CHICAGO – A U.S. district judge on Tuesday finalized a negotiated settlement of $3.75 million Canadian sex-toy manufacturer Standard Innovation will pay to end a class-action lawsuit brought against its app-controlled We-Vibe products. According to court documents, an estimated 300,000 class members are expected to receive between $20 and $100 apiece, depending upon whether they purchased a vibrator-app combination or a vibrator alone.
The two named plaintiffs, identified only by their initials, will receive $5,000 each.
Two attorneys with the Chicago law firm Edelson P.C., however, will receive more than $500,00 each for representing the class. The approved fee is only slightly less than the $1.12 million the firm requested.
U.S. Magistrate Judge Michael T. Mason, who was tasked with reviewing and recommending or denying the proposed settlement, balked at the original distribution, expressing concern about awarding “$550,000 [to each attorney] for just over three months of work.”
The Edelson attorneys filed suit against Standard Innovation in September 2016, alleging the company’s We-Connect smartphone app “monitor[ed], collect[ed], and transmit[ted] … usage information, including the date and time of each use and the selected vibration settings, and transmit[ted] such data — along with the user’s personal email address — to [Standard Innovation’s] servers in Canada.” The lawsuit claimed the practice violated the U.S. Federal Wiretap Act and Illinois privacy laws.
A settlement agreement was filed in March 2017, but Mason noted in his report that the agreement emerged from a one-day mediation session in November 2016, only three months after the suit was filed.
The Edelson attorneys said a fee of 33 percent of the settlement amount is customary in class actions. Mason did not quite buy that argument, noting the case did not go to trial and neither side engaged in discovery.
“This is quite different from the typical class-action settlement where the case has been pending for years, the parties have engaged in substantial and costly discovery and motion practice, and counsel has appeared in court many times,” Mason wrote in his report. “Here, plaintiffs’ counsel was not required to produce any discovery, the only motions filed were for the approval of the settlement, and the case settled after a mediation that lasted only one day.
“In light of the circumstances of this case, it seems excessive and unreasonable to award plaintiffs’ counsel fees of $1.12 million when many class members are only receiving $20 for their claims,” he added.
He also urged presiding U.S. District Judge Virginia M. Kendall to require the Edelson attorneys “to submit to the Court an estimate of the number of hours expended on the case to date.” Mason noted the attorneys did not submit such documentation with their fee request.
In the end, Kendall approved the settlement with a slightly amended fees award.
“The Settlement is finally approved as fair, reasonable, adequate, and in the best interests of the Settlement Classes,” she wrote in her decision.
For its part, Standard Innovation appeard relieved the lawsuit is over. As part of the settlement, the company agreed to enhance its privacy notice, increase app security and offer consumers more choices about the information they share.
“With this settlement, Standard Innovation can continue to focus on making new, innovative products for our customers,” the company asserted in a prepared statement.