Bluetooth Headset Class Action Settlement Sent Back for Review
By Kimberly Mirando
A class action lawsuit settlement with Motorola, Plantronics and GN Netcom over claims that Bluetooth headsets can cause hearing loss has been returned to the District Court for review after the Ninth Circuit Court of Appeals ruled that the attorneys' fees were disproportionate to the benefits Class Members would receive.
The Bluetooth class action lawsuit, entitled In re: Bluetooth Headset Products Liability Litigation, involved more than 26 putative class action lawsuits filed in courts throughout the country that were eventually consolidated in a California MDL court.
The Plaintiffs in the Bluetooth headset class action lawsuit claimed that they would not have purchased the headsets if they had known that using the devices for more than a few minutes each day would expose them to the risk of noise-induced hearing loss. They sought damages of $70 to $150 per headset, as well as restitution, punitive damages, attorneys' fees and costs.
The MDL court certified a class of all U.S. residents who purchased Bluetooth headsets between 2002 and 2009, and a class action settlement was reached that would require the Defendants to, among other things: (1) post warnings on their websites and in product manuals; (2) pay $100,000 to be divided among non-profits addressing hearing loss prevention issues; and (3) pay attorneys' fees not in excess of $800,000.
An estimated 80 percent of the millions of Bluetooth purchasers were reached by the class action settlement notice plan, with 715 choosing to opt out and 50 choosing to object. As a result, the District Court approved the Bluetooth settlement as fair, reasonable and adequate.
However, a review of the Bluetooth class action settlement by the Ninth Circuit found that the District Court lacked "sufficient basis for determining the reasonableness of the award."
Without commenting on whether the attorneys' fee award was fair or not, the Ninth Circuit wrote, "Absent any explanation from the District Court, we are concerned that the amount awarded was 83.2% of the total amount Defendants were willing to spend to settle the case. Twenty-five percent of this $962,000 fund, by contrast, would have yielded only $240,000 in attorneys' fees."
Attorneys' fees are typically 25% to 30% of the settlement award.
The Ninth Circuit reversed the Bluetooth headset settlement agreement approval "because the parties expressly negotiated a possibly unreasonable amount of fees, and because the District Court did not take this possibility into account in reviewing the settlement's fairness the first time around."
The Bluetooth headset settlement agreement has been returned to the District Court to allow it to make necessary calculations and provide the necessary explanations for the attorneys' fee award.