914 F.3d 623
9th Cir.2019Background
- After EPA Notices of Violation, hundreds of consumer suits over Volkswagen "defeat device" emissions were consolidated into MDL No. 2672; Class Counsel (PSC and Lead Counsel) were appointed by the district court.
- Plaintiffs secured a settlement providing >$10 billion to class members and a separate $175 million attorneys'‑fees payment to Class Counsel; Volkswagen agreed to pay Class Counsel fees in addition to class benefits.
- 244 non‑class counsel (law firms/attorneys who had represented individual class members) submitted fee applications asserting entitlement to compensation for pre‑ and post‑MDL work; the district court denied all applications, finding no common‑benefit work and procedural noncompliance with PTOs governing fee recovery.
- The district court had issued PTO No. 11 setting procedures and limiting recoverable “common benefit” work largely to Court‑appointed counsel or those expressly authorized by Lead Counsel.
- The district court also entered, then later vacated, a Lien Order that enjoined state‑court attorney‑lien actions while establishing a submission process for fee applications; Feinman’s appeal of the injunction was mooted by vacatur.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to appeal by non‑class counsel | Non‑class counsel may appeal denial of fee motions because they suffered an injury (denial of fees) | Volkswagen: attorneys lack standing to pursue fee awards vested in clients | Court: non‑class counsel have standing here (not a statutory fee claim) |
| Entitlement to fees for pre‑MDL work | Non‑class counsel claim early filings/efforts materially benefited class and so merit compensation | Volkswagen/Class: early filings didn’t produce unique discoveries or drive settlement; broadly public NOVs prompted filings | Court: no abuse of discretion — record shows no substantial benefit to class from pre‑MDL work |
| Entitlement to fees for post‑appointment work | Non‑class counsel argue post‑appointment client communications/monitoring justified fees | Class/VW: PTOs limited compensable common‑benefit work to appointed/authorized counsel; most post‑appointment work benefited only individual clients | Court: PTOs were valid and non‑class counsel largely didn’t comply; post‑appointment work not compensable |
| Whether Settlement/parties agreed to pay non‑class counsel | Non‑class counsel point to Settlement language and notice suggesting Volkswagen would pay attorneys' fees in addition to class benefits | VW: Settlement specifically limits fee payment to Class Counsel and those designated by Lead Counsel | Court: Settlement does not obligate VW to pay non‑class counsel; no agreement found |
Key Cases Cited
- Pony v. County of Los Angeles, 433 F.3d 1138 (9th Cir. 2006) (attorney standing to appeal statutory fee awards is limited)
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (Article III standing requires injury, causation, redressability)
- In re Cendant Corp. Sec. Litig., 404 F.3d 173 (3d Cir. 2005) (non‑designated counsel entitled to fees only if they create or discover claims or otherwise substantially benefit the class)
- Stetson v. Grissom, 821 F.3d 1157 (9th Cir. 2016) (objectors or non‑class counsel may receive fees when they confer benefit on the class)
- In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (courts must independently ensure reasonableness of fee awards and consider common‑fund/substantial‑benefit doctrines)
- Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240 (1975) (outlining circumstances for fee awards outside the American Rule)
- Vizcaino v. Microsoft Corp., 290 F.3d 1043 (9th Cir. 2002) (objectors/non‑class counsel must substantially benefit the class to recover fees)