Payments Soon to Begin in $310M iPhone ‘Batterygate’ Settlement

It’s been over three years since Apple agreed to a $500 million settlement on the “Batterygate” scandal, and now it looks like it may finally be starting to pay out the amounts to those consumers who were affected by the infamous battery throttling issue.

For those who may not remember all the details, Apple got into hot water a few years ago when folks discovered that it had been “secretly” slowing down older iPhones as their batteries aged. This led to a massive number of class-action lawsuits that claimed the company was deliberately making older iPhones obsolete to encourage customers to upgrade to newer models.

However, what Apple was really trying to do was avoid unexpected iPhone shutdowns that could result from aging batteries unable to keep up with peak power demands. It wasn’t necessarily a bad call, as Apple believed most people would prefer an iPhone that was slightly slower but still reliable, as opposed to one that might spontaneously power off just as you were about to capture a memorable photo or place an important phone call.

Still, it was a decision that Apple made arbitrarily on behalf of its customers, without giving anyone a choice in the matter, telling them what it was doing, or even revealing that a simple battery replacement would have solved the performance issues. Apple CEO Tim Cook ultimately apologized for Apple’s lack of transparency, and the company tried to make things right by offering discounted battery replacements plus a new battery health feature in iOS 11.3.

However, that wasn’t enough to stop multiple lawsuits — some of which were absurd, but many of which ended up consolidated into a single class-action suit that Apple eventually agreed to settle in 2020. In typical corporate settlement fashion, Apple naturally denies all wrongdoing but offers a payout to avoid the cost of ongoing litigation. 

Apple’s Settlement Comes to a Close

The delay in this final payout isn’t a matter of Apple dragging its heels so much as the nature of the court system when it comes to class-action lawsuits and appeals. If all had gone smoothly, a judge would have signed off on the final settlement by the end of 2020, and payouts would have begun soon after.

Unfortunately for those waiting for their cheque, several iPhone owners objected to the terms of the settlement and filed multiple appeals to the US Court of Appeals for the Ninth Circuit. Among the concerns raised on appeal were that the settlement provided inadequate notice to “nonnatural persons” (e.g., businesses, organizations, and partnerships), that the settlement limited compensation to only those who could claim that they experienced the alleged problems, and that the lower district court had applied the wrong legal standard in deciding the case.

While the appellate court dismissed the first two claims, it agreed with the legal standard argument and vacated the district court’s original order in September 2022, remanding the case back to the lower court so that it could be evaluated under the correct “heightened scrutiny” legal standard for fairness. This was a seemingly minor legal technicality, though, as the higher court otherwise “commend[ed] the district court’s thoughtful and thorough analysis” and its “great care in considering the terms of the settlement.” Where it erred was in presuming that the settlement was fair and reasonable without “extra scrutiny.”

As we have repeatedly admonished, settlement prior to class certification requires extra scrutiny. While we commend the district court’s thoughtful and thorough analysis, which suggests that the court took great care in considering the terms of the settlement, its written order explicitly states that the court applied a presumption that the settlement was fair and reasonable.Judge Jacqueline H. Nguyen, Ninth Circuit Court Judge

This returned the case into the hands of Judge Edward J. Davila of the US District Court for the Northern District of California, who took a second look with the required “heightened scrutiny,” confirming in February that it remained fair and reasonable even under closer legal inspection.

However, this didn’t satisfy two of the original appellants, Sarah Feldman and Hondo Jan, who filed a subsequent appeal in March, once again delaying the final payouts. However, after being granted an extension in May to file their opening brief, the duo later filed a motion to voluntarily dismiss the appeal entirely, a move that took until last week to be signed off on by the court.

As Bloomberg Law reports, this finally clears the way for settlement payments to actually begin. After three years of legal wrangling and delays, the terms of the settlement remain unchanged. Apple initially agreed to pay out between $310 million and $500 million to class-action participants, depending on the number of claims filed, with the goal that each claimant would receive a minimum of $25.

Sadly, the deadline to file a claim passed nearly three years ago on October 6, 2020. Since the terms of the settlement haven’t changed, there’s no need to extend that deadline — it’s only the payout that’s been delayed.

The settlement also only includes US owners of the iPhone 6, iPhone 6s, iPhone 7, and first-generation iPhone SE models (and their Plus equivalents) that were running iOS 10.2.1 or later (iPhone 6/6s/SE) or iOS 11.2 or later (iPhone 7) before Dec 21, 2017.

This also means that the courts and Apple know exactly how many payouts will need to be made, which, according to Bloomberg Law has obligated Apple to pay only the minimum $310 million it had agreed to, as this number would have only increased if the company needed to do so to pay at least $25 to each person who filed a claim. As it stands, the payouts are expected to work out to $65 per claimant.

If you do the math, that makes it sound like nearly 4.8 million people filed claims, but it’s important to note that around $93 million of the total will be going to the lawyers as “reasonable attorneys’ fees” for their work on the case. To be fair, a consolidated class-action lawsuit likely has more than a few law firms and lawyers involved, but it’s still a lot of money. As usual, it’s the lawyers who are the real winners here.

Comment

The settlement is the result of years of investigation and hotly contested litigation. We are extremely proud that this deal has been approved, and following the Ninth Circuit’s order, we can finally provide immediate cash payments to impacted Apple customers.Mark C. Molumphy, Cotchett, Pitre & McCarthy LLP, in a statement to Bloomberg Law

Still, even after the administrative and attorneys fees are deducted, that leaves over three million people who were impacted by Apple’s battery throttling issues seriously enough to file a claim. If you met the deadline and filed your claim three years ago, you’ll hopefully be seeing a cheque in the mail soon now that this last legal hurdle is out of the way.