The VW logo of the brand Volkswagen at a car dealer building in Berlin, Germany. (Photo: Shutterstock.com)
More than 30 law firms have asked a federal judge to award them legal fees and costs associated with a $14.7 billion class action settlement with Volkswagen A.G., most filing after an order last week that barred attorneys from submitting liens against their clients’ awards.
The firms seeking fees are independent from those on the plaintiffs’ steering committee that negotiated the settlement, which U.S. District Judge Charles Breyer of the Northern District of California in San Francisco approved on Oct. 25.
Last month, the committee’s 22 lawyers requested $175 million in fees and costs that Volkswagen has agreed to pay in addition to the settlement, which compensates owners and lessees of 475,000 “clean diesel” vehicles that cheated emissions tests.
But lawyers independent of the committee say some of those fees should go to them because they did substantial work that benefited the class. Others say their liens have been left out intentionally in a rush to reach a settlement that assured class members they would not have their awards reduced to pay attorney fees.
“Nobody accommodated this in the actual settlement,” said David Vendler, of Los Angeles-based Morris, Polich & Purdy, who filed a motion for $410,708 in fees and costs. Liens, he said, “may reduce people’s settlement, but they signed up for it. It’s a matter of contract. People signed up with their attorneys and agreed to pay whatever they agreed to pay.”
Neither lead counsel Elizabeth Cabraser nor a Volkswagen spokeswoman responded to requests for comment.
Last month, Volkswagen filed a notice that five law firms had submitted liens against settlement payments for about 1,300 consumers. In response to that notice, Breyer on Nov. 22 ordered Volkswagen to pay class members their full awards regardless of liens. He also invoked the All Writs Act to enjoin all state court proceedings regarding attorney liens.
“By diverting a portion of class members’ compensation to private counsel, a lien reduces class members’ compensation and places them in a position where they must purchase another vehicle but lack the funds to do so,” he wrote. “Put another way, attorneys—notably, attorneys who did not have a hand in negotiating the settlement—stand to profit while their clients are left with inadequate compensation.”
An attorney at one of the firms, which had submitted liens against 33 clients, called the order “extremely troubling.”
“The court has no authority over the lien; that’s a contract between me and my client,” said Steve Cichowski, of counsel to the Davis Law Firm in San Antonio. “What it appears to be is the court is trying to protect the settlement.”
Breyer allowed attorneys to file motions for “fees in accordance with his or her lien” by Nov. 29.
Some firms are asking for tens of thousands of dollars for a few clients. Others have hundreds of clients or want hundreds of thousands of dollars in fees and costs. Many firms have cited contingency-fee contracts of as much as 45 percent. Others allege that they have reached out to the steering committee regarding fees but have gotten no response.
Some motions are not focused on liens. They claim they did legal work for the class for which they should be compensated, such as dealing with remand and removal motions, filing cases prior to the steering committee being appointed or fielding calls about the settlement. They cite a declaration in the committee’s fee request in which Cabraser said $11 million would be reserved for “other firms” that did “necessary and appropriate steps” toward obtaining the settlement.
In one motion, for example, attorneys at Nagel Rice claimed they filed one of the first complaints in New Jersey and have been regularly involved in court appearances and seminars on the litigation. They are seeking $472,476 in fees and costs for 43 clients.
“We’re arguing we benefited the class from the time we started to the time we ended, and that should be compensated under common law principles,” said Diane Sammons, a partner at the Roseland, New Jersey, firm.
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