A recent Law 360 story by Dorothy Atkins, “VW Judge Rips Opt-Out Drivers’ Fee Ask, ‘Lavish Spendings’”, reports that a California federal judge has rejected all but one attorney fee request by consumers who opted out of Volkswagen's $10 billion settlement in multidistrict litigation over its diesel emissions cheats, slashing the sole winning plaintiff's "grossly inflated and unreasonable" fee bid and saying he's "troubled" by counsel's and experts' "lavish spendings."

In a 26-page order, U.S. District Judge Charles R. Breyer rejected a request for more than $620,000 in fees by roughly three dozen attorneys who represented seven opt-out plaintiffs in the litigation.  The judge noted that after a trial and a Ninth Circuit appeal, couple Luke and Kathryn Sanwick were the only opt-out plaintiffs to recover damages that were more than what plaintiffs were found to owe Volkswagen in costs, and their recovery netted them only $249 more than what Volkswagen had offered four years ago.  "The average person would say trial was not an unalloyed success for the plaintiffs," Judge Breyer's order says.

Judge Breyer found that the three plaintiffs who won some damages but netted a loss due to costs owed to Volkswagen weren't entitled to fees, noting that although the plaintiffs had "mild" success at the Ninth Circuit, their appeal "was largely inconsequential." Judge Breyer also reduced the Sanwicks' requested attorney fees by 85% in light of the minimal recovery.

"After over a thousand hours later, all the Sanwicks got was $249 more than what they could have received almost four years ago," the order says.  "That the plaintiffs' attorneys racked up over $620,000 in fees and expenses and prolonged litigation to achieve the same (and arguably, worse) result is breathtaking.  That is, if inflation is considered, the Sanwicks lost $4,462.67 by rejecting Volkswagen's [settlement] offer.  There's no way for the plaintiffs' attorneys to sugarcoat this — their attempt to do so is disingenuous."

Judge Breyer also said when he reviewed counsel's billing records, he was "troubled" by some "lavish spendings of the attorneys and experts," including more than $4,000 in first-class flights, a $250 charge for executive van service for traveling four blocks from a hotel to the federal courthouse, and $185 for an Uber Black SUV.  The judge noted that the plaintiffs' punitive damages expert spent $2,002 at the San Francisco Proper Hotel over two nights and later moved to a less expensive hotel at the Omni, where he spent $342.45 to $454.39 per night.

"Even if there is a basis to recover expert-related expenses (there is not), the court would reject such excessive spendings," Judge Breyer wrote.  "It doesn't take an expert to know that these costs were 'expensive.'"  Judge Breyer denied their requests to send their cases back to their home states to be tried, and the opt-out plaintiffs took their common law fraud claims and claims under the California Consumers Legal Remedies Act to trial.

But a San Francisco jury rejected their request for $373,229 in economic damages and $582 million in punitive damages, and instead awarded four plaintiffs a total of less than $6,000 in economic damages and $100,000 in punitive damages.  After a trip to the Ninth Circuit, the opt-out plaintiffs came away with just over $51,000, while nearly all the plaintiffs ended up having to pay Volkswagen more than $110,000 in litigation costs.

Even so, in March, the opt-out plaintiffs' attorneys asked for more than $623,000 in fees and costs for work done by 30 attorneys from five law firms. Greines Martin Stein & Richland LLP sought $308,795, the Auto Fraud Legal Center sought $54,463 and Knight Law Group LLP, Glaser Weil LLP and the Center for Constitutional Litigation together sought $214,425 in fees and $45,334 in costs.

In April, Volkswagen opposed the requests, arguing in an opposition brief that the five law firms recovered a minuscule fraction of the $580 million they sought on behalf of the consumers and that they didn't prevail in the litigation; therefore, they aren't entitled to fees under the CLRA.  Judge Breyer also said he would have rejected the attorneys' requests for pre-settlement offer fees and costs, but Volkswagen has already agreed to pay them to certain opt-out plaintiffs who recovered damages at trial, even though they netted a loss, which "is more than fair."

Judge Breyer also took issue with numerous billed hours of work, which Volkswagen had argued were "irrelevant, baseless or otherwise deficient," including time plaintiffs' attorneys billed for speaking with reporters, time they spent on unsuccessfully fighting to disqualify Judge Breyer from the case, and time they spent refiling a Ninth Circuit brief that was filed in error.  "They should not be able to recover fees for failing to follow straightforward court rules," the order says.  Judge Breyer also cut fees that cited vague billing entries, and clerical work, and he reduced by half fees billed for "unproductive travel time."