Settlement delivers “substantial, tangible benefits” to class members, with extremely high participation rates

As reported by Law360 (subscription), the Ninth Circuit Court of Appeal has affirmed the $10 billion deal between consumers and Volkswagen covering over 475,000 diesel vehicles in the diesel engine emissions fraud scandal that first broke in 2015. The Court upheld the settlement relating to 2.0 liter engine VW, Porsche, and Audi vehicles after reviewing six separate appeals.

As the Court wrote, “Volkswagen duped half a million Americans into buying cars advertised as ‘clean diesel.’ They were anything but. As the lawsuits piled up, the car manufacturer hammered out a ten-billion-dollar settlement with a class of consumers, agreeing to fix or buy back the affected vehicles and providing some additional money as well. Following a thorough review, the district court blessed the agreement.”

The Court’s opinion highlighted the benefits the settlement delivered to all consumer class members, including the high payouts:

This settlement is highly unusual. Most class members’ compensation—buybacks, fixes, or lease terminations plus some cash—is as much as, perhaps more than, they could expect to receive in a successful suit litigated to judgment. And not just some of them: the $10.033 billion set aside would fund the most expensive remedy option for every single class member.

In addition, the Court noted the high rate of participation in and enthusiasm for the settlement on the part of the class:

Class members did not loiter in claiming these benefits. By the time these appeals were briefed, Volkswagen had paid out or committed to pay over $7 billion. And according to the last report from the court appointed independent claims supervisor, by May 2018 Volkswagen had fixed or removed from the road 85.8% of all affected vehicles; paid out $7.4 billion to over 350,000 class members; and paid out or committed $8.1 billion to almost 450,000 class members [emphasis added].

“Far from getting the short end of the stick, the eligible sellers gained enormously from being in the class with vehicle owners,” the Panel stated. “Instead of getting nothing, eligible sellers received several thousand dollars in compensation. They quite possibly obtained it because they were in the same class as vehicle owners who had leverage against Volkswagen, not in spite of that inclusion.”

“We are pleased with the court’s decision, which acknowledges the widespread support this historic settlement has received from affected Volkswagen owners and lessees and the substantial benefits available to class members,” noted Elizabeth Cabraser, plaintiffs’ lead counsel in the historic litigation.

Read the full story on Law360 (subscription required).

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