Vodonick v. Volkswagen Aktiengesellschaft

District Court, N.D. California·Decided October 15, 2020·No. 3:16-cv-00219·Unknown

Opinion

JOHN VODONICK, Case No. 16-cv-00219-CRB

Plaintiff, ORDER GRANTING IN PART v. MOTION FOR ATTORNEYS' FEES AND COSTS AKTIENGESELLSCHAFT, et al., Defendants. Plaintiff John Vodonick opted out of the class action settlements that resolved most civil actions against Volkswagen AG and Volkswagen Group of America. Vodonick later accepted Volkswagen’s Rule 68 offer. As permitted by that offer, he now moves for attorneys’ fees and costs. The Court awards Vodonick $21,175.00 in fees. This Court has previously described the events that are the basis for Vodonick’s claims:

Over the course of six years, Volkswagen sold nearly 500,000 Volkswagen– and Audi-branded TDI “clean diesel” vehicles, which they marketed as being environmentally friendly, fuel efficient, and high performing. Consumers were unaware, however, that Volkswagen had secretly equipped these vehicles with a defeat device that allowed Volkswagen to evade United States Environmental Protection Agency (“EPA”) and California Air Resources Board (“CARB”) emissions test procedures. Specifically, the defeat device produces regulation-compliant results when it senses the vehicle is undergoing testing, but operates a less effective emissions control system when the vehicle is driven under normal circumstances. It was only by using the defeat device engine vehicles. In reality, these vehicles emit nitrogen oxides (“NOx”) at a factor of up to 40 times over the permitted limit. In re: Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab. Litig., No. 15-md- 02672-CRB (JSC), 2016 WL 6248426, at *1 (N.D. Cal. Oct. 25, 2016). The scandal led to numerous government actions and over a thousand civil lawsuits, which were consolidated before this Court by the Judicial Panel on Multidistrict Litigation. Id. at *2. The bulk of the civil actions were resolved in two settlements (one concerning 2.0-liter TDI vehicles and another for 3.0-liter TDI vehicles) approved by the Court. See generally In re: Volkswagen, 2016 WL 6248426; 3.0-Liter Class Action Settlement Approval Order (dkt. 3229). Vodonick opted out of the Class Settlements. See List of Opt-Outs (MDL dkt. 2102-1) at 37. He sued Volkswagen in California Superior Court in October 2015. Brief (dkt. 23-1) at 2. Vodonick requested leave to petition for judicial coordination, which Volkswagen did not oppose. Opp’n (MDL dkt. 7678) at 3. Before Vodonick’s petition was decided, in December 2015, Volkswagen removed the case to the Eastern District of California, which transferred it to the MDL before this Court in January 2016. Id. at 3–4. Once the case was transferred to the MDL, the Court immediately stayed it. (MDL dkt. 2) at 1, 3. The Court denied Vodonick’s subsequent requests for remand. See Orders Denying Remand (MDL dkt. 6126, 7522), (dkt. 21). In April 2020, Vodonick filed a First Amended and Supplemental Complaint, which included Song-Beverly Act, breach of contract, unfair business practices, fraud, and product liability claims. FAC (MDL dkt. 7335) at 1. On June 9, 2020, the Court lifted the stay. (MDL dkt. 7515). The same day, Volkswagen served Vodonick with a Rule 68 offer of $40,000, which Vodonick accepted. Opp’n (MDL dkt. 7278) at 9; Notice of Acceptance (dkt. 22). The offer allowed Vodonick to seek reasonable fees and costs to be determined by the Court. Notice of Acceptance (dkt. 22) at 2. Vodonick now requests $1,143,935 in fees and $2,144 in costs. Brief (dkt. 23-1) at Vodonick is entitled to only a fraction of the fees that he requests. Opp’n (MDL dkt. 7678) at 4–5, 7. When a federal court has subject matter jurisdiction over a case based on diversity of the parties, state law determines a party’s entitlement to attorneys’ fees and costs. Mangold v. Cal. Pub. Util. Comm’n, 67 F.3d 1470, 1478 (9th Cir. 1995). Under California law, “in any action on a contract, where the contract specifically provides for an award of attorney fees and costs, which are incurred to enforce that contract[,]. . .” the prevailing party is entitled to reasonable attorneys’ fees. Cal. Civ. Code § 1717. If a plaintiff is entitled to attorneys’ fees, California determines the amount using the lodestar method, which “first calculates the number of hours reasonably spent multiplied by the reasonable hourly rate for each billing professional, and then . . . adjust[s] the amount based on various relevant factors to ensure the fee reflects the fair market value of the attorney services for the particular action.” K.I. v. Wagner, 225 Cal. App. 4th 1412, 1425 (Cal. Ct. App. 2014) (internal quotation marks and alterations omitted). It is the prevailing party’s burden to show that the fees it seeks are reasonable. Nightingale v. Hyundai Motor Am., 31 Cal. App. 4th 99, 104 (Cal. Ct. App. 1994). In the absence of a state law provision that allows for the award of costs “as a part of substantive, compensatory damages scheme,” Rule 54(d) of the Federal Rules of Civil Procedure governs an award of costs in federal district court. See Champion Produce, Inc. v. Ruby Robinson Co., 342 F.3d 1016, 1022 (9th Cir. 2003); Clausen v. M/V NEW CARISSA, 339 F.3d 1049, 1065 (9th Cir. 2003). Rule 54 allows the prevailing party to recover costs, not including attorneys’ fees, unless a federal statute, court order, or other federal rule provides otherwise. Fed. R. Civ. P 54(d)(1). A. Attorneys’ Fees Vodonick seeks $1,143,935 in attorneys’ fees. Brief (dkt. 23-1) at 3. Volkswagen argues that Vodonick is not entitled to fees because he has not established a basis for fee- shifting. Opp’n (MDL dkt. 7678) at 2. Vodonick argues that he is entitled to fees because he is the prevailing party under “. . . Calif. Code of Civil. Proc. § 1021.5, Calif. Civ. Code §§ 1717, 1790, et. seq., 1780(e), and the Unfair Business Practices and False Advertising Act of Calif. Bus. and Prof. Code 17200, 17500, et. seq.” Motion (dkt. 23) at 3. 1. Entitlement to Fees Under Section 1717 of the California Civil Code, “in any action on a contract, where the contract specifically provides for an award of attorney fees and costs, which are incurred to enforce that contract[,]. . .” the prevailing party is entitled to reasonable attorneys’ fees. Cal. Civ. Code § 1717. Vodonick alleges that the vehicle lease agreement between Volkswagen and Vodonick “contained a provision providing that the prevailing party would have his reasonable attorney fees as additional damages.” See Reply (dkt. 26) at 2–3; Amended and Supplemental Complaint (MDL dkt. 7335) ¶ 16. Vodonick argues that because he asserted breach of contract as a cause of action, this litigation is “[an] action on a contract, where the contract specifically provides for an award of attorney fees and costs.” Cal. Civ. Code § 1717; Reply (dkt. 26) at 2–3. Although Vodonick did not attach the lease agreement to his complaint or his motion for attorneys’ fees, Volkswagen did not directly dispute that Vodonick’s lease agreement contains an attorneys’ fee provision. See generally Opp’n (MDL dkt. 7678). Thus, California Civil Code Section 1717 provides a basis upon which Vodonick is entitled to recover attorneys’ fees.1 1 Vodonick is not entitled to fees on any other basis. Vodonick did not discuss Section 1021.5 of the California Code of Civil Procedure beyond a singular reference to it in his moti

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Vodonick v. Volkswagen Aktiengesellschaft, (N.D. Cal. 2020).

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