Nagel Rice, LLP, et al. v. Volkswagen Group of America, Inc., et al.
Environmental DueProcess Securities ClassAction JusticiabilityDoctri
Whether non-class counsel is entitled to an award of counsel fees and costs for pre-appointment work, whether a class action settlement agreement providing fees only to class counsel for pre-appointment work creates unequal plaintiff classes, whether the denial of fees to non-class counsel creates a conflict of interest and constitutional infirmity, whether the denial of fees to non-class counsel without an objective basis violates precedent
QUESTIONS PRESENTED This Court has never addressed two important questions in class action litigation. First, whether nonclass counsel is entitled to an award of counsel fees and costs pursuant to Fed. R. Civ. P. 23(h) for work performed prior to the appointment of lead counsel where that work is identical to the pre-appointment work performed by appointed counsel. Second, whether a class action settlement agreement which only provided fees and costs to class counsel for pre-appointment work creates two unequal plaintiff classes. After a public announcement that Volkswagen companies used emissions defeat devices, 451 class actions were filed in approximately sixty districts around the country. Within months of the filings, the MDL court appointed lead counsel and 22 firms to serve on the plaintiffs’ steering committee (“class counsel”) and five months later, a $10 billion dollar settlement was reached that ultimately resulted in the payment of $175 million in attorneys’ fees and costs to only the leadership structure. The District Court approved a multiplier of 2.63 to the total lodestar of the select firms for both pre and postappointment work performed deeming the work to be valuable to the class. Months later the District Court denied every single fee application from non-class counsel for identical pre-appointment work. Because the motion for attorneys’ fees and costs by non-class counsel was decided after final approval, class members represented by nonclass counsel could not exercise their rights to object to the settlement. The Ninth Circuit Court of Appeals affirmance has raised issues for review: A. Does denying fees and costs to non-class counsel for pre-appointment work while awarding fees u and costs to class counsel for identical work create a conflict among the Circuits warranting this Court’s review based upon Gottlieb v. Barry, 43 F.3d 474, 489 (10 Cir. 1994) and In re Cendant Corp. Securities Litigation, 404 F.3d 173, 179 8rd Cir. 2005)? B. Does the award of attorneys’ fees and costs only to class counsel for pre-appointment work run afoul of this court’s decision in Boeing Co. v. Van Gemert, 444 U.S. 472, 478 (1980) and Amchem Products Ine. v. Windsor, 521 U.S. 591, 627 (1997) by creating two unequal plaintiff classes: one whose recovery is reduced by attorneys’ fees and costs and another, represented by select counsel, who get the full benefit of the recovery with no reduction for fees and costs? C. Does this decision create a conflict of interest for class counsel resulting in a constitutional infirmity as articulated in Amchem, 521 U.S. at 626, n.20 and Ortiz v. Fibreboard Corp., 527 U.S. 815, 856 (1999) by denying non-class counsels’ clients their due process right to adequate representation? D. Does the denial of a fee award and costs to nonclass counsel where the court fails to articulate an objective basis for its denial run afoul of this Court’s decision in Perdue v. Kenny A. ex rel. Winn., 559 U.S. 542, 558 (2010)?