JEFFERSON CITY, Mo. (CN) - Volkswagen must pay $6 million in attorneys' fees after settling claims over allegedly defective window regulators, the Missouri Supreme Court ruled.
Darren Berry filed the class action in 2005, claiming Volkswagen violated the Missouri Merchandising Practices Act because certain Volkswagen vehicles had defective window regulators.
A Jackson County judge limited the class to Missouri consumers, and Volkswagen agreed to settle on the eve of trial in 2010. Ultimately 130 class members submitted valid claims, taking a total payout of more than $125,000.
Claiming that they spent 7,910 hours on the case, class counsel calculated that their attorneys' fees lodestar topped $3.08 million. The lawyers sought a multiplier of 2.6, arguing the fee award represented approximately 25 percent of the potential total value of the settlement.
The trial court ultimately set a multiplier of 2, bringing the total fee award to $6.1 million. It also granted all expenses and assessed court costs against Volkswagen.
Volkswagen claimed on appeal that the award was disproportionate and bears no resemblance to the award given to the class. It also said a multiplier was not warranted because the case lacked rare or exceptional circumstances, and that the award offends public policy, undermines the purpose of a class action, and violates Volkswagen's due process.
The state Supreme Court affirmed Tuesday after noting how "the trial judge found 'the fee to be received by class counsel was always contingent, unlike the fees received by counsel for defendant;' 'taking this case precluded class counsel from accepting other employment that would have been less risky' and 'the time required by the demands of preparing this cause for trial delayed work on class counsel's other work.'"
"These findings support a finding that a multiplier was necessary to ensure a market fee that compensated class counsel for taking this case in lieu of working less risky cases on an hourly basis," Judge George Draper III wrote for the en banc court.
Chief Justice Richard Teitelman concurred along with Judges Mary Russell and Zel Fischer concurred.
Judge Laura Denvir Stith partly dissented, however, because she found that the trial court failed to properly assess whether the lodestar amount was reasonable.
"The findings and conclusion suggest that the trial court instead believed that once it approved the hours spent, it could simply presume the lodestar amount was reasonable and then consider the traditional factors used to determine the reasonableness of a fee in deciding whether to enhance the lodestar with a multiplier," Stith wrote. "If this is what the trial court did, it was an abuse of discretion.
"Alternatively, if the trial court sub silencio considered the necessary factors in approving the lodestar, and then considered many of them a second time in approving the multiplier, as the principal opinion seems to presume, then this also was an abuse of discretion. The same factors should not have been considered twice.
"The trial court also abused its discretion in expressly determining that it would not give any weight to the actual benefit to the class from the lawsuit. This, along with the factors the trial court did mention, was an important and necessary consideration in enhancing the lodestar with a multiplier. The principal opinion errs in not requiring that actual benefit be one of the many considerations in determining whether to approve a multiplier."
Judges Patricia Breckenridge and Paul Wilson did not participate.
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