Appeals Court Scraps $3.7M Attorney Fee Award in BMW Class Action

The U.S. Court of Appeals for the Third Circuit vacated a $3.7 million attorney fee award and remanded it with instructions to reconsider the amount in a class action lawsuit brought against BMW of North America over the sale of cars with defective engines.

The panel said the plaintiffs firms’ summaries of hours worked over the three-year period of the litigation weren’t detailed enough, and therefore more documentation is needed to determine the award.

“We simply cannot discern from the charts whether certain hours are duplicative (a determination that is particularly crucial here, given that three plaintiffs’ firms seek fees for performing the same categories of work) or whether the total hours billed were reasonable for the work performed,” Judges Thomas Ambro, Marjorie Rendell and Julio Fuentes said.

BMW agreed to pay $27 million to resolve the claims brought by consumers in 2017 that the company knowingly manufactured and sold vehicles equipped with defective N20 and N26 engines. In settling, BMW’s lawyers with the firm Buchanan Ingersoll & Rooney agreed not to object to an award less than $1.9 million and the class counsel not to ask for more than $3.7 million.

U.S. Magistrate Judge Cathy L. Waldor of the District of New Jersey approved the upper limit of that range sought by the plaintiffs firms representing consumers: Nagel Rice; Kantrowitz Goldhamer & Graifman; and Thomas P. Sobran, finding the firms’ charts explaining the time they worked was sufficient. The fees were calculated as a lodestar, which is based on the number of hours the lawyers worked on a case and the hourly billing rate.

But the panel held that Waldor should have taken up an offer by the three firms to provide more detailed billing records and time sheets.

“While not required, ‘contemporaneously recorded time sheets are the preferred practice.’ And that preference is especially strong here, where class counsel’s summary charts were so condensed, high-level, and lacking in specific detail that we would likely need the underlying billing records to parse them,” the panel wrote.

The judges directed the lower court to provide more reasoning for its decision to add a lodestar multiplier enhancing the award.