The Khoday v. Symantec class action settlement was a $60 million all-cash deal resolving claims that Symantec and its e-commerce partner Digital River charged Norton customers for a download “insurance” service that duplicated a benefit they already received for free. Approved claimants received roughly $50 for each qualifying purchase. Final approval came on April 22, 2016, the Eighth Circuit affirmed in April 2017, and distributions wrapped up in early 2018.
What Symantec and Digital River Were Accused Of
Between 2005 and 2011, customers buying Norton software through Symantec’s online store were offered an add-on called “Extended Download Service” or “Norton Download Insurance.” It ran between $4.99 and $16.99 and was pitched as a way to re-download the software if something went wrong with a customer’s computer after the first 60 days.
According to the lawsuit, the re-download capability was already free to every Norton customer for the full one-year license period. The add-on didn’t provide anything extra. Plaintiffs also alleged that Digital River’s checkout system auto-populated shopping carts with the service, so buyers had to actively remove it to avoid the charge, and that pop-up descriptions and sales scripts reinforced the impression that the insurance was necessary.
Who Was in the Class
On March 31, 2014, the U.S. District Court for the District of Minnesota certified a nationwide class covering all U.S. residents who purchased Extended Download Service or Norton Download Insurance between January 24, 2005, and March 10, 2011. The relevant products were sold through Symantec’s online store during that window; typical Norton titles included Norton 360 and Norton Internet Security.
What Class Members Received
Each approved claimant was entitled to $50 per qualifying purchase, subject to a pro rata adjustment if claims exceeded the net fund. With 732,049 claims submitted, the per-claim payout came to approximately $49.82. For most claimants, that was more than they originally paid for the service.
Class members had to file electronically through the settlement website, DownloadInsuranceSettlement.com, by February 18, 2016. Initial checks went out beginning July 28, 2017. A second and final distribution followed on January 31, 2018, paying claimants who had cashed their first checks before the stale date.
How the $60 Million Was Divided
The following amounts were deducted from the gross settlement fund before per-claim distributions:
- Attorneys’ fees of $20 million, or one-third of the total fund.
- Litigation expenses of $738,605.19.
- Administrative costs of approximately $2.42 million.
- Service awards of $10,000 to each named plaintiff. Symantec paid $7,500 of each award directly, and $5,000 in total was deducted from the fund.
Any money left after distributions was designated for the Electronic Frontier Foundation as a cy pres recipient. EFF’s 2018 annual report confirms it received $92,086 in cy pres funds from the settlement during the fiscal year ending June 2018.
The Eighth Circuit Appeal
Two class members, Erin Caligiuri and Michelle Van de Voorde, objected and appealed. They argued the court shouldn’t have approved the settlement without knowing exact administrative costs or the final per-claim payout, that attorneys’ fees should have been calculated from the net fund rather than the gross $60 million, that EFF was not an appropriate cy pres recipient, and that the $10,000 service awards were excessive.
On April 28, 2017, the Eighth Circuit affirmed on all counts in Caligiuri v. Symantec Corp., 855 F.3d 860. The panel found using estimated administrative costs standard for settlement approval, held that circuit precedent permits including administrative costs in the fee benefit calculation, found EFF an appropriate cy pres recipient given its digital consumer rights mission, and upheld the service awards based on the named plaintiffs’ participation in discovery and depositions over five years of litigation.
Where the Case Stands Now
The case is closed. Distributions were completed on January 31, 2018, and no further proceedings have been reported since the Eighth Circuit’s ruling. The claim deadline of February 18, 2016 has long passed, so people who did not file at the time can no longer submit a claim.
Digital River’s Role
Digital River, Inc. operated Symantec’s online store during the class period and was named as a co-defendant. Its checkout system auto-populated carts with the download insurance, and its sales representatives allegedly told customers the service was required to re-download software during the license period. The $60 million settlement was paid jointly by Symantec and Digital River; the specific split between the two companies was not publicly disclosed.