-02233
N.D. Cal.Oct 16, 2017Background
- Plaintiffs Edenborough and Wilson brought a putative nationwide class action against ADT alleging failure to disclose that ADT residential wireless sensors were unencrypted, vulnerable to third‑party attack, and that those omissions deceived consumers.
- Case removed to N.D. Cal.; Plaintiffs moved for leave to file a Second Amended Complaint adding multi‑jurisdictional claims and additional named plaintiffs; motion unopposed and granted.
- After substantial discovery (≈45,000 pages, 17 depositions) and two mediations, parties negotiated a settlement: gross fund up to $16,000,000 (inclusive of fees, costs, admin, and service awards) to resolve related cases nationwide.
- Proposed class: current and former ADT residential customers with at least one wireless peripheral sensor between Nov. 13, 2009 and Aug. 15, 2016 (≈2.25–6.4 million potential members depending on records).
- Allocation: $15 per claimant for contracts Nov. 13, 2009–July 23, 2014; $45 per claimant for contracts July 24, 2014–Aug. 15, 2016 (pro rata adjustments to exhaust fund). Counsel seeks 25% fee of net settlement; class representative awards up to $2,500 or $10,000.
- Court conditionally certified the settlement class, appointed class counsel and representatives, approved notice plan and preliminary settlement procedures, and set a final fairness schedule.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether settlement class may be certified under Rule 23(a) and 23(b)(3) | Class members are numerous, identifiably defined, share common questions about ADT's omissions and system vulnerability, and plaintiffs typical and adequate | ADT contested class certification and merits, arguing defenses that could reduce or eliminate damages | Court conditionally certified the settlement class: numerosity, ascertainability, commonality, typicality, adequacy, predominance, and superiority satisfied |
| Whether preliminary approval of the settlement is fair, reasonable, and non‑collusive | Settlement (up to $16M) reflects compromise given discovery, expert work, mediation, and litigation risks; individual payments approximate reasonable recovery after discounts | ADT emphasized risks to plaintiffs and contested damages (argued potential for zero damages at trial) | Court found settlement within range of possible approval, non‑collusive (mediations, no reversion, no clear‑sailing), and set final fairness hearing |
| Attorneys’ fees and incentive awards | Counsel requested 25% of net fund (benchmark) and service awards up to $10,000 for some reps | ADT did not oppose but class size/low per‑claimant payments raise scrutiny of proportionality | Court found 25% request within Ninth Circuit benchmark; questioned relative size of some incentive awards and directed further support at final approval |
| Adequacy of notice and administration plan | Proposed direct notice to probable members, supplemental publication/email for possible members, a settlement website, and Dahl Administration as administrator | No opposition; ADT to provide lists and cooperate with administration | Court approved the notice program as meeting Rule 23 and due process requirements |
Key Cases Cited
- Wal‑Mart Stores, Inc. v. Dukes, 564 U.S. 338 (discussing commonality and classwide resolution)
- Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (heightened scrutiny for settlement classes)
- In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (signs of collusion and settlement scrutiny)
- Hanlon v. Chrysler Corp., 150 F.3d 1011 (class settlement fairness factors)
- Class Plaintiffs v. City of Seattle, 955 F.2d 1268 (policy favoring settlement of class actions)