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Caligiuri v. Symantec Corp.

United States Court of Appeals, Eighth Circuit

April 28, 2017

Erin C. Caligiuri Objector - Appellant
v.
Symantec Corp.; Digital River, Inc. Defendants-Appellees Devi Khoday; Danise Townsend, individually and on behalf of the class they represent Plaintiffs - Appellees Michelle Van De Voorde Objector - Appellant Devi Khoday; Danise Townsend, individually and on behalf of the class they represent Plaintiffs - Appellees
v.
Symantec Corp.; Digital River, Inc. Defendants-Appellees

          Submitted: April 3, 2017

         Appeals from United States District Court for the District of Minnesota - Minneapolis

          Before GRUENDER, MURPHY, and KELLY, Circuit Judges.

          GRUENDER, Circuit Judge.

         Erin Caligiuri and Michelle Van de Voorde appeal the district court's[1] order approving a class action settlement and granting attorneys' fees and service awards. Caligiuri argues that the district court abused its discretion by (1) approving the settlement without knowing the final administrative costs or the final amount received by the class, (2) calculating attorneys' fees as a percentage of the total settlement fund without deducting administrative costs, (3) failing to ensure that unclaimed settlement funds would be used to benefit the class, and (4) granting service awards of $10, 000 to each named plaintiff. Van de Voorde joins in Caligiuri's first two arguments. We affirm.

         I. BACKGROUND

         In January 2011, plaintiffs filed a class action against Symantec Corp. and Digital River, Inc. (collectively "Symantec"). Symantec sold download insurance services costing between $4.99 and $16.99. These services allowed purchasers of Norton software to re-download the software beyond sixty days from the date of their purchase. Plaintiffs alleged that Symantec failed to disclose that consumers could use various free alternatives to re-download their Norton software. After the close of discovery, the district court certified a national class comprised of all persons in the United States who purchased the download insurance services between January 24, 2005 and March 10, 2011.

         In April 2015, the parties agreed to settle. The settlement agreement provided that Symantec would pay $60, 000, 000 into a total settlement fund. In addition to this amount, Symantec agreed to pay each named plaintiff up to $7, 500 of any service award approved by the court. Any amount over $7, 500 would be paid from the total settlement fund. To receive reimbursement, class members were required to submit an electronic claim form within thirty days after entry of the final approval order. Class members who submitted an approved claim form would receive reimbursement from the net settlement fund, which consists of the total settlement fund after subtracting attorneys' fees and expenses, administrative costs, and any amount of service awards exceeding $7, 500 per named plaintiff. Approved claimants would receive $50 for each purchase of download insurance services, subject to a pro rata reduction if the total claims exceeded the net settlement fund. If, after distribution of the approved claims, sufficient funds remained to pay at least $2 to each approved claimant, then such funds would be distributed to approved claimants in a second distribution on a pro rata basis. If any funds remained after distribution to approved claimants, the remaining funds would be distributed cy pres to the Electronic Frontier Foundation, a nonprofit digital rights group.

         In October 2015, the district court preliminarily approved the settlement and appointed a settlement administrator. The settlement administrator's direct notice program provided notice of the settlement via e-mail to class members with a known e-mail address and via postcard to class members with an unknown or invalid e-mail address. The e-mail and postcard notices directed the class members to a settlement website containing the electronic claim form.

         The court scheduled a final fairness hearing for January 19, 2016. Before the hearing, the settlement administrator informed the court that, as of January 10, 2016, it had incurred $1, 955, 681.56 in costs and estimated that the total cost of the entire settlement administration would be approximately $2, 420, 681.56. It further stated that it already had received claims for 307, 240 unique purchases.

         In addition, class counsel filed a motion for attorneys' fees, expenses, and service awards. Class counsel requested an award of attorneys' fees of one-third of the total settlement fund, which amounts to $20, 000, 000, as well as reimbursement for $738, 605.19 in litigation expenses. The motion also requested that the court grant service awards of $10, 000 to each of the two named plaintiffs.

         Class members Erin Caligiuri and Michelle Van de Voorde timely objected to the settlement and to class counsel's motion for attorneys' fees and service awards. After the fairness hearing, the district court granted final approval of the settlement, granted class counsel's motion for attorneys' fees, expenses, and service awards, and denied all objections. Caligiuri and Van de Voorde now appeal.

         II. DISCUSSION

         A. ...


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