Dewey v. Volkswagen of America, No. 07-2249; U.S. District Court (DNJ); opinion by Shwartz, U.S.M.J.; filed December 14, 2012. DDS No. 07-7-xxxx [44 pp.]

This class action concerns allegedly defective pollen filter gasket areas and sunroof drains on various Volkswagen and Audi vehicles. It is before the court on remand from the Third Circuit for proceedings consistent with that court’s finding that the class could not be certified under the parties’ prior settlement because the representative plaintiffs were not adequate to represent the interests of the entire class.

The parties have reached a new settlement addressing the Third Circuit’s adequacy concern, which now allows class members who owned or leased vehicles in a so-called residual group to seek reimbursement in the same way as those who were in the so-called reimbursement group.

Held: The court grants plaintiffs’ new motion for (1) certification of the settlement class; (2) final approval of the class settlement; (3) an award of attorneys’ fees; (4) reimbursement of costs; and (5) an incentive award. The court further grants the separate motion filed by the objectors who pursued an appeal to the Third Circuit for (1) attorney fees; (2) reimbursement of costs; and (3) an incentive award.

As to class certification, the court finds that plaintiffs satisfied all of the requirements of Rule 23(a) — numerosity, commonality, typicality and adequacy. The Third Circuit held that the class as previously certified did not satisfy Rule 23(a)(4) because the representative plaintiffs were each members of the reimbursement group and had an incentive to carve out as many class members as possible into the unrepresented residual group. By eliminating the distinction between the reimbursement group and the residual group and treating each class member similarly by allowing each to seek reimbursement for repairs, the new settlement agreement resolves the adequacy problem the Third Circuit identified.

The named plaintiffs are now in the same position as all other class members because each of them owned or leased the subject vehicles that contained the allegedly defective plenum or sunroof drain system, received allegedly inadequate maintenance recommendations and, as a result, suffered the same injury. Like the putative class members, the named plaintiffs have an interest in obtaining redress for damage or avoiding future damage caused by the allegedly defective systems. Under the new settlement agreement, the representative plaintiffs have no incentive to prioritize recovery for one group over another, since each class member will be treated similarly.

The proposed class representatives are adequate, and the court appoints Jacqueline DelGuercio, Lynda Gallo, Francis Nowicki, Kenneth Bayer, John Dewey, Patrick DeMartino, Patricia Romeo, Ronald Marans and Edward Griffin as class representatives.

The court incorporates by reference its prior finding that the requirements of Rule 23(b) are satisfied.

The court incorporates by reference its discussion and findings concerning class counsel’s adequacy, and notes that counsel expended additional effort litigating the case on appeal, quickly revised the settlement to comply with the Third Circuit’s mandate, and promptly sought to implement the terms of the new settlement. The court appoints Adam Slater and his firm, Mazie Slater Katz & Freeman, and Samuel Sporn and his firm, Schoengold & Sporn, as co-lead class counsel.

Rule 23(e) requires court approval of any class-action settlement. Notice of the new settlement agreement was transmitted to affected class members pursuant to the amended preliminary approval order, using the best practicable notice methods under the circumstances. Here, 105 individuals sought exclusion, five lodged objections and 2,218 eligible class members filed reimbursement claims. These events show that the putative class received valid, due and sufficient notice of the settlement and these proceedings. Accordingly, the notice complies with due process requirements, satisfying Rule 23(e). Furthermore, experienced counsel for the parties, along with the West and Sibley objectors, seek approval of the settlement. Moreover, that the objectors who vigorously opposed the prior settlement support the new settlement further supports a finding that the new settlement is fair and reasonable.

Even with counsel’s concurrence, however, the court must examine the fairness and reasonableness of the settlement, as it serves as a fiduciary for the absent class members. The court finds the factors set forth in Girsh v. Jepson support a finding that the settlement is fair and reasonable and is in the best interest of the settlement class, and the settlement is hereby approved.

The motion for final approval of the settlement class and class settlement is granted, the amount of $9,207,248.19 shall be awarded as fees to class counsel, and reimbursement for expenses is granted for $385,840.01 to Mazie Slater Katz & Freeman and for $291,572.18 to Schoengold & Sporn. The amount of $10,000 shall be awarded to each of the following class representatives: Kenneth Bayer, Jacqueline DelGuercio, Patrick DeMartino, John Dewey, Lynda Gallo, Edward Griffin, Ronald Marans, Francis Nowicki and Patricia Romeo. The amount of $82,134.10 shall be awarded as fees to the Center for Class Action Fairness and $22,529.98 to Gary Sibley; reimbursement for expenses is granted for $3,865.90, inclusive of the Third Circuit’s taxation of costs to the Center for Class Action Fairness, and for $2,470.02, inclusive of the Third Circuit’s taxation of costs to Sibley; and $500 shall be awarded to each of the following objectors: Joshua West, Darren McKinney and Michael Sullivan.