Jason Hill v. Volkswagen, Ag, 895 F.3d 597

Background

In Sept. 2015 VW admitted installing software “defeat devices” in ~475,000 U.S. 2.0L diesel vehicles that cheated emissions tests; MDL consolidation followed in N.D. Cal.
Plaintiffs’ steering committee and DOJ/FTC participated; by June 2016 VW, the United States, and class counsel negotiated a settlement creating a $10.033 billion fund to buy back or repair cars and pay restitution.
Settlement options varied by status: eligible owners (pre‑9/18/2015) got buyback or fix plus at least $5,100 restitution; eligible new owners got half that amount; eligible sellers (sold between 9/18/2015 and 6/28/2016) got half-owner restitution (~$2,550).
Any unclaimed funds from the $10.033B pool would revert to VW; notice and a claims process were established, with opt-out and objection deadlines before final approval.
The district court certified the class, conducted a detailed fairness review, approved the settlement, and later denied a tardy opt-out by Tori Partl; several objectors appealed.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Adequacy of representation for “eligible sellers” at certification	Johnson: sellers were undercompensated (half restitution) and conflicted with owners; named reps (mostly owners) couldn’t protect sellers’ interests	VW/PSC: sellers benefited from owners’ leverage; sellers’ individual claims were weak; combined class was efficient	Court: No abuse of discretion. Sellers gained substantial, sensible compensation; no irreconcilable intra-class conflict requiring subclasses
Settlement fairness / reversion clause (possible collusion)	Objector: reversion to VW undermines fund value and incentivizes low participation, suggesting collusion and improper fee basis	VW/PSC: DOJ consent decree and fines give VW incentive to maximize buybacks/fixes; high participation and large per-member benefits reduce reversion risk	Court: No abuse of discretion. District court adequately explained why reversion did not indicate collusion given strong participation and external enforcement incentives
Timing and notice of class counsel’s fee motion	Objectors: fee motion not filed before settlement-objection deadline; inadequate notice (posted online only) impaired class members’ ability to object meaningfully	VW/PSC: Rule 23(h) requires opportunity to object to the fee motion when filed; district court gave six weeks after filing—adequate	Court: Separating settlement approval from later fee motion does not violate Rule 23(h); six-week objection window was reasonable. Notice-of-fees challenge is for fee-appeal, not to undo settlement
Late opt-out by Tori Partl	Partl: she intended to opt out and filed shortly after discovering deadline was missed; excusable neglect warrants allowing late opt-out	VW/PSC: Notice was clear; Partl (and counsel) received the long-form notice and failed to follow the clear mail-opt-out procedure by the deadline	Court: No abuse of discretion. Partl had actual notice of correct procedure; her mistake was not excusable neglect under Silber factors

Key Cases Cited

Staton v. Boeing Co., 327 F.3d 938 (9th Cir. 2003) (heightened review when settlement precedes certification)
Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997) (need for undiluted attention to certification and potential intra-class conflicts)
Hanlon v. Chrysler Corp., 150 F.3d 1011 (9th Cir. 1998) (factors for reviewing settlement fairness and adequacy)
In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011) (warning signs of collusion: clear‑sailing, reversions, fee issues)
Officers for Justice v. Civil Service Comm’n, 688 F.2d 615 (9th Cir. 1982) (non‑exhaustive list of settlement review factors)
In re Mercury Interactive Corp. Sec. Litig., 618 F.3d 988 (9th Cir. 2010) (Rule 23(h) requires opportunity to object to actual fee motion)
Silber v. Mabon, 18 F.3d 1449 (9th Cir. 1994) (factors for excusable neglect in late opt‑outs)
Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507 U.S. 380 (1993) (standards for excusable neglect)