Jason Hill v. Volkswagen, Ag ( 2018 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
JUL 09 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
In re: VOLKSWAGEN “CLEAN No. 16-17035
DIESEL” MARKETING, SALES
PRACTICES, AND PRODUCTS D.C. No. 3:15-md-02672-CRB
LIABILITY LITIGATION,
______________________________
MEMORANDUM*
JASON HILL et al.,
Plaintiffs-Appellees,
v.
VOLKSWAGEN, AG; VOLKSWAGEN
GROUP OF AMERICA, INC.; AUDI,
AG; AUDI OF AMERICA, LLC;
PORSCHE CARS NORTH AMERICA,
INC.; ROBERT BOSCH GMBH;
ROBERT BOSCH, LLC,
Defendants-Appellees,
v.
JOLIAN KANGAS, Proposed Intervenor,
Movant-Appellant.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Appeal from the United States District Court
for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Submitted December 7, 2017**
Pasadena, California
Before: TASHIMA, W. FLETCHER, and BERZON, Circuit Judges.
Jolian Kangas objected to a proposed class action settlement arising out of
Volkswagen’s installation of “defeat devices” in its 2.0-liter diesel cars and moved
to intervene in the case to conduct discovery regarding the settlement negotiations.
He appeals the district court’s final order approving the settlement and order
denying him leave to intervene. We review the district court’s approval of the
settlement for abuse of discretion, Staton v. Boeing Co., 327 F.3d 938, 960 (9th
Cir. 2003), and its denial of the motion to intervene as of right de novo, Donnelly
v. Glickman, 159 F.3d 405, 409 (9th Cir. 1998). We affirm both orders.
1. As we explain in a separate opinion for related appeals challenging the
settlement, In re Volkswagen “Clean Diesel” Marketing, Sales Practices &
Products Liability Litigation (Nos. 16-17157, 16-17158, 16-17166, 16-17168, 16-
17183, 16-17185), the district court did not err when it approved the settlement
with a reversion clause. Op. at 24–27.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
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2. Kangas argues that the settlement is unfair because it does not
indemnify class members for liability to third parties for personal injuries caused
by their vehicles’ excess emissions. He offers no evidence, however, that class
members will in fact face this hypothetical liability. The district court did not abuse
its discretion when it approved the settlement despite its lack of indemnification
against wholly speculative claims. Op. at 36.
3. The district court did not err by approving the settlement because it
released Volkswagen from “any and all claims, . . . whether or not concealed or
hidden,” by class members arising from its installation of the defeat devices at
issue. The “concealed or hidden” phrase that Kangas complains of is boilerplate
that appears in many class settlement releases. See, e.g., Skilstaf, Inc. v. CVS
Caremark Corp., 669 F.3d 1005, 1010 (9th Cir. 2012); Torchia v. W.W. Grainger,
Inc., 304 F.R.D. 256, 264 (E.D. Cal. 2014). Read in context, the phrase—listed
next to modifiers such as “foreseen or unforeseen,” and “suspected or
unsuspected”—appears to cover only claims of which class members are not yet
aware, not claims that Volkswagen has actively or fraudulently concealed.
Moreover, the release is limited in scope: it includes only claims related to the use
of the defeat devices at issue and expressly does not release personal injury or
wrongful death claims. Approving the settlement with this release was not an abuse
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of discretion. See Staton, 327 F.3d at 962 (“[W]e would not overturn the district
court’s determination to approve the settlement as fair were the release . . .
provisions the only aspects of the decree that are troublesome.”).1
4. Kangas also argues that because Volkswagen’s California fines will
be lower than their corresponding payout to class members, the settlement creates
an incentive for Volkswagen not to process California class members’ claims. But,
as explained in In re Volkswagen, Volkswagen faces strong incentives to process
class members’ claims. Op. at 26. Kangas’s argument is also belied by experience:
Volkswagen has passed the national 85% threshold and is 1.5% away from
meeting the California threshold.
5. The district court’s approval of the class notice was not in error.
Kangas argues that the long-form notice was misleading. The contention is that the
long-form notice contradicted the DOJ consent decree by informing recipients that
those who “opt out will not be eligible to receive the cash payments provided by
the [settlement] or to participate in the buyback program.” Kangas argues that,
because the consent decree requires Volkswagen to buy back affected vehicles
either at retail value or according to the terms of the settlement, the notice misleads
1
In the same vein, Kangas argues that the settlement is an illegal contract
because of the release. For the reasons just described, this argument also fails.
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class members into believing Volkswagen will not buy back their vehicles at all if
they opt out. But the most reasonable interpretation is that the notice refers solely
to the buyback program under the settlement. The section to which Kangas objects
falls at the end of the notice’s description of the settlement’s buyback option.
6. Kangas’s argument that the class was “prejudiced . . . at the
bargaining table” because of the segregated fee structure is meritless. He contends
that, because Volkswagen did not know the ultimate amount of class counsel’s
fees, it would “hold back . . . billions of dollars” in negotiations. Kangas has
produced no evidence that Volkswagen would have paid more to the class absent
the segregated fee structure. Indeed, the funding pool ultimately created by the
settlement was calculated to provide the most expensive possible remedy to every
class member. Op. at 25 n.20.
7. Kangas argues that class members were also misled by the notice
provision that “[a]ny attorneys’ fees and costs awarded by the Court will be paid
separately by Volkswagen and will not reduce benefits to class members.” He
claims this implies that fees have no impact on the actual settlement size. We
disagree. Here too, the most reasonable interpretation is the one that accords with
an accurate description of the settlement: The funding pool available to class
members (which, as noted, contains enough money for each class member to take
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advantage of the most expensive option) would not be used to pay attorneys’ fees.
Op. at 25 n.20.
8. As we explain in In re Volkswagen, the district court did not err in its
timing of the motion for fees relative to settlement approval. Op. at 30–34. For the
reasons discussed there, Kangas’s argument that it was improper to approve the
settlement prior to the fee award is not compelling.
9. The district court denied Kangas’s motion to intervene as of right
under Federal Rule of Civil Procedure 24(a) and permissively under Rule 24(b).
He challenges only the district court’s analysis of the former; the latter is therefore
waived, see Sanchez v. Pac. Powder Co., 147 F.3d 1097, 1100 (9th Cir. 1998). The
district court held that Kangas did not demonstrate, as he must, that “disposing of
the action may . . . impair or impede [his] ability to protect [his] interest[.]” Fed. R.
Civ. P. 24(a)(2); Kangas argued that his interests would be impaired because of
collusion between class counsel and Volkswagen. He has not, however, produced
any persuasive evidence of collusion.
In the district court, Kangas’s sole argument for the existence of collusion
was that Volkswagen submitted some discovery documents in German. He appears
to have backed away from this argument on appeal. In any case, German
companies’ submission of German documents for a lawsuit involving actions in
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Germany does not even hint at collusion. Additionally, the district court’s thorough
examination of the possibility of collusion—which we review and uphold in In re
Volkswagen—undercuts Kangas’s interest-impairment argument. Op. at 24–27.
AFFIRMED.
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