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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 PLAINTIFFS' MOTION FOR ATTORNEYS' FEES AND COSTS RELATING TO THE BOSCH 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 TDI diesel engine vehicles sold in the United States. Plaintiffs are a class of vehicle owners impacted by the scandal and allege that Robert Bosch GmbH and Robert Bosch, LLC (collectively, “Bosch”) worked closely with Volkswagen to develop and supply the defeat device. After months of intensive negotiations, Plaintiffs and Bosch reached a settlement, which secures a $327.5 million fund for Plaintiffs and resolves their claims against Bosch. (See Dkt. No. 2837.) In a separate order today, the Court granted Plaintiffs' motion for final approval of the Bosch Settlement. (Dkt. No. 3230.)

         Now before the Court is Class Counsel's motion for $51 million in attorneys' fees and $1 million in costs for common-benefit work performed to obtain the Settlement. (Dkt. No. 3087.) If awarded, the Settlement requires these fees and costs to be paid from the Settlement Fund. (Dkt. No. 2837 ¶ 11.1.) Having considered the relevant briefing, including Class Members' objections, the Court GRANTS Class Counsel's motion. Class Counsel's requested fees amount to 15.6% of the $327.5 million Settlement Fund, which is an appropriate percentage in this case. Class Counsel's requested costs are also reasonable.

         DISCUSSION

         Federal Rule of Civil Procedure 23(h) provides that, “[i]n a certified class action, the court may award reasonable attorneys' fees and nontaxable costs that are authorized by law or by the parties' agreement.” Fed.R.Civ.P. 23(h). “Attorneys' fees provisions included in proposed class action agreements are, like every other aspect of such agreements, subject to the determination whether the settlement is ‘fundamentally fair, adequate and reasonable.'” Staton v. Boeing Co., 327 F.3d 938, 964 (9th Cir. 2003) (citation omitted).

         In “common fund” cases, “a litigant or a lawyer who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney's fee from the fund as a whole.” Id. at 967 (quoting Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980)). To determine the amount of attorneys' fees to be drawn from the fund, the district court may utilize the “percentage method, ” which awards the attorneys a percentage of the fund. Id. (internal quotation marks omitted). The Ninth Circuit's “benchmark” percentage for attorneys' fees in common-fund class actions is 25% of the common fund. Id. at 968. Selection of the benchmark, however, or any other rate “must be supported by findings that take into account all of the circumstances of the case.” Vizcaino v. Microsoft Corp., 290 F.3d 1043, 1048 (9th Cir. 2002). Circumstances include: (1) the results achieved; (2) the risks of litigation; (3) whether there are benefits to the class beyond the immediate generation of a cash fund; (4) whether the percentage rate is above or below the market rate; (5) the contingent nature of the representation and the opportunity cost of bringing the suit; (6) a lodestar cross-check; and (7) reactions from the class. Id. at 1048-52. Considering these factors, the Court concludes that Class Counsel's $51 million fee request is appropriate.

         I. The Vizcaino Factors

         A. Results Achieved

         The Bosch Settlement establishes a non-reversionary fund of $327.5 million, which will be distributed to class members in the 2.0-liter and 3.0-liter Volkswagen settlements pursuant to a formula devised by the FTC. (Dkt. No. 2918 ¶¶ 4, 1, 10.1.) Even if $51 million in fees is subtracted from the fund, the FTC states that, when combined with the remedies provided by the 2.0-liter and 3.0-liter class settlements, the Bosch Settlement will fully compensate consumers for the injuries they suffered from the defeat-device scandal. (Dkt. No. 3184-1.) A recovery that makes the Plaintiffs whole is a great result. And the result was achieved swiftly, as Class Counsel filed its motion for preliminary approval of the Bosch Settlement less than a year after filings its Consolidated Consumer Class Action Compliant. (See Dkt. Nos. 1230, 2838.) Class Counsel thus obtained a full recovery for Plaintiffs in a manner that avoided lengthy and costly additional litigation. This result favors Class Counsel's requested fees award.

         B. Litigation Risk

         Unlike Volkswagen, Bosch has not conceded liability for its role in the defeat-device scandal. Bosch has also advanced competing narratives about a number of factual issues (Dkt. No. 3086 at 20-21), and, in a pending motion to dismiss the complaint of non-settling Volkswagen Franchise Dealers, Bosch has raised challenges to jurisdiction, standing, causation, and damages (Dkt. No. 2864)-defenses that could have potentially been raised here. Additionally, because Class Members have (or will) receive substantial compensation through the Volkswagen settlements for their economic losses associated with the defeat-device scheme, there is a risk that any potential recovery from Bosch would have been offset, partially or entirely, by the funds Class Members already received. And even if the Class secured a judgment against Bosch, Class Members' recovery may have been reduced if Bosch prevailed on an indemnification claim against Volkswagen, as Class Members agreed as part of the Volkswagen settlements to “waive enforcement of [their] judgment against . . . Bosch . . . by the amount of the damages that [Volkswagen is] . . . held to be responsible for by way of indemnification of . . . Bosch.” (Dkt. No. 1685-5 ¶ 6.) Whatever the ultimate merit of these challenges, they demonstrate that continued litigation likely would have been risky. This factor therefore supports Class Counsel's requested fees award.

         C. Non-Monetary Relief

         The Bosch Settlement does not provide Class Members with non-monetary relief beyond that provided by the 2.0-liter and 3.0-liter settlements. This factor consequently does not add weight to the reasonableness of Class Counsel's fee request.

         D. Percentage Rate ...


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