Autoport, LLC v. Volkswagen Group of America ( 2019 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JAN 22 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: VOLKSWAGEN "CLEAN DIESEL" No. 17-16066
MARKETING, SALES PRACTICES, AND
PRODUCTS LIABILITY LITIGATION, D.C. No. 3:15-md-02672-CRB
______________________________
JASON HILL; RAY PRECIADO; SUSAN MEMORANDUM*
TARRENCE; STEVEN R. THORNTON;
ANNE DUNCAN ARGENTO; SIMON W.
BEAVEN; JULIET BRODIE; SARAH
BURT; AIMEE EPSTEIN; GEORGE
FARQUAR; MARK HOULE; REBECCA
KAPLAN; HELEN KOISK-WESTLY;
RAYMOND KREIN; LEO WINTERNITZ;
MARCUS ALEXANDER DOEGE;
LESLIE MACLISE-KANE; TIMOTHY
WATSON; FARRAH P. BELL; JERRY
LAWHON; MICHAEL R. CRUISE; JOHN
C. DUFURRENA; SCOTT BAHR; KARL
FRY; CESAR OLMOS; BRITNEY LYNNE
SCHNATHORST; CARLA BERG;
AARON JOY; ERIC DAVIDSON WHITE;
FLOYD BECK WARREN; THOMAS J.
BUCHBERGER; RUSSELL EVANS;
CARMEL RUBIN; DANIEL SULLIVAN;
MATTHEW CURE; DENISE DE FIESTA;
MARK ROVNER; WOLFGANG
STEUDEL; ANNE MAHLE; DAVID
MCCARTHY; SCOTT MOEN; RYAN
JOSEPH SCHUETTE; MEGAN
WALAWENDER; JOSEPH MORREY;
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
MICHAEL LORENZ; NANCY L. STIREK;
REBECCA PERLMUTTER; ADDISON
MINOTT; RICHARD GROGAN; ALAN
BANDICS; MELANI BUCHANAN
FARMER; KEVIN BEDARD;
ELIZABETH BEDARD; CYNTHIA R.
KIRTLAND; MICHAEL CHARLES
KRIMMELBEIN; WILL HARLAN;
HEATHER GREENFIELD; THOMAS W.
AYALA; HERBERT YUSSIM;
NICHOLAS BOND; BRIAN J. BIALECKI;
KATHERINE MEHLS; WHITNEY
POWERS; ROY MCNEAL; BRETT
ALTERS; KELLY R. KING; RACHEL
OTTO; WILLIAM ANDREW WILSON;
DAVID EBENSTEIN; MARK
SCHUMACHER; CHAD DIAL; JOSEPH
HERR; KURT MALLERY; MARION B.
MOORE; LAURA SWENSON; BRIAN
NICHOLAS MILLS; STEPHEN VERNER,
Plaintiffs-Appellees,
AUTOPORT, LLC,
Objector-Appellant,
v.
VOLKSWAGEN GROUP OF AMERICA,
INC.; VOLKSWAGEN, AG; AUDI, AG;
AUDI OF AMERICA, LLC; PORSCHE
CARS NORTH AMERICA, INC.;
ROBERT BOSCH GMBH; ROBERT
BOSCH, LLC,
Defendants-Appellees.
Appeal from the United States District Court
2
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted December 19, 2018
San Francisco, California
Before: M. SMITH and NGUYEN, Circuit Judges, and RESTANI,** Judge.
Attorneys for Objector-Appellant Autoport, LLC (Autoport) represented it in
a state-court action against Volkswagen, and also provided guidance to class
counsel in this underlying multidistrict litigation (MDL). Autoport filed a motion
for attorneys’ fees to recover for these services, which the district court denied
along with 243 other fee motions. We have jurisdiction pursuant to 28 U.S.C.
§ 1291, and we affirm.
Much of the relevant factual background for this appeal is set forth in the
concurrently filed opinion in Bishop, Heenan & Davies v. Volkswagen Group of
America, Inc., Nos. 17-16020+. As part of the flurry of litigation that followed
public disclosure of Volkswagen’s use of “defeat devices” in its purportedly “clean
diesel” vehicles, Autoport and its lawyers represented non-Volkswagen dealers
(Non-VW Dealers) in Missouri state court.1 Upon reviewing the proposed MDL
settlement filed with the district court (the Settlement), one of Autoport’s lawyers,
**
The Honorable Jane A. Restani, Judge for the United States Court of
International Trade, sitting by designation.
1
Autoport’s Missouri litigation was not consolidated with the other
Volkswagen cases or transferred to the district court.
3
Allen P. Press of the firm Jacobson Press & Fields P.C. (JPF), noted that its text
might have excluded Non-VW Dealers—an omission that, as confirmed by one of
Volkswagen’s lawyers, would have been inadvertent. Press proceeded to engage
with the MDL’s Plaintiffs’ Steering Committee (PSC), and after a “lengthy email
exchange with various PSC members,” the MDL’s “Lead Counsel stated that
dealers were included in the Settlement.” The final Settlement text remedied these
potential errors and included Non-VW Dealers. Autoport subsequently filed a
motion for attorneys’ fees with the district court, seeking compensation primarily
for JPF’s efforts in Missouri state court. The district court denied Autoport’s
motion, and this appeal followed.
1. As discussed at greater length in the Bishop, Heenan & Davies opinion, at
the commencement of the MDL, the district court issued a series of pretrial orders
(PTOs) to govern the litigation. PTO No. 11 mandated that “[t]he recovery of
common benefit attorneys’ fees and cost reimbursements will be limited to
‘Participating Counsel,’” meaning Lead Counsel, the PSC, and “any other counsel
authorized by Lead Counsel to perform work that may be considered for common
benefit compensation, and/or counsel who have been specifically approved by this
Court as Participating Counsel prior to incurring any such cost or expense.” PTO
No. 11 further explained that “Participating Counsel shall be eligible to receive
common benefit attorneys’ fees and reimbursement of costs and expenses only if
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the time expended, costs incurred, and activity in question were (a) for the
common benefit of Plaintiffs; (b) timely submitted; and (c) reasonable.”
The $404,646.27 in fees that Autoport sought in its motion were not merely
compensation for Press’s work with the Settlement text, but were instead primarily
for the work JPF performed for Autoport in Missouri state court. That wholly
separate litigation was not consolidated as part of the MDL, and there is no
evidence that Lead Counsel requested and authorized the 287.3 hours spent
prosecuting that state-court action, as required by PTO No. 11.
As for the approximately thirteen hours of work that Press spent working on
the Settlement text, although his efforts arguably benefited the MDL class, it is not
clear from the record that Press qualified as “counsel authorized by Lead Counsel
to perform work that may be considered for common benefit compensation, and/or
counsel who have been specifically approved by this Court as Participating
Counsel prior to incurring any such cost or expense.” Press’s declaration,
uncontested though it may be, demonstrated only that a representative of the PSC
discussed the Settlement with him; it does not necessarily follow that the work was
sanctioned beforehand, or that Press or JPF qualified as counsel authorized by
Lead Counsel to perform work. “A district court abuses its discretion if its
decision is based on an erroneous conclusion of law or if the record contains no
evidence on which it rationally could have based its decision.” Stanger v. China
5
Elec. Motor, Inc., 812 F.3d 734, 738 (9th Cir. 2016) (quoting In re Mercury
Interactive Corp. Sec. Litig., 618 F.3d 988, 992 (9th Cir. 2010)). Here, the
evidence in the record supports the district court’s conclusion that Autoport did not
comply with PTO No. 11, as there is no evidence that Lead Counsel or the court
actually authorized Press’s work on the Settlement. Therefore, the district court
did not abuse its discretion when it concluded that none of the work for which
Autoport sought attorneys’ fees, even those efforts that arguably benefited the
class, could be compensated.2
2. Autoport also argues that the district court abused its discretion by “fail[ing]
to consider any of the facts on which the fee request was based” and “group[ing]
the lawyers’ request in with those of numerous other lawyers who did not create
any benefit for the Class.” However, as discussed in the Bishop, Heenan & Davies
opinion, the district court only needed to “articulate with sufficient clarity the
manner in which it ma[de] its determination.” Carter v. Caleb Brett LLC, 757 F.3d
866, 869 (9th Cir. 2014) (quoting Quesada v. Thomason, 850 F.2d 537, 539 (9th
Cir. 1988)). Here, the district court explained the applicable standard and then
concluded—correctly and specifically—that Autoport’s work was not “requested
2
Furthermore, although not explicitly addressed by the district court,
there is no evidence that Autoport followed the compensation procedure required
by PTO No. 11. This would be yet another ground for denying its fee motion,
apart from whether Lead Counsel authorized Press to perform work on the
Settlement.
6
and authorized” by Lead Counsel.3 Although brief, the district court’s explanation
sufficiently articulated the reason for its denial.
AFFIRMED.
3
We note a slight error in the district court’s order. In a footnote, the
court explained that certain “non-class attorneys assert that they made suggestions
to the PSC regarding the language used in the consolidated class action
complaints,” and cited to the specific docket number of Autoport’s motion. The
court concluded, “Those attorneys, however, have not submitted evidence that
Lead Counsel requested and authorized this work.” This description is not entirely
accurate; Autoport’s attorney made a suggestion to the PSC regarding the text of
the Settlement, not the text of the MDL’s consolidated class action complaint.
However, this minor error does not change the fact that, as the district court
correctly noted, Autoport did “not submit[] evidence that Lead Counsel requested
and authorized” Press’s work.
7