BMW Gets $3.7 Million Timing Chain Settlement Fee Award Tossed

BMW of North America Inc. convinced the Third Circuit Friday to throw out a $3.7 million fee award to plaintiffs’ attorneys for their work on a class settlement involving certain vehicles with allegedly flawed engine parts.

The award was based on an insufficient record, the appeals court said, sending the matter back to the district court for another look.

Artem Gelis and others sued BMW, alleging that series N20/N26 engines in some vehicles had defective timing chain and oil pump assemblies that could fail prematurely, requiring repairs costing thousands of dollars.

An uncapped deal that reimburses owners for repairs and provides extended warranties got final approval from the US District Court for the District of New Jersey last year.

Class counsel agreed not to seek more than $3.7 million in fees and expenses, and BMW agreed not to contest any award at or below $1.5 million.

The district court accepted the plaintiffs’ lawyers’ $1.93 million lodestar—their time spent on the case multiplied by their hourly rates. It then applied their requested multiplier of 1.9 and granted their request for $3.7 million, prompting the automaker’s appeal to the US Court of Appeals for the Third Circuit.

A fee application must be specific enough to allow the district court to determine if the hours claimed are reasonable for the work performed, the Third Circuit said, vacating the judgment.

The plaintiffs’ lawyers submitted summary charts that weren’t detailed enough to justify the lodestar amount, the appeals court said.

Although the charts provide “some information” about the hours devoted to litigation matters, such as “discovery activities,” the hours billed by each attorney are aggregated across the entire three-year litigation period, it said.

The appeals court said it can’t discern from the charts whether certain hours are duplicative, which it said is “particularly crucial here,” because three plaintiffs’ firms sought fees for the same categories of work, or whether the total hours billed were reasonable for the work performed.

The appeals court also urged the district court on remand to provide additional reasoning for a decision about whether to add a lodestar multiplier.

Judge Thomas L. Ambro wrote the opinion, joined by Judges Marjorie O. Rendell and Julio M. Fuentes.

Kantrowitz Goldhamer & Graifman, Nagle Rice, and Thomas P. Sobran of Hingham, Mass., represented the drivers. Buchanan Ingersoll & Rooney represented BMW.

The case is Gelis v. BMW of N. Am., LLC, 3d Cir., No. 21-02093, 9/9/22.