A recent Law 360 story by Nathan Hale, “Court Oks $42M VW Deal, $12.6M Fee in Takata Air Bag MDL” reports that a Florida federal judge granted final approval to a $42 million settlement automakers Volkswagen and Audi reached to resolve multidistrict litigation over their alleged use of defective Takata Corp. air bags, as well as a $12.6 million attorney fee award from that total. The proposed settlement with Volkswagen Group of America Inc., Audi of America LLC and their affiliates covers 1.35 million vehicles and is modeled on settlements previously approved with seven other automakers, according to the plaintiffs' motion for approval filed in September 2021. The court granted preliminary approval in November 2021 and held a final fairness hearing March 7.
"We are pleased with Judge Moreno's order granting final approval of the VW settlement, and overruling the few objections that were raised, because the order is faithful to Eleventh Circuit precedent," the plaintiffs' chair lead counsel, Peter Prieto of Podhurst Orseck PA, told Law360. "We will continue to litigate against the remaining automakers until there is a resolution or trial." Miami-based U.S. District Judge Federico A. Moreno deemed the settlement agreement fair in all respects over objections from seven class members.
The objections focused primarily on three arguments: an outreach program to encourage drivers to get the parts replaced is ineffective, there is no value for many class members who have already sold their vehicles or gotten them repaired, and class counsel's request for 30% of the settlement fund to cover fees and expenses runs afoul of legal precedents.
Judge Moreno also certified a class for settlement purposes, noting the class consists of more than 1 million members across the U.S, the case involves common questions regarding Volkswagen's alleged activities, and the class representatives have no conflict with the other class members and are represented by experienced class counsel.
The judge appointed Prieto as lead settlement class counsel and also named the following attorneys as settlement class counsel: David Boies of Boies Schiller Flexner LLP, Todd A. Smith of Smith LaCien LLP, Roland Tellis of Baron & Budd PC, James E. Cecchi of Carella Byrne Cecchi Olstein Brody & Agnello PC and Elizabeth J. Cabraser of Lieff Cabraser Heimann & Bernstein LLP. Nine potential class members opted out from the settlement, according to an exhibit attached to the order.
The settlement grants the defendants full release from liability for all economic loss claims asserted against them. The releases also apply to German parent companies Volkswagen AG and Audi AG, which the court dismissed in 2019 for lack of personal jurisdiction, the order noted. Judge Moreno said he disagreed with the objection that the outreach program is redundant or ineffective.
The record, including unchallenged statements the claims administrator made at the fairness hearing, shows similar programs in the first seven settlements have been successful, resulting in more than 9.1 million recalled air bag replacements being completed, the judge said. He also noted the program provides assurances beyond what is required by the National Highway Traffic Safety Administration's recall mandates.
"Far from leaving outreach to the discretion of Volkswagen, the settlement's outreach program mandates that Volkswagen provide massive funding — more than $13 million — for outreach efforts and empowers the settlement special administrator to oversee and administer a dynamic, state-of-the art program," he said. Judge Moreno also refuted claims of intra-class conflicts, saying differences in benefits various class members may receive are common and do not amount to fundamental conflicts that could trip up a deal.
Addressing the fee request, he rejected several objectors' suggestion that the court should apply Florida state law, which applies a lodestar-multiplier method to fee awards. The judge said the class counsel's $12.6 million request, which comes out to as low as 22% of the settlement value — when the value of a customer support program is also taken into account — falls well within Eleventh Circuit precedent.
Some objectors had also argued that because this is the seventh settlement in the multidistrict litigation, the deal should be considered a "mega-fund" along with the previous deals and a lower percentage of fees awarded. But Judge Moreno pointed out the Eleventh Circuit has said it does not reduce fees based on size because that would be "antithetical" to its percentage of the recovery method.