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In re Volkswagen "Clean Diesel" Marketing, Sales Practices, and Products Liability Litigation

United States District Court, N.D. California

May 17, 2017

IN RE VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION This Order Relates To: ALL ACTIONS (except the securities action)

          ORDER GRANTING FINAL APPROVAL OF THE CONSUMER AND RESELLER DEALERSHIP 3.0-LITER CLASS ACTION SETTLEMENT

          CHARLES R. BREYER, United States District Judge

         In the fall of 2015 the public learned of Volkswagen's deliberate use of a defeat device- software designed to cheat emissions tests and deceive federal and state regulators-in nearly 600, 000 Volkswagen-, Porsche-, and Audi-branded turbocharged direct injection (“TDI”) diesel engine vehicles sold in the United States. Litigation quickly ensued, and those actions were consolidated and assigned to this Court as a multidistrict litigation (“MDL”). After months of intensive negotiations and with the assistance of a court-appointed settlement master, Plaintiffs and Defendants Volkswagen AG (“VWAG”); Volkswagen Group of America, Inc. (“VWGoA”); Audi AG; Porsche AG; and Porsche Cars North America, Inc. (“PCNA”) (collectively, “Volkswagen” or “Defendants”) reached a settlement that resolves consumer claims concerning certain 3.0-liter diesel TDI vehicles. (See Dkt. No. 2894.) The Court preliminarily approved the Settlement on February 16, 2017. (See Dkt. No. 2919.)

         Settlement Class Counsel now move for final approval of the Settlement. (Dkt. No. 3088.) On May 11, 2017, the Court held a fairness hearing regarding final approval, during which three Class Members or attorneys for Class Members addressed the Court. Having considered the parties' submissions, and with the benefit of oral argument, the Court GRANTS final approval of the Settlement. The Settlement is fair, reasonable, and adequate.

         BACKGROUND

         I. Factual Allegations

         Over the course of six years, Volkswagen sold nearly 600, 000 Volkswagen-, Audi-, and Porsche-branded TDI “clean diesel” vehicles, which it marketed as being environmentally friendly, fuel efficient, and high performing. Unbeknownst to consumers and regulatory authorities, Volkswagen installed in these cars a software defeat device that allowed the vehicles to evade United States Environmental Protection Agency (“EPA”) and California Air Resources Board (“CARB”) emissions test procedures. The defeat device senses whether the vehicle is undergoing emissions testing or being operated on the road. During emissions testing, the defeat device produces regulation-compliant results. When the vehicle is on the road, the defeat device reduces the effectiveness of the vehicles' emissions control system. Only by installing the defeat device on its vehicles was Volkswagen able to obtain Certificates of Conformity from EPA and Executive Orders from CARB for its 2.0- and 3.0-liter diesel engine vehicles; in fact, these vehicles release nitrogen oxides at a factor of up to 40 times over permitted limits.

         II. Procedural History

         Consumers filed hundreds of lawsuits nationwide after Volkswagen's use of the defeat device became public. On December 8, 2015, the Judicial Panel on Multidistrict Litigation (“JPML”) transferred 56 related actions, including numerous putative class actions, to this Court for coordinated pretrial proceedings in the above-captioned MDL. (Dkt. No. 1.) The JPML has since transferred an additional 1, 349 tag-along actions to the Court. (Dkt. No. 3175.) Many MDL cases have also been filed directly in this Court. In January 2016, the Court appointed Elizabeth J. Cabraser of Lieff, Cabraser, Heimann & Bernstein, LLP as Lead Plaintiffs' Counsel and Chair of the Plaintiffs' Steering Committee (“PSC”), to which the Court named 21 other attorneys. (Dkt. No. 1084.) On September 2, 2016, Class Counsel filed its Amended Consolidated Consumer Class Action Complaint against 13 named defendants: VWAG; VWGoA; Audi AG; Audi of America, LLC; Porsche AG; PCNA; Martin Winterkorn; Mattias Müller; Michael Horn; Rupert Stadler; Robert Bosch GmbH; Robert Bosch, LLC; and Volkmar Denner. (Dkt. No. 1804.) The complaint asserts against Volkswagen claims under (1) the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1962(c)-(d), and the Magnusson-Moss Warranty Act, 15 U.S.C. § 2301 et seq.; (2) state fraud, breach of contract, and unjust enrichment laws; and (3) all fifty States' consumer protection laws. Class Counsel also filed a Second Amended Consolidated Reseller Dealership Class Action Complaint against the same 13 defendants; that complaint asserts against Volkswagen RICO, fraud, failure to recall/retrofit, and unjust enrichment claims. (Dkt. No. 1805.)

         The MDL also includes actions brought by federal and state government entities. The United States Department of Justice (“United States”) on behalf of EPA sued VWAG, VWGoA, Audi AG, Porsche AG, Volkswagen Group of America Chattanooga Operations, LLC (“VW Chattanooga”), and PCNA for claims arising under Sections 204 and 205 of the Clean Air Act, 42 U.S.C. §§ 7523 and 7524. The Federal Trade Commission (“FTC”) also brought an action against VWGoA pursuant to Section 13(b) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §53(b), for violations of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). Additionally, the State of California, on behalf of the People and CARB, sued VWAG, VWGoA, Audi AG, Porsche AG, VW Chattanooga, and PCNA for violations of the Consumer Financial Protection Act, 12 U.S.C. § 5536, and various California state laws.

         In January 2016, the Court appointed former Director of the Federal Bureau of Investigation Robert S. Mueller III as Settlement Master to oversee settlement negotiations. (Dkt. No. 973.) The parties and government entities subsequently engaged in extensive negotiations, which, in September and October 2016, resulted in the Court approving settlements and consent decrees between Volkswagen and (1) consumers who purchased or leased 2.0-liter diesel engine vehicles (Dkt. No. 2102); (2) the Volkswagen-branded dealerships (Dkt. No. 2807); and (3) EPA, the FTC, and CARB with respects to claims relating to the 2.0-liter diesel engine vehicles (Dkt. Nos. 1801; 2103-04). Today in separate orders, the Court also (1) approved the United States' Second Partial Consent Decree, which together with an unopposed and previously granted Third Partial Consent Decree (Dkt. No. 3155), fully resolves the United States' claims against Volkswagen relating to the 3.0-liter vehicles, and partially resolves California's claims for injunctive relief with respect to the 3.0-liter vehicles (Dkt. No. 3228); (2) entered the FTC's Amended Partial Stipulated Order for Permanent Injunction and Monetary Relief, which resolves the FTC's claims related to the 3.0-liter vehicles (Dkt. No. 3227); and (3) entered a California-only consent decree, with further resolves certain of the State's claims related to the 3.0-liter vehicles (Dkt. No. 3226).

         The Court granted preliminary approval of the 3.0-liter Settlement on February 16, 2017. (Dkt. No. 2919.) In accordance with the Court's preliminary approval order, Plaintiffs filed a statement regarding their prospective request for attorneys' fees and costs on February 24, 2017 and a motion for final approval on March 24, 2017. (Dkt. Nos. 2970, 3088.) The Notice Administrator implemented the court-approved Notice Program beginning February 16, 2017, by sending email notice to potential Class Members, and on February 24, 2017, the Notice Administrator mailed Notice of the proposed Settlement to potential Class Members by first class mail. (Dkt. No. 3190-3 ¶¶ 10-12; Dkt. No. 3190-4 ¶¶ 8-15.) By April 14, 2017, there were 32 timely objections and 593 opt outs. (Dkt. No. 3190 at 6.)

         SETTLEMENT TERMS[1]

         The key provisions of the Settlement are as follows.

         I. The Settlement Class

         The proposed Settlement Class consists of:

a nationwide class, including Puerto Rico, of all persons (this includes individuals who are United States citizens, residents, United States military, diplomatic personnel and employees living or stationed overseas, as well as entities) who, (1) at any time between September 18, 2015 and November 2, 2015, inclusive, owned or leased a Volkswagen, Audi, or Porsche 3.0-liter TDI vehicle in the United States or its territories (an “Eligible Vehicle, ” defined more fully in Section 2.40); or who (2) between November 3, 2015 and the Claim Submission Deadline for Eligible Owners and Lessees, inclusive, become the owner of an Eligible Vehicle in the United States or its territories; or who (3) own an Eligible Vehicle in the United States or its territories at the time of participation in the 3.0-liter Class Action Settlement Program. The Class includes Non-Authorized Dealers who otherwise meet the definition of the Class.
The following entities and individuals are excluded from the Class:
(a) Owners who acquired an Eligible Vehicle after September 18, 2015, and sold it before November 2, 2015;
(b) Owners who acquired an Eligible Vehicle after November 2, 2015, and transferred title on or before January 31, 2017;
(c) Lessees of a Generation One Eligible Vehicle leased from a leasing company other than VW Credit, Inc., and lessees of a Generation Two Eligible Vehicle leased from a leasing company other than VW Credit, Inc. or Porsche Financial Services, Inc.;
(d) Owners whose Eligible Vehicle had a Branded Title of Assembled, Dismantled, Flood, Junk, Rebuilt, Reconstructed, or Salvage on September 18, 2015, and was acquired from a junkyard, salvage yard, or salvage dealer after September 18, 2015;
(e) Owners who sell or otherwise transfer ownership of their Eligible Vehicle after January 31, 2017 but on or before the Opt-Out Deadline, unless the Eligible Vehicle is (i) unintentionally damaged after January 31, 2017, in a manner that renders it a total loss (i.e., “totaled”) and (ii) transferred to an insurance company or otherwise permanently removed from commerce;
(f) Defendants' officers, directors and employees; Defendants' affiliates and affiliates' officers, directors and employees; their distributors and distributors' officers, directors and employees; participants in Volkswagen's Internal Lease Program and/or Porsche Associate Lease Program; and Authorized Dealers and Authorized Dealers' officers and directors;
(g) Judicial officers and their immediate family members and associated court staff assigned to this case; and
(h) All those otherwise in the Class who or which timely and properly exclude themselves from the Class as provided in this 3.0-liter Class Action Agreement.

(Dkt. No. 2894 ¶ 2.23.)

         An Eligible Vehicle under the Settlement means:

the Model Year 2009 through 2016 Volkswagen and Audi and Model Year 2013 through 2016 Porsche light-duty vehicles equipped with 3.0-liter TDI engines that (1) are covered, or purported to be covered, by the EPA Test Groups in the table [in paragraph 2.40]; (2) are, at any point during the period September 18, 2015 to January 31, 2017, registered with a state Department of Motor Vehicles or equivalent agency, or owned by a Non-Authorized Dealer in the United States or its territories that (a) holds title to the vehicle or (b) holds the vehicle by bill of sale; and (3) have not been modified pursuant to an Approved Emissions Modification. Eligible Vehicle also excludes any Volkswagen, Audi, or Porsche vehicle that was never sold or registered in the United States or its territories. A vehicle must be Operable to be considered an Eligible Vehicle for the purpose of the Buyback, Trade-In, Reduced Emissions Modification, or Emissions Compliant Repair.

(Id. ¶ 2.40.)

         Class Members are further categorized as Eligible Lessees, Eligible Former Lessees, Eligible Owners, and Eligible Former Owners.

         An Eligible Lessee is:

(1) the current lessee or lessees of an Eligible Vehicle with a lease issued by VW Credit, Inc. (Generation One vehicles) or VW Credit, Inc. or Porsche Financial Services, Inc. (Generation Two vehicles); (2) a former lessee or lessees of an Eligible Vehicle who had an active lease issued by VW Credit, Inc. (Generation One vehicles) or VW Credit, Inc. or Porsche Financial Services, Inc. (Generation Two vehicles) as of September 18, 2015 and/or November 2, 2015 and who surrendered or surrenders the leased Eligible Vehicle under the terms of the lease after January 31, 2017, but before the Claim Submission Deadline; or (3) the owner of an Eligible Vehicle who had an active lease issued by VW Credit, Inc. (Generation One vehicles) or VW Credit, Inc. or Porsche Financial Services, Inc. (Generation Two vehicles) as of September 18, 2015 and/or November 2, 2015, and acquired ownership of the previously leased Eligible Vehicle at the conclusion of the lease after January 31, 2017. For avoidance of doubt, no person shall be considered an Eligible Lessee by virtue of holding a lease issued by a lessor other than VW Credit, Inc. or Porsche Financial Services, Inc.

(Id. ¶ 2.38.)

         An Eligible Former Lessee is:

a lessee who leased an Eligible Vehicle from VW Credit, Inc. (Generation One vehicles) or VW Credit, Inc. or Porsche Financial Services, Inc. (Generation Two vehicles) as of September 18, 2015 and/or November 2, 2015, and who surrendered the leased Eligible Vehicle under the terms of the lease on or before January 31, 2017.

(Id. ¶ 2.35.)

         An Eligible Owner is:

the owner or owners of an Eligible Vehicle on September 18, 2015, or the owner or owners who acquire an Eligible Vehicle after September 18, 2015, but before the end of the Settlement Benefit Period, except that the owner of an Eligible Vehicle who had an active lease issued by VW Credit, Inc. (Generation One vehicles) or VW Credit, Inc. or Porsche Financial Services, Inc. (Generation Two vehicles) as of September 18, 2015 and/or November 2, 2015, and purchased that previously leased Eligible Vehicle off lease after January 31, 2017, shall be an Eligible Lessee. For avoidance of doubt, an Eligible Owner ceases to be an Eligible Owner if he transfers ownership of the Eligible Vehicle to a third party. A third party who acquires ownership of an Eligible Vehicle thereby becomes an Eligible Owner if that third party otherwise meets the definition of an Eligible Owner, unless the third party acquired the Eligible Vehicle from an Eligible Lessee, in which case that third party will be an Eligible Lessee. An owner of an Eligible Vehicle will not qualify as an Eligible Owner while the Eligible Vehicle is under lease to any third party, although any such owner, including any leasing company other than VW Credit, Inc. or Porsche Financial Services, Inc., who otherwise meets the definition of an Eligible Owner would become an Eligible Owner if such lease has been canceled or terminated and the owner has taken possession of the vehicle. In exceptional cases, specific arrangements may be made with the leasing company, in consultation with the Claims Supervisor, such that, (1) without canceling or terminating the lease, the leasing company may be treated as an Eligible Owner and obtain (a) an Emissions Compliant Repair plus Lessee Repair Payment or (b) a Reduced Emissions Modification plus Owner Restitution, as appropriate, and (2) a lessor that takes possession of a leased Eligible Vehicle after the Claim Submission Deadline (or the end date of the Claim Program) may nonetheless be entitled to submit a Claim.

(Id. ¶ 2.39.)

         An Eligible Former Owner is:

a person who purchased or otherwise acquired ownership of an Eligible Vehicle on or before September 18, 2015, and sold or otherwise transferred ownership of such vehicle after September 18, 2015 but on or before January 31, 2017, or who acquired ownership of an Eligible Vehicle on or before November 2, 2015, and sold or otherwise transferred ownership of such vehicle after November 2, 2015 but on or before January 31, 2017. For avoidance of doubt, a sale or transfer of ownership under this definition includes the transfer of ownership of an Eligible Vehicle to an insurance company.

(Id. ¶ 2.36.)

         II. Consumer Remedies

         Class Members may seek benefits under the Settlement during the Settlement Benefit Period, which runs from the entry of this Order until (1) September 30, 2019 for Generation One vehicles, or (2) April 30, 2020 for Generation Two vehicles.[2] (Id. ¶ 2.84.)

         A. Generation One (Model Years 2009-2012)

         Class Members who own or lease a Generation One vehicle have three possible options under the Settlement: (1) Buyback / Lease Termination; (2) Trade-In; or (3) if approved by the EPA and CARB, an emissions modification that would reduce the vehicle's emissions but not to the levels of their original certification (a “Reduced Emissions Modification”). Eligible Former Lessees and Eligible Former Owners are entitled to restitution.

         1. Buyback / Lease Termination

         The first option for Generation One vehicle owners is to receive a Buyback payment that consists of Vehicle Clean Trade Value (or Vehicle Value) plus Owner Restitution. For Class Members electing the Buyback option, the total payment will range from $24, 755 to $57, 157. (Dkt. No. 3088 at 22-23.)

         Vehicle Value is the Base Clean Trade Value adjusted for certain options and, in the case of Eligible Owners and Former Owners, for mileage. (Dkt. No. 2894-1 at 7 ¶ 15.) Base Clean Trade Value for each Eligible Vehicle refers to the Clean Trade value corresponding to that vehicle in the September 2015 National Automobile Dealers Association (“NADA”) Used Car Guide, published in or around August 2015. (Id. ¶ 14.) Options adjustments are based on Volkswagen or Audi original equipment manufacturer (“OEM”)-installed options that are valued in the September 2015 NADA Used Car Guide. (Id. ¶ 16.) Mileage adjustments are made using the mileage adjustment table in the September 2015 NADA Used Car Guide. (Id. ¶ 17.)

         Owner Restitution is composed of a fixed dollar amount that is the same for all Generation One Eligible Vehicles (the “fixed component”), and a variable dollar amount (the “variable component”). (Id. at 3 ¶ 8(i).) Owners who acquired a new vehicle at any point in time or a used vehicle on or before September 18, 2015 will receive a fixed component of $5, 155 and a variable component consisting of (1) the amount by which Vehicle Clean Retail Value exceeds Vehicle Value, plus (2) state and local taxes on the Vehicle Clean Retail Value. (Id.) If Owner Restitution would otherwise be less than $6, 000, the variable component will include an additional amount sufficient to raise Owner Restitution to $6, 000. (Id.) Owners who acquired a used vehicle after September 18, 2015 will receive the same amount just described unless (1) one or more Eligible Former Owners timely file a valid claim related to the same vehicle, or (2) the Eligible Vehicle was previously leased by someone else and the Eligible Former Lessee timely files a valid claim.

         (Id.) In such instances, Owner Restitution will be half the amount described above.

         The table below provides an illustrative Buyback calculation. (See Dkt. No. 2894-1 at 4.) As noted above, a Buyback payment includes Vehicle Clean Trade Value (or Vehicle Value) plus Owner Restitution. Vehicle Value below is $22, 825, assuming standard mileage. Owner Restitution consists of the fixed component of $5, 155 plus the variable component consisting of (1) the amount by which Vehicle Clean Retail Value ($25, 550) exceeds Vehicle Value ($25, 550 -$22, 825 = $2, 725), plus (2) the appropriate state and local tax rate multiplied by the Vehicle Clean Retail Value (6.35% of $25, 550 = $1, 622.43). The variable component thus equals $4, 347.43, and Owner Restitution totals $9, 502.43 (or $5, 155 $4, 347.43). In this example, the total Buyback amount is $32, 327.43 (or $22, 825 $9, 502.43).

Vehicle ID

100001

Description

2009 Q7 TDI Premium Plus

Vehicle Value

$22, 825 (assumes standard mileage)

Vehicle Clean Retail Value

$25, 550 (assumes standard mileage)

State and Local Tax Rate

Connecticut 6.35%

Tax on Vehicle Clean Retail Value

6.35% of $25, 550 = $1, 622.43

Difference between Vehicle Clean Retail Value and Vehicle Value

$25, 550 - $22, 825 = $2, 725

Owner Restitution

$5, 155.00 [fixed component] $4, 347.43 [variable component: amount by which Vehicle Clean Retail Value exceeds Vehicle Value ($2, 725), plus tax ($1, 622.43)] $0 [amount necessary to bring total Owner Restitution to $6, 000] = $9, 502.43

Buyback Amount

$22, 825 $9, 502.43 = $32, 327.43

Minimums

Owner Restitution is greater than $6, 000, and the Buyback Amount is greater than Retail Replacement Value, so the minimums are not implicated.

         Eligible Lessees who have an active lease of a Generation One Eligible Vehicle can terminate their leases with no penalty for early termination and receive Lessee Restitution. (Dkt. No. 2894 ¶ 5.4.) Lessee Restitution ranges from $5, 001 to $6, 615. (Dkt. No. 2840 at 19.) Lessee Restitution consists of a fixed component of $2, 577.50 and a variable component that is one half of (1) the amount by which Vehicle Clean Retail Value exceeds Vehicle Value, added to (2) state and average local sales taxes on the Vehicle Clean Retail Value. (Dkt. No. 2894-1 at 5 ¶ 9(i).)

         2. Trade-In

         Owners of Generation One vehicles can choose to trade in their vehicle at a participating Volkswagen or Audi dealership and receive a Trade-In Credit at the dealer. (Dkt. No. 2894 ¶ 5.3.) The Trade-In Credit will be equal to the Buyback Amount to which that owner would be entitled in a Buyback.

         3. Reduced Emissions Modification

         The availability of this option will depend on whether EPA and CARB approve a Reduced Emissions Modification for a Class Member's Generation One vehicle. (Id. ¶ 5.5.) The expected timeline for Volkswagen to submit proposed Emissions Modifications for Generation One vehicles is set forth in the United States' Second Partial Consent Decree. (See Dkt. No. 2520-1.) If no Emissions Modification is approved for a particular make, model, and model year of Generation One vehicle, Class Members owning or leasing such vehicles will not be able to select a Reduced Emissions Modification. If no Emissions Modification exists, Class Members will be informed that they remain eligible for the Buyback and Trade-In options, and that they may opt out of the Settlement from August 1, 2018 to September 1, 2018. (Dkt. No. 2894 ¶ 2.66.) Owners that receive an approved Emissions Modification will also receive Owner Restitution.

         4. Restitution for Eligible Former Lessees and Eligible Former Owners

         Eligible Former Lessees are entitled to the same Lessee Restitution as Eligible Lessees. (See Dkt. No. 2894 ¶ 5.7; Dkt. No. 2894-1 at 5 ¶ 9.) Eligible Former Owners are entitled to receive Former Owner Restitution. (See Dkt. No. 2894 ¶ 5.8; Dkt. No. 2894-1 at 6 ¶ 10.) There can be no more than two Eligible Former Owners for each Eligible Vehicle. If only one Eligible Former Owner for a vehicle timely files a valid claim, Former Owner Restitution will be one half the amount of Owner Restitution, as calculated above. If two Eligible Former Owners timely file valid claims, Former Owner Restitution for each former owner will be 25% of Owner Restitution.

         B. Generation Two (Model Years 2013-2016)

         The benefits available to Generation Two vehicle owners will depend on whether Volkswagen can timely make available an approved Emissions Compliant Repair. (Dkt. No. 2894 ¶ 6.1.) An Emissions Compliant Repair would bring an Eligible Vehicle into compliance with Certified Exhaust Emissions Standards and must be approved by the EPA and CARB. (Id. ¶¶ 2.41, 2.6.)

         An Emissions Compliant Repair will be considered timely if it is approved (i) on or before the Decision Date for the Sub-Generation to which that Eligible Vehicle belongs, (ii) on or before any subsequent date set by the Court, or (iii) if the Court does not find good cause for the extension, during a 30-day extension period (of which there may be up to three) for which Volkswagen agrees to make a $500 extension payment, per vehicle per extension. (Id. ¶ 6.2; Dkt. No. 2894-3 ¶ 35.) The Decision Dates for an Emissions Compliant Repair for each Sub-Generation of Generation Two vehicles are as follows:

Sub-Generation

Decision Date for the Emissions Compliant Repair

2.1 SUV

November 8, 2017

2.2 SUV

October 23, 2017

2 PC

December 20, 2017

         Volkswagen has agreed that an Emissions Compliant Repair will not result in “Reduced Performance, ” which the Settlement defines as a change in any of the following performance metrics: (1) a reduction in calculated fuel economy using the EPA formula of more than 3 MPG; (2) a decrease of greater than 5% in peak horsepower; or (3) a decrease of greater than 5% in peak torque. (Dkt. No. 2894 ¶ 7.5.) In the event that an Emissions Compliant Repair causes Reduced Performance, Volkswagen has agreed to make an additional payment of $500 for each affected Eligible Vehicle. (Id.) In the event that an Emissions Compliant Repair causes “a substantial, material adverse degradation above and beyond the Reduced Performance levels specified, ” Plaintiffs reserve their right to seek, and Volkswagen reserves its right to oppose, additional remedies through motion to the Court. (Id.)

         In addition to an Emissions Compliant Repair, Eligible Owners and Eligible Lessees of Generation Two vehicles will be offered a Repair Participation Payment, ranging from $7, 039 to $16, 114 for owners, and $2, 000 for lessees. (Dkt. Nos. 3088 at 24; 2894-3 at 27-28.) For Eligible Owners, the Repair Payment will total 10% of the vehicle's September 2015 NADA Clean Retail Value (adjusted for options, but not mileage), plus a fixed dollar amount of $3, 596.74. (Dkt. No. 2894-3 at 27.) Half of the Repair Participation Payment will be made available to Eligible Owners and Eligible Lessees once Volkswagen verifies their claims; the other half will be paid when the Emissions Compliant Repair is made. (Id. at 27-28.) Volkswagen will also offer a “Class Bridge Warranty” to cover Generation Two vehicles through the Emissions Compliant Repair Decision Dates. (Dkt. No. 3088 at 25.) As with Generation One restitution, an Eligible Former Owner of a Generation Two vehicle will evenly split the Repair Participation Payment with a post-September 18, 2015 Eligible Owner, and if there are two Eligible Former Owners, each will receive one quarter of the Repair Participation Payment. (Id.)

         If an Emissions Compliant Repair is not timely approved for any sub-generation of Generation Two vehicles, Class Members associated with those vehicles will have all the rights and options available to Class Members with Generation One vehicles. (Id. at 33-34.)

         III. Distribution of Settlement Payments

         The Settlement requires Volkswagen to create and fund an Escrow Account, which will be used to compensate Class Members who submit valid claims under the Settlement. (Dkt. No. 2894 ¶ 13.1.) The escrow account will be funded with an initial Funding Amount of $252 million. If the funding level reaches the Minimum Balance, which will initially be set at $168 million, Volkswagen must, within seven business days of being notified, deposit additional funds into the Escrow Account to bring the balance of the account back to the Funding Amount. (Id.) The Funding Amount and the Minimum Balance will be adjusted as described in the Settlement depending on whether an Emissions Compliant Repair is available for Generation 2.2 SUV vehicles by October 23, 2017. (Id. ¶¶ 13.2, 13.3.) Any unused funds at the end of the Settlement Benefit Period will revert to Volkswagen. (Id. ¶ 13.4) In the event that the Settlement is invalidated or terminated for any reason prior to conclusion of the Settlement Benefit Period, any unused funds in the Escrow Account will revert to Volkswagen. (Id. ¶ 13.5.)

         IV. Payment of Attorneys' Fees

         The Settlement further requires Volkswagen to pay reasonable attorneys' fees and costs. (Dkt. No. 2894 ¶ 14.1.) Class Counsel have agreed to seek no more than $245 million in combined attorneys' fees and reasonable out-of-pocket costs with respect to the approximately $1.24 billion in monetary benefits that Class Members will receive if all Generation Two vehicles achieve timely Emissions Compliant Repair approval without Reduced Performance. (Dkt. No. 2970 at 3.) If certain events increase Class Members' monetary benefits-such as the delay or denial of an Emissions Compliant Repair for any group of Generation Two vehicles-Class Counsel may move for additional fees and costs in an amount no greater than 5% of the additional monetary benefits made available to Class Members. (Id.) Volkswagen will pay reasonable fees separate from the compensation provided to Class Members and the fees are subject to Court approval. (Dkt. No. 2894 ¶ 14.1.)

         V. Releases

         In exchange for benefits under the Settlement, Class Members agree to release all Released Claims against the Released Parties. The Settlement defines Released Parties as:

any person who, or entity that, is or could be responsible or liable in any way whatsoever, whether directly or indirectly, for the 3.0- liter TDI Matter. The Released Parties include, without limitation, (1) Volkswagen AG, Volkswagen Group of America, Inc. (d/b/a Volkswagen of America, Inc. or Audi of America, Inc.), Volkswagen Group of America Chattanooga Operations, LLC, Audi AG, Audi of America, LLC, VW Credit, Inc., VW Credit Leasing, Ltd., VCI Loan Services, LLC, Porsche Automobil Holding SE, Dr. Ing. h.c. F. Porsche AG, Porsche Cars North America, Inc., Porsche Financial Services, Inc., Porsche Leasing Ltd., and any former, present, and future owners, shareholders, directors, officers, employees, attorneys, affiliates, parent companies, subsidiaries, predecessors, and successors of any of the foregoing (the “VW and Porsche Released Entities”); (2) any and all contractors, subcontractors, and suppliers of the VW and Porsche Released Entities; (3) any and all persons and entities indemnified by any VW and Porsche Released Entity with respect to the 3.0-liter TDI Matter; (4) any and all other persons and entities involved in the design, research, development, manufacture, assembly, testing, sale, leasing, repair, warranting, marketing, advertising, public relations, promotion, or distribution of any Eligible Vehicle, even if such persons are not specifically named in this paragraph, including without limitation all Authorized Dealers, as well as non-authorized dealers and sellers; (5) Claims Supervisor; (6) Notice Administrator; (7) lenders, creditors, financial institutions, or any other parties that financed any purchase or lease of an Eligible Vehicle; and (8) for each of the foregoing, their respective former, present, and future affiliates, parent companies, subsidiaries, predecessors, successors, shareholders, indemnitors, subrogees, spouses, joint ventures, general or limited partners, attorneys, assigns, principals, officers, directors, employees, members, agents, representatives, trustees, insurers, reinsurers, heirs, beneficiaries, wards, estates, executors, administrators, receivers, conservators, personal representatives, divisions, dealers, and suppliers. Notwithstanding the foregoing, this Release does not release any claims against Robert Bosch GmbH and Robert Bosch, LLC or any of its former, present, and future owners, shareholders, directors, officers, employees, attorneys, affiliates, parent companies, subsidiaries, predecessors, or successors unless the Court approves any settlement between Bosch and members of the Class in any way related to, or arising from, the 3.0-liter TDI Matter.

(Dkt. No. 2894 ¶ 12.2.)

         The Released ...


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