As part of our ongoing series covering class actions in which the only real beneficiaries are the plaintiffs’ lawyers, here is the Missouri Court of Appeals’ decision in Berry v. Volkswagen Group of America, Inc. (pdf), No. WD73974 (Mo. Ct. App. June 12, 2012).
The plaintiff alleged a defect in the window regulator of certain vehicles manufactured by Volkswagen. Under the settlement, the Missouri class members were eligible for payments of $75, plus repairs of the alleged defect (or reimbursement for past repairs). But only 177 members of the 22,304-member class—0.79 percent!—actually submitted claims. Thus, the total amount of money paid to the class was only $125,261. By contrast, the class’s lawyers made out like bandits: the trial court awarded them twice their hourly rates for the work they said they performed, giving them over $6 million—almost 50 times more than the class received.
Volkswagen appealed the outrageous fees awarded. The Missouri Court of Appeals ruled that the class counsel wasn’t entitled to a multiple of their hourly rate, and thus slashed the fee award in half. But at the end of the day, the plaintiff’s lawyers in this case are still walking away with almost 25 times as much money as their clients.