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Class Counsel Earn $75M in Attorney Fees in Takata Air Bag MDL

December 20, 2018 | Posted in : Class Action, Contingency Fees / POF, Fee Award, Fee Request

A recent Law 360 story by Cara Salvatore, “Class Attys Get $75M Payday in Ford Air Bag Settlement,” reports that a Miami federal judge awarded the full $74.8 million fee sought by lawyers who brokered a settlement with Ford Motor Co. over dangerous Takata Corp. air bags, also granting final approval to the $299 million package.  U.S. District Judge Federico Moreno gave final approval to a deal that will allow Ford to exit consumer economic loss claims over Takata air bags, whose inflators could explode and spew shrapnel at passengers.  The deal will also give class counsel the 25 percent, or $74,775,000, they requested in legal fees.  Ford becomes the seventh carmaker to settle out of the multidistrict litigation; four more still face claims.

“The requested fee actually amounts to less than the benchmark 25 percent of the common fund created·through the settlement, due to the value of the customer support program made available to all class members,” the judge said.  He said that with the customer support, it would be closer to 14 percent of the deal's actual value.  “In addition to the time and labor already devoted to this case, class counsel will be required to expend considerable time and effort over the four-year lifespan of the settlement overseeing and adjusting the outreach program and out-of-pocket claims process for the benefit of class members,” he added.

Judge Moreno made quick work of objections that came up during the approval process, saying they echoed objections “previously overruled when the court approved six prior settlements” in the same sprawling MDL.  In two of those, with Honda and Nissan, Judge Moreno had given class counsel's requested bills a haircut because the settlements were siblings and borrowed so much from each other's work.  Plaintiffs' attorneys received only 20 percent of the settlement fund for each after asking for 30 percent.  So for the Ford deal, the lawyers “preemptively reduced” their request to 25 percent. That proportion was approvable, the judge said.  Each named representative will get $5,000.

"The attorney fees awarded by Judge Moreno — like all prior fee awards in this MDL — are entirely consistent with the law in the Eleventh Circuit," settlement lead counsel Peter Prieto of Podhurst Orseck PA said.  The judge granted preliminary approval in early September.  Under the terms of the deal, Ford will inform affected owners about recalls using an outreach program that contacts class members through snail mail, phone calls, email, internet ads, social media and in-person canvassing, according to the plaintiffs.

Class members can be reimbursed for documented out-of-pocket expenses or up to $500 of undocumented out-of-pocket expenses related to the air bags.  Ford will also provide rental cars to bridge the gap as recalled cars are repaired. Automotive recyclers' claims against Ford were not part of the deal and remain pending.

Honda agreed to a $605 million deal in September 2017, Nissan settled for $98 million in August 2017 and Toyota, Subaru, Mazda and BMW agreed to pay a combined $553.6 million in May 2017.  Four additional carmakers — General Motors LLC, Fiat Chrysler, Volkswagen Group of America and Mercedes-Benz USA LLC -- are still litigating claims against them. The judge held a hearing on their motions to dismiss Dec. 11.

The consumer suits were filed among a broad backlash to the discovery a few years ago that the ammonium nitrate that inflated Takata air bags could mistrigger, blasting chemicals and metal fragments into car interiors. Government officials found three root causes: unnecessarily high internal pressure, a defectively designed moisture seal system and humid environmental conditions.

Takata's inflators have been linked to at least 11 deaths in the U.S., and the company has faced massive global recalls, pled guilty to wire fraud, agreed to pay $1 billion and acknowledged that it lied to convince automakers to buy air bag systems that contained faulty inflators.  In June, the company filed for bankruptcy.  The MDL is In re: Takata Airbag Products Liability Litigation, case number 1:15-md-02599, in the U.S. District Court for the Southern District of Florida.