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Additional Fees Sought in VW Diesel Emission Case

July 10, 2017 | Posted in : Contingency Fees / POF, Expenses / Costs, Fee Allocation / Splitting, Fee Award, Fee Request, Hourly Rates / Hourly Billing

A recent The Recorder story by Amanda Bronstad, “Lawyers in VW Diesel Emissions Case Seek Additional Fees” reports that lawyers who sued Volkswagen over its diesel emissions scandal could end up with a pretty good return on their investment: After being awarded $175 million in fees and costs, they are asking for an additional $125 million—and it appears there's a good chance they'll get it.

That means a total of nearly $350 million in fees and costs could end up going to the 22 law firms leading the emissions litigation.  The case lasted about a year, mostly in settlement negotiations.

The fees already awarded were related to a $14.7 billion settlement that resolved class actions by consumers of 475,000 vehicles alleging their 2.0-liter diesel engines were rigged to cheat emissions tests.  The latest request ties to a $1.2 billion settlement involving over 75,000 vehicles with 3.0-liter diesel engines.  According to a June 30 motion for fees, Volkswagen agreed to the latest request, which includes $121 million in fees and $4 million in costs.

"In the context of this historic settlement, class counsel's fee request is more than justified," wrote Elizabeth Cabraser of San Francisco's Lieff Cabraser Heimann & Bernstein, who leads the plaintiffs' steering committee.  "So, too, are the requested costs, which are reasonable and were necessary to advance the litigation and settlement expeditiously."

Cabraser leads a team that includes prominent plaintiffs attorneys across the country, including those in New Jersey, New York, Florida, Texas and California.  In a statement, the steering committee noted that the fees would be in addition to the estimated $1.22 billion paid to consumers.

"We negotiated these agreements to hold Volkswagen accountable for its breach of consumer trust, and we hope that all class members choose to take advantage of the benefits detailed in these settlements," they said.

Like the $14.7 billion deal, the latest settlement would provide cash compensation, buybacks, lease terminations and repairs to consumers.  But the cash and repair options differ based on older or new model cars.  If Volkswagen does not provide an adequate fix for the new models by Dec. 20, it has agreed to pay $4.04 billion.  In May, U.S. District Judge Charles Breyer of the Northern District of California approved the deal, which also resolved claims brought by the Federal Trade Commission.

In the fee request, Cabraser noted that the amount was less than 10 percent of the deal's value, far below the 25 percent benchmark established in the U.S. Court of Appeals for the Ninth Circuit.  It's also well below that of other "super-mega-fund" settlements, which average between 13.7 percent and 14.5 percent, according to a declaration provided by William Rubenstein, a professor at Harvard Law School and an expert on class actions.

Partners billed between $250 and $1,650 on the case, which took more than 130,000 hours, according to a declaration submitted by Cabraser.  In addition to the Volkswagen settlements, the same team was awarded $52 million as part of a $327.5 million related deal with Robert Bosch GmbH, which supplied the software installed in the vehicles.

Still, the fees aren't shoo-ins.  In April, Breyer denied 244 motions for fees brought by nearly 60 law firms not on the committee and slashed by 90 percent a $28.5 million request by one committee member, Steve Berman, managing partner of Seattle's Hagens Berman Sobol Shapiro, for work he did on a separate $1.2 billion settlement for Volkswagen franchise dealers.

But there's more emissions litigation in the works.  Cabraser was named lead counsel this month in similar emissions litigation brought against Fiat Chrysler AV.  Most of the lawyers joining her in that case were also on the Volkswagen committee.