Attorneys Awarded $125 Million for Second VW Settlement

SAN FRANCISCO (CN) — A federal judge Friday awarded $125 million in fees and costs to lawyers who secured a second settlement in Volkswagen’s diesel emissions cheating scandal.

U.S. District Judge Charles Breyer approved the $1.2 billion settlement in May, one of two deals worth nearly $16 billion, to settle claims in Volkswagen’s installation of emissions test cheating software in some 580,000 diesel-powered vehicles sold in the United States.

“The settlement not only provides class members with significant value, but class counsel obtained the settlement swiftly,” Breyer wrote in his 7-page ruling. He noted that the second deal was approved less than 18 months after lead class counsel Lieff Cabraser Heimann & Bernstein was appointed by the court.

It was the second big payday for attorneys in the multidistrict consumer class action. Breyer in March awarded counsel $175 million for securing a $14.7 billion deal for 500,000 2.0-liter engine vehicles. In that settlement, Volkswagen agreed to spend $10 billion on vehicle buybacks and emissions-reducing repairs, and $4.7 billion to regulators for air quality improvement programs.

The 3.0-liter engine deal approved in May comes with a value of at least $902 million for consumers, along with payouts to U.S. and California for air pollution mitigation. Under the settlement, Volkswagen could have to pay an extra $4 billion if it can’t come up with regulator-approved, emissions-reducing repairs for 58,000 newer-model cars by deadlines in October, November and December this year.

The requested $121 million in attorneys’ fees accounts for 13.4 percent of the estimated $902 million value of the settlement, “well below the Ninth Circuit’s 25 percent benchmark for common fund cases,” Breyer wrote in the Friday ruling.

He found the attorneys’ request for an additional $4 million in expenses was reasonable and granted it.

Volkswagen has paid more than $20 billion in U.S. civil settlements and criminal fines so far for installing of emissions-cheating software in some 11 million vehicles worldwide, and U.S. prosecutors have criminally charged six of its executives with conspiracy and obstruction of justice.

Also Friday, Breyer approved a third partial consent decree in which Volkswagen agreed to pay a $93.8 million fine to California’s air quality regulator, the California Air Resources Board. That money will go to the state’s Air Pollution Control Fund, according to the consent decree.

On top of that, Volkswagen will pay California another $60 million, in $10 million installments over six years, to reimburse it for the costs of securing three consent decrees. The third consent decree also requires Volkswagen make changes to its corporate governance structure, maintain an approved whistleblower system, and hire third-party testers and auditors to evaluate its emissions compliance.

Volkswagen spokeswoman Jeannine Ginivan and California Attorney General Xavier Becerra’s office did not immediately return emails seeking comment Friday afternoon.

The plaintiffs’ steering committee said in a statement Friday that it appreciated the court’s consideration of its fee request and was “gratified” to be implementing the two class-action settlements.

More than 10,000 of 30,000 filed claims have been paid for the 3.0-liter settlement in less than two months, and more than $540 million in payment offers have been made, according to class attorneys.

“We negotiated these agreements to hold Volkswagen accountable for its breach of consumer trust, and we hope that all class members choose to take advantage of the benefits detailed in these settlements,” the class attorneys said in a statement. “These legal fees are in addition to the compensation Volkswagen has already agreed to pay under the terms of the settlement, and will not be deducted from any class member’s recovery amount.”

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