In Re Volkswagen & Audi Warranty Extension Litigation
784 F. Supp. 2d 35
D. Mass.2011Background
- This is a federal class action settlement involving VW and Audi oil sludge warranty issues with a designated Settlement Class and an approved settlement agreement.
- Plaintiffs sought attorneys' fees and costs under Fed. R. Civ. P. 23(h) after a March 24, 2011 fairness determination of the settlement.
- The fee motion and related objections were heard before Judge Tauro, with a Special Master providing recommendations prior to the court’s ruling.
- The Agreement of Settlement provides that fees and expenses are paid by Defendants and are not derived from Settlement Class Members' benefits, and formalizes a fee-award process under Federal law when the fees are tied to a private settlement.
- The court found the common fund/discretionary approach appropriate, evaluating either lodestar or percentage-of-the-fund methods, but emphasized a contingent-fee-like analysis given the lack of a single pool.
- The Special Master recommended $30,000,000 in fees and $1,195,234.43 in costs; the court adopted that recommendation and approved total fees and costs of $31,195,234.43.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Governing law for fee award | Federal law governs fee decisions in federal settlement. | State fee-shifting statutes may apply to class actions arising under state laws. | Federal law governs the fee decision. |
| Whether a fund exists to justify POF analysis | Settlement provides a composite benefit fund warranting POF treatment. | No single funded pool; lodestar appropriate. | A fund-like, composite benefit structure supports POF considerations. |
| Method for calculating fees | Apply POF method to reward proportionate value conferred to the class. | Use lodestar as a cross-check or limit the award. | Court uses POF approach, with lodestar cross-check guiding reasonableness. |
| Reasonableness of the awarded fee | Fees are reasonable given benefits to the class and efforts of counsel. | Requested fees are too high relative to estimated value of benefits. | Award of $30,000,000 in fees and $1,195,234.43 in costs reasonable; total approved $31,195,234.43. |
| Delay in ruling and allocation concerns | Postponing ruling could prejudice the fee process. | Await more precise claim counts to value benefits. | Defendants' request to defer ruling denied; fees awarded now. |
Key Cases Cited
- In re TJX Cos. Retail Sec. Breach Litig., 584 F.Supp.2d 395 (D. Mass. 2008) (class settlement review; institutional concerns about class relief)
- In re Tyco Int'l Ltd. Multidistrict Litig., 535 F.Supp.2d 249 (D. N.H. 2007) (fee multipliers and lodestar considerations)
- In re Relafen, 231 F.R.D. 52 (D. Mass. 2005) (fee awards and commons fund observations)
- In re TJX Cos. (precedential discussion), 584 F.Supp.2d 395 (D. Mass. 2008) (institutional concerns about the class action vehicle)
- Weinberger v. Great N. Nekoosa Corp., 925 F.2d 518 (1st Cir. 1991) (principles for fee shifting in private settlements)
- Mann & Co. PC v. C-Tech Indus., Inc., 2010 WL 457572 (D. Mass. 2010) (administrative considerations in fee petitions)