SAN FRANCISCO – The U.S. Court of Appeals for the 9th Circuit recently affirmed a district court ruling that determined a group of 244 attorneys seeking to recoup attorneys' fees from a class action suit regarding emission test "defeat devices" in certain Volkswagen an Audi diesel vehicles.
The appeals court, in its Jan. 22 opinion, said that although the attorneys did work on the so-called VW "clean diesel case" as non-class counsel they were not entitled to compensatory claims from their clients.
The 244 attorneys filed the appeal after the U.S. District Court for the Northern District of California ruled that the attorneys were not due compensation from class action that secured a settlement of more than $10 billion and an additional award of $175 million in fees for class counsel.
The appeals court said Federal Rule of Civil Procedure 23, which permits an award of fees when authorized by law or the parties’ agreement, and courts have an independent obligation to ensure that the award, like the settlement itself, is reasonable. But, "because the underlying class action did not feature a traditional common fund from which attorneys’ fees were procured, appellants could only have collected fees if they provided a substantial benefit to the class," the appeals court said. The panel concluded that the "district court did not abuse its discretion when it determined that the efforts of non-class counsel, for which they sought fees, did not benefit the class such that they would be entitled to compensation."
The class action suit was filed by owners of Volkswagen and Audi diesel car owners who claim that the use of "defeat devices" in the vehicles were used to fool emissions tests in the United States. In March 2017, a settlement agreement was made in the class action with Volkswagen agreeing to pay $175 million in attorneys’ fees and costs, separate from the $10 billion granted in the secured settlement in the class action.
In September 2015, the Environmental Protection Agency (EPA) issued a Notice of Violation (NOV) in which it alleged that Volkswagen used “defeat devices” in 500,000 Volkswagen- and Audi-branded TDI “clean diesel” vehicles. According to court documents, in November 2015, the EPA issued a second NOV to Volkswagen and Porsche Cars of North America Inc., which implicated the companies’ 3.0-liter diesel engine vehicles.
In July 2016, a district court granted preliminary approval to plaintiffs in a consolidated consumer class action settlement. The court ruled that “none of the settlement benefits for class members will be reduced to pay attorneys’ fees or to reimburse expenses of class counsel"