Nagel Rice, LLP, et al. v. Volkswagen Group of America, Inc., et al.

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. A fter 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