A recent Law.com story, “VW Lawyers’ Fee Request Won’t Exceed $324M Despite Massive Size of Emission Accord,” reports that lead plaintiffs lawyers who crafted a $14.7 billion settlement with Volkswagen A.G. over its emissions scandal have told a federal judge that they won’t ask for more than $324 million.
In a filing, the lawyers said they hadn’t yet reached a deal on fees with Volkswagen but noted it would be “far below” the U.S. Court of Appeals for the Ninth Circuit’s benchmark of 25 percent, which could give them more than $3.5 billion.
“But this is not an ordinary case, this is not an ordinary settlement, and this will not be an ordinary fee request,” wrote lead counsel Elizabeth Cabraser, a partner at Lieff Cabraser Heimann & Bernstein.
The fee estimate, for 22 law firms appointed to the plaintiffs steering committee, also includes no more than $8.5 million in costs. Plaintiffs lawyers acknowledged that settlement negotiations were a “team effort” given the role that government regulators played.
But their estimate is much more than the $200 million fees requested—and later awarded—to the 31 firms that led a 2013 settlement of consumers of Toyota Motor Corp. who sued over sudden-acceleration defects.
In an emailed statement, Cabraser called the Volkswagen deal a “landmark settlement.” “This was achieved with the leadership of attorneys at more than 20 law firms who worked thousands of hours litigating the case and negotiating one of the largest class action settlements in U.S. history,” she wrote. “Any prospective legal fees—which are subject to the approval of the court—are in addition to the $14.7 billion Volkswagen has already agreed to pay under the terms of its settlement agreements, and will not be deducted from any class member’s recovery amount.”
U.S. District Judge Charles Breyer, who preliminarily approved the Volkswagen settlement last month, has scheduled a final approval hearing for Oct. 18.
Under the settlement, reached on June 28, Volkswagen agreed to provide $10 billion in buybacks, lease terminations, repairs and cash payments to owners and lessees of about 475,000 two-liter diesel vehicles that now have a “defeat device” installed to cheat emissions tests. Another $2.7 billion will go toward a mitigation trust that would fund environmental remediation projects, while $2 billion would be earmarked for investments in zero-emissions technology.
But the fee request promises to be a challenge ahead. In settlement papers, plaintiffs lawyers had indicated they wouldn’t even start negotiating fees until Aug. 12 if no deal had been reached for 85,000 owners and lessees of three-liter diesel vehicles. The fee negotiations also could end up in litigation. The settlement included the provision: “Volkswagen reserves all rights to object to an award of attorney’s fees and/or costs beyond what it believes to be reasonable.”
Regarding Wednesday’s filing, Volkswagen spokeswoman Jeannine Ginivan said in an emailed statement: “Volkswagen is prepared to pay attorneys’ fees that reasonably reflect the work the plaintiffs’ steering committee has undertaken in connection with the 2.0L TDI settlement program. Ultimately, it will be for the court to decide what is reasonable.”
The settlement excludes potentially $18 billion in Clean Water Act penalties, criminal penalties, shareholder cases, lawsuits in foreign countries and claims by owners.
Class members have until Sept. 16 to object to the settlement. Earlier this month, at least 11 advocacy groups lodged complaints with the U.S. Department of Justice over aspects of the deal pertaining to zero-emissions technology investments and environmental mitigation.