A recent NLJ story, “Objectors Fault $324M in Potential Fees in VW Emissions Accord,” reports that more than a dozen objectors have urged a federal judge to reject Volkswagen's $14.7 billion emissions settlement next month — most of them criticizing a potential figure of $324 million — the number which lead plaintiffs attorneys signaled as the cap on their fee request.

The settlement, to which U.S. District Judge Charles Breyer must give final approval on Oct. 18, requires Volkswagen to provide $10 billion to owners and lessees of about 475,000 diesel vehicles that were built with a device installed to cheat emissions tests.  The settlement includes a $2.7 billion fund for environmental remediation projects and $2 billion in zero-emissions technology investments.

Lead plaintiffs attorneys, who haven't reached a deal on attorney fees, told Breyer last month that they wouldn't seek more than $324 million.  That's woefully inadequate to grant final approval of the deal, according to several objectors.

Several objectors said that lead counsel's stated cap of $324 million is too vague to make an adequate assessment on the fairness of the fee request.  They cite the U.S. Court of Appeals for the Ninth Circuit's 2010 decision in In re Mercury Interactive Corp. Securities Litigation, which found that a federal judge improperly forced class members to file objections before lead counsel had submitted a complete fee request.

Objectors in Volkswagen also called the $324 million estimate excessive, particularly given the involvement of the U.S. Department of Justice and the U.S. Federal Trade Commission in settlement negotiations.

Some objectors raised concerns that any unclaimed funds in the settlement would go to Volkswagen, while others noted that their individual lawyers weren't compensated under the deal, forcing them to take a cut to pay for their outstanding attorney liens.

"The proposed settlement agreement divides class members into two separate classes: those who have never been individually represented, and those who have privately retained, as is their right, counsel of their choosing who will now be required to pay attorneys' fees out of their settlement proceeds," wrote Joshua Swigart, a partner at Hyde & Swigart in San Diego.