Bloomberg Law reports on the Volkswagen emissions settlement and CEI's Center for Class Action Fairness's objection to the settlement.
A proposed $14.7 billion settlement among Volkswagen, a class of consumers and the federal government has drawn criticism from a number of parties, who are pushing for lower attorneys fees and additional compensation.
The proposed settlement would create a $10 billion compensation fund for owners who purchased or leased 2.0-liter Volkswagen diesels that were equipped with illegal defeat devices, technology that allowed the vehicles to pass emissions tests despite emitting far more pollution than allowed under normal driving conditions. Owners would have the options of selling their vehicles back to Volkswagen or, if a technical fix is approved by regulators, accepting a combination of a free repair and a cash payment.
At least 15 parties, ranging from individual Volkswagen diesel owners to the Competitive Enterprise Institute’s Center for Class Action Fairness, filed objections to the settlement, according to the court docket. Common issues highlighted in those objections include the level of compensation requested by class-action attorneys, the absence of any attorneys fees awarded for individuals who retained their own counsel and language that allows Volkswagen to recover any money left in the compensation fund after the end of the proposed claim period.
The Competitive Enterprise Institute’s Center for Class Action Fairness also criticized the class attorneys for suggesting such a large fee and negotiating the fee separately from the overall settlement, a decision the center alleged to have likely cost consumers hundreds of millions of dollars in compensation.
The center provided three explanations for that assertion: Volkswagen may have held back billions of dollars during the settlement negotiations out of concern that the fee request would be even higher, a fee award of less than $324 million will see unawarded money revert to Volkswagen rather than to consumers and the fee is improperly insulated on appeal.
The fee request is “particularly egregious” given that Volkswagen had already hired Kenneth Feinberg, managing partner of The Law Offices of Kenneth R. Feinberg PC, to establish and administer a claims resolution program, according to the Center for Class Action Fairness.
Read the full article at Bloomberg Law.