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VW Calls Opt-Out Class Counsel’s Fee Request ‘Excessive’

August 20, 2020 | Posted in : Billing Practices, Expenses / Costs, Fee Request, Fee Shifting, Hourly Billing, Hourly Rates, Lawyering, Litigation Management, Practice Area: Class Action / Mass Tort / MDL, Settlement Data / Terms

A recent Law 360 story by Linda Chiem, “VW Slams Opt-Out Drivers’ ‘Excessive’ Atty Fee Bid,” reports that Volkswagen asked a California federal judge to reject an "excessive" request for more than $1.5 million in fees by lawyers for 52 drivers who opted out of the automaker's earlier settlements in multidistrict litigation over its emissions-cheating scandal in the hopes of taking Volkswagen to trial, but never did.

Volkswagen AG and Volkswagen Group of America Inc. fired back at the request for $1.5 million request in attorney fees and and nearly $200,000 in expenses from Knight Law Group LLP and its co-counsel with respect to 52 opt-out plaintiffs, whose cases were paused ahead of a bellwether trial for the first batch of opt-out plaintiffs that took place earlier this year.

"Knight Law seeks an unwarranted windfall," Volkswagen said in an opposition brief.  "Here, Knight Law seeks to be paid more than $1.725 million for representing 52 plaintiffs whose cases not only never went to trial, but were also stayed from their inception. ... In short, very little happened in plaintiffs' cases, because the court authorized very limited work on these stayed cases."  Knight Law can't try to pass off work it did to prepare for the bellwether trial as work for the 52 opt-out plaintiffs, whose cases didn't even get that far, Volkswagen said.

It accused Knight Law of "mismanagement, overstaffing, mis-staffing and overbilling of plaintiffs' stayed cases" by including nearly 3,000 time entries, submitted by 47 lawyers and one paralegal from seven different law firms, according to the brief. Essentially, Knight Law is seeking to turn its fees request "into an opt-out lawyers' bonanza" that should be flatly rejected, Volkswagen says.

Volkswagen also argued that the inflated hourly rates for the 47 lawyers — ranging from $200 to $1,150 — should be substantially reduced, and that the staggering $193,236 in costs and undefined expenses must be slashed as well.  The automaker also took issue with Knight Law's request to be reimbursed for $8,079 for a private jet to fly two attorneys from Los Angeles to San Francisco, and some $33,713 in travel, lodging and dining expenses in connection with a mediation session that was not attended by any of the 52 opt-out plaintiffs, according to the brief.

"No aspect of counsel's boondoggle even borders on the realm of reasonableness," Volkswagen said. "Because plaintiffs have not met their burden of showing that these charges were 'reasonably necessary' and 'reasonable in amount' they should be disallowed in full."

The 52 drivers are among more than 350 individuals who had opted out of Volkswagen's previous consumer settlements related to the "clean diesel" emissions cheating scandal and their individual actions are lumped into the sprawling MDL overseen by U.S. District Judge Charles Breyer in the Northern District of California.  The court oversaw a bellwether trial in late February and early March — which was split into two phases: one for compensatory, or economic, damages and one for punitive damages — covering the claims of 10 opt-out consumers.

A jury awarded damages to only five of them, awarding compensatory damages ranging from about $582 to more than $3,000 and punitive damages totaling $100,000. But Judge Breyer in April slashed their total punitive damages to $23,000, saying the earlier amount crossed "the line of constitutional impropriety."

And because the judge dismissed the bellwether plaintiffs' claims under California's Song-Beverly Act and Consumer Legal Remedies Act, saying the dismissal applies to all remaining opt-out plaintiffs, there is no viable fee-shifting claim for these 52 individuals who never went to trial.  So they cannot recover any fees from Volkswagen, the company said.  The 52 opt-out plaintiffs subsequently accepted offers from Volkswagen in June — ranging from $17,500 to $85,000 apiece, depending on the year, make and model of their Volkswagen vehicle — to avoid trial, according to court documents.