Volvo Transmission Defect Payout Approved | Courthouse News Service
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Volvo Transmission Defect Payout Approved

(CN) - Volvo can settle warranty claims over faulty SUV transmissions by paying repair costs and $3 million in attorneys' fees, a federal judge ruled.

In a 2009 complaint on behalf of 95,000 Volvo owners, a class claimed that a design defect in 2003-2005 Volvo XC90 T6 vehicles caused the cars' transmissions to fail shortly after the expiration of a standard warranty covering cars younger than 4 years or with no more than 50,000 miles.

The parties settled in mediation with Volvo agreeing to double the length of its warranty and pay 50 percent of out-of-pocket costs to consumers who replaced, rebuilt or repaired transmissions on new or certified pre-owned Volvos with less than 100,000 miles at the time of the repair. It also agreed to pay 25 percent of out-of-pockets costs to those who purchased noncertified pre-owned cars.

U.S. District Judge Claire Cecchi certified the class and approved the settlement Friday, finding that only a "miniscule" fraction of the settlement class objected to the settlement.

She noted that the court received judge 12 written objections to the settlement.

"The paucity of negative feedback in the face of an extensive notice plan leads the court to conclude that the settlement class generally and overwhelmingly approves of the settlement," Cecchi wrote.

She noted that the case has been litigated for more than three years and the parties have nearly completed discovery.

"Based on the extensive discovery and negotiations, the court concludes that class counsel had a thorough appreciation of the merits of the case prior to settlement," Cecchi wrote.

The court also approved a $3 million award of attorneys' fees and costs, a figure Volvo agreed it would not oppose in the settlement agreement.

Previously the court had appointed Joseph Sauder of Chimicles & Tikellis as lead counsel, and Bruce Greenberg of Lite DePalma Greenberg as interim liaison counsel.

The lone opposition to the proposed fee award argued that any award is premature because it is unclear what total amount will eventually be paid to the class.

Cecci noted, however, that "the fee award is reasonable considering the significant amount of time and effort expended by class counsel on this case.

"In addition, the fee award will not affect the total settlement benefits awarded to the class and will be paid separately from and in addition to such benefits," the 36-page ruling states.

Class counsel calculated that it spent $2.6 million to litigate the case through July 2012, and Cecchi found a multiplier of 1.13 reasonable and appropriate.

The ruling also approves $33,000 in incentive awards to be distributed amon the six named plaintiffs.

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