In re: Volkswagen "Clean Diesel" Marketing, Sales Practices, and Products Liability Litigation, 3:15-md-02672

Background

In 2009–2015 Volkswagen sold nearly 600,000 TDI diesel vehicles in the U.S. that used a software "defeat device" to evade EPA/CARB emissions tests; Volkswagen admitted wrongdoing.
Bosch was alleged to have developed/supplied the defeat-device software and to have known of Volkswagen’s illicit use; Bosch denies liability.
Plaintiffs consolidated consumer and reseller dealer claims in the MDL; extensive discovery and court-appointed leadership and a settlement master (Robert S. Mueller III) facilitated negotiations.
Plaintiffs and Bosch agreed a non-reversionary $327.5 million Bosch Settlement Fund to compensate owners/lessees of eligible 2.0L and 3.0L TDI vehicles; allocation between 2.0L and 3.0L classes was determined by the FTC.
Class notice was widely disseminated (mail, email, paid media); 640 opt-outs and four objections were timely received.
The Court granted final approval, certified the settlement class, approved counsel’s fee request, enjoined non-opt-outs from pursuing Released Claims in other forums, and retained jurisdiction to administer the settlement.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the class should be finally certified under Rule 23	Class meets numerosity, commonality, typicality, adequacy; settlement-only certification justified given notice and counsel’s investigation	Bosch disputed liability and could have challenged certification, but did not prevent settlement	Court certified the settlement class under Rules 23(a) and 23(b)(3) and found notice adequate
Whether the settlement is fair, reasonable, and adequate (Rule 23(e))	Settlement provides substantial, immediate relief combined with Volkswagen settlements; avoids significant litigation risk and uncertainty	No explicit position that settlement is unfair; Bosch did not admit liability and maintained defenses, creating litigation risk	Court applied Churchill factors and, under heightened review for pre-certification settlements, concluded the settlement is fair, adequate, and reasonable
Whether signs of collusion (Bluetooth factors) invalidate the settlement	Class Counsel negotiated at arm’s length with a neutral settlement master; fee award is reasonable and not disproportionate; no clear‑sailing or reversion to defendant	Bosch negotiated settlement but did not agree to attorneys’ fees amount or a separate fee payment arrangement	Court found none of the Bluetooth warning signs present, approved fees (15.6% of fund), and found no collusion
Whether an injunction staying state‑court proceedings is warranted under the All Writs Act	Injunction is necessary to protect federal settlement and avoid duplicative litigation over Released Claims; opt-outs preserved	Comity concerns exist but do not outweigh need to protect federal judgment and settlement administration	Court enjoined class members (except timely opt‑outs) from prosecuting Released Claims in other forums to preserve jurisdiction

Key Cases Cited

Allen v. Bedolla, 787 F.3d 1218 (9th Cir. 2015) (strong policy favoring class settlements and court’s fiduciary duty to absent class members)
Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (standard that settlement must be fair, reasonable, and adequate and protections in settlement-only certifications)
Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (need to scrutinize pre-certification settlements to ratify certification and fairness)
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (heightened attention required for settlement-only class certification)
Churchill Vill., L.L.C. v. Gen. Elec., 361 F.3d 566 (9th Cir. 2004) (Churchill factors for assessing settlement fairness)
In re Bluetooth Prods. Liability Litig., 654 F.3d 935 (9th Cir. 2011) (warning signs of collusion in class settlements)
Officers for Justice v. Civil Serv. Comm’n, 688 F.2d 615 (9th Cir. 1982) (court need not resolve merits to approve settlement; evaluate settlement as compromise)
Eisen v. Carlisle & Jacquelin, 417 U.S. 156 (1974) (individual notice required where class members are identifiable)
Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950) (notice must be reasonably calculated to inform interested parties)