Volkswagen AG is paying out $175 million to plaintiffs’ attorneys in the $10 billion settlement over the “clean diesel” litigation. But many who say they worked on those cases won’t be getting any money.

Only attorneys chosen as class counsel in the consolidated litigation, and attorneys working on assignments from class counsel, are entitled to attorneys’ fees, the U.S. Court of Appeals for the Ninth Circuit said Jan. 22.

That means numerous attorneys who worked on suits before the appointment of class counsel won’t get paid. That includes for work they did filing complaints, attempting to negotiate early settlements, and fielding calls with clients and other attorneys.

The settlement over litigation involving VW’s use of “defeat devices” in nearly half a million diesel vehicles resulted in a more than $10 billion settlement, with payments to consumers totaling nearly $7 billion to date, according to the court.

Hundreds of Requests Denied

Attorneys who hadn’t been chosen as class counsel and hadn’t performed work assigned by class counsel submitted some 244 requests for fees.

After a trial court denied the fee requests, attorneys from 18 firms appealed.

To obtain an award under class action rules, the attorneys would have had to provide a substantial benefit to the class, the Ninth Circuit panel said in the main opinion.

The work done before the MDL court appointed class counsel, and some of the work the non-class counsel did afterwards, didn’t benefit the class, even if it may have benefited individual clients, the appeals court said.

In finding against fees, the appeals court noted its concern about ensuring that payments under the settlement were large enough for class members to buy replacement vehicles, thereby removing polluting vehicles from the road.

The panel did agree, however, that the attorneys had standing to file their appeal, an issue of first impression in the Ninth Circuit.

Nagel Rice LLP, Hyde & Swigart, and James B. Feinman & Associates represented the non-class counsel.

Lieff Cabraser Heimann & Bernstein LLP and others represented the plaintiffs.

Sullivan & Cromwell LLP represented VW.

The case is In re Volkswagen “Clean Diesel” Mktg., Sales Practices, and Prods. Liability Litig., 2019 BL 19358, 2019 BL 19358, 9th Cir., No. 17-16020, 1/22/19.