For purchasers of the original Apple iPhone 4 who survived “Antenna-gate,”  there is good news: Apple has agreed to settle the class action brought over the poor antenna reception of the iPhone 4 and will be offering consumers a $15 cash payment or a free bumper/case to rectify the problem.   Affected consumers will have four (4) months to file claims under the settlement to receive their cash payment , once Notice has been provided.

 The Long Road to Settlement

The multi-plaintiff class action lawsuit against Apple involved the poor quality and reception of the mobile antenna of the iPhone 4, which users may remember was released in June of 2010 (the problem was fixed by the time the Apple iPhone 4GS was released). The settlement was the culmination of nearly two years of litigation which combined 18 separate lawsuits from across the nation, and five additional lawsuits in California alone, into a single dispute heard before the United States District Court for the Northern District of California, presided over by California-native Judge Ronald M. Whyte.  In the settlement papers, Apple continued to assert that it “vigorously contested” the claims alleged, but was “entering into the Settlement to avoid burdensome and costly litigation.”  According to the attorneys for the class, more than 21 million owners will be eligible to participate in the settlement.  If each and every single owner files a claim (an unlikely scenario), Apple’s tab could reach $315 million.

 Class Action Settlements: A Primer

Generally, once parties enter into class action settlements, the court overseeing the lawsuit must approve the terms of the settlement and provide a hearing process for class action claimants who do not agree with the terms of the proposed settlement.  First, a hearing is usually set for the Court to approve the settlement on a preliminary basis.  From there, individuals who are included as settlement class members (whether they are automatically included, or must specifically “opt-in,”) are given notice of the settlement and proceedings, sometimes through email, publication, mail notice, or other means.  Individuals who do not wish to agree by the terms of the settlement may “opt-out” and bring their own claim, or file an “Objection” and attend the Fairness Hearing to voice their objections to the settlement.   Once the class claim process begins, there is an established period of time in which individuals may “make a claim,” usually by completing paperwork and submitting it to a claims administrator.  A claim administrator then processes all of the claims, one at a time, and resolves each claims in the manner determined by the settlement agreement.  Sometimes, this can involve the payment of cash, coupon, or other mechanism. 

 The Apple iPhone Settlement: Next Steps

In this case, the settlement was reached in late January, presented to the Court for approval on February 10, 2012 and successfully approved.  According to the terms of the settlement, class members will be entitled to receive a $15 cash payment if they meet the requirements and submit a completed Claim Form, which will ask for their names, addresses, and the serial numbers of their iPhones, and require them to certify that they: 1) had antenna problems with the iPhone 4; 2) unsuccessfully attempted troubleshooting steps on the Apple website; 3) could not have returned their iPhone without incurring any costs, and 4) were unwilling to use a case or a free bumper for their iPhone 4, which allegedly would have minimized the poor antenna-reception problems.  Consumers who no longer own their iPhone are also given an option to contact Apple to verify their prior ownership.  Alternatively, consumers may obtain a free bumper in lieu of the cash payment.

Apple will be giving Notice to all potential class members by April 30, 2012 by publishing ads in MacWorld magazine and USA Today.  All iPhone 4 purchasers who are registered in Apple’s warranty registration database will also be receiving an email copy of the Notice.  Once notice is provided, settlement class members will have approximately four months (120 days) to submit a claim.  Claim forms will be available on the website (not active yet). Claims that are submitted will be processed by third-party administrator Kurtzman Carson Consultants, which has administered several other high-profile class settlements, such as those involving Blue Cross Blue Shield, California Pizza Kitchen, Deloitte & Touche, and others.

 For class members who object and do not agree with the settlement, the Notice will specify the dates by which Objections must be filed, and the date of the Fairness Hearing.  Class members who do nothing will automatically be a part of the settlement class, but will not receive a cash payment unless they file a valid and timely Claim Form.