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Parsons v. Volkswagen of America, Inc.
341 P.3d 662
| Okla. | 2014
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Background

  • Hess (class plaintiffs) sued Volkswagen over a cosmetic front-spoiler defect in Jetta vehicles; a nationwide settlement was approved with roughly 2.1 million class members notified. 310 valid claims resulted in $45,780 total payouts (about $140 per claimant); no Oklahoma residents received payouts.
  • Settlement required Volkswagen to pay "reasonable attorneys' fees and expenses." Hess sought ~$15 million; the trial court initially computed a lodestar and awarded $3,610,719.15, reducing for time spent on a failed Florida certification (Sugarman).
  • After the Missouri Supreme Court decided Berry (awarding a multiplier), Hess moved for reconsideration; the trial court readopted its lodestar (without the 5% reduction) and applied a 1.9 multiplier, increasing fees to about $7.2 million.
  • Volkswagen appealed, arguing (1) the trial court improperly included hours from the unrelated, failed Florida Sugarman litigation in the lodestar, and (2) the 1.9 multiplier was unsupported and an abuse of discretion.
  • The Oklahoma Supreme Court reversed: it held inclusion of Florida-only fees was an abuse of discretion and that applying a 1.9 enhancement based largely on Berry and on factors the trial court had earlier found insufficient also was an abuse of discretion; remanded for recalculation.

Issues

Issue Plaintiff's Argument (Hess) Defendant's Argument (Volkswagen) Held
Whether lodestar properly included hours from the failed Florida (Sugarman) litigation Hours from Florida aided prosecution here and thus are compensable Hours attributable solely to the failed Florida certification were unrelated and should be excluded Excluding Florida-only fees was required; including them was an abuse of discretion
Whether a 1.9 multiplier enhancement to the lodestar was appropriate Berry supports applying a substantial multiplier; out-of-state precedent and statutory factors justify enhancement Multiplier was unsupported by record and relied on factors absent here; enhancement produced a fee disproportionate to recovery Applying 1.9 based on Berry and the same factors previously found insufficient was an abuse of discretion
Whether the attorney-fee award bore a reasonable relationship to the recovery Fee awards can be enhanced and should consider awards in similar causes The fees were grossly disproportionate to the actual recovery ($45,780) and thus unreasonable The award was disproportionate; lodestar presumptively adequate and multiplier must be justified by the record
Whether reliance on out-of-state (Berry) precedent mandated enhancement Berry is persuasive and supports enhancement Berry is nonbinding and inapplicable where key supporting factors are absent Reliance on Berry alone and factors not present here was insufficient—enhancement reversed

Key Cases Cited

  • Burk v. City of Oklahoma City, 598 P.2d 659 (Okla. 1979) (establishes lodestar and enhancement analysis factors for fee awards)
  • Berry v. Volkswagen Group of America, 397 S.W.3d 425 (Mo. 2013) (Missouri Supreme Court upheld 2.0 multiplier in class-action fee award)
  • In re Volkswagen & Audi Warranty Extension Litig., 692 F.3d 4 (1st Cir. 2012) (discusses limits on multipliers and relevance of actual claims data to fee enhancements)
  • Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542 (2010) (Supreme Court decisions addressing lodestar enhancements and reasonableness of fee awards)
Read the full case

Case Details

Case Name: Parsons v. Volkswagen of America, Inc.
Court Name: Supreme Court of Oklahoma
Date Published: Dec 16, 2014
Citation: 341 P.3d 662
Docket Number: 111978
Court Abbreviation: Okla.