Court Opinion

ID: 4292593
Source: CourtListenerOpinion
Date Created: 2018-07-09 20:00:39.886152+00
Date Added: 2024-06-11T14:38:21.832648
License: Public Domain

NOT FOR PUBLICATION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.
                                           4
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

                                           5
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

                                            6
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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