Vodonick v. Volkswagen Aktiengesellschaft

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

Opinion

1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT 6 FOR THE NORTHERN DISTRICT OF CALIFORNIA 7 8 JOHN VODONICK, Case No. 16-cv-00219-CRB

9 Plaintiff, ORDER GRANTING IN PART 10 v. MOTION FOR ATTORNEYS' FEES AND COSTS 11 VOLKSWAGEN AKTIENGESELLSCHAFT, et al., 12 Defendants. 13 14 Plaintiff John Vodonick opted out of the class action settlements that resolved most 15 civil actions against Volkswagen AG and Volkswagen Group of America. Vodonick later 16 accepted Volkswagen’s Rule 68 offer. As permitted by that offer, he now moves for 17 attorneys’ fees and costs. The Court awards Vodonick $21,175.00 in fees. 18 I. BACKGROUND 19 This Court has previously described the events that are the basis for Vodonick’s 20 claims:

21 Over the course of six years, Volkswagen sold nearly 500,000 Volkswagen– and Audi-branded TDI “clean diesel” vehicles, 22 which they marketed as being environmentally friendly, fuel efficient, and high performing. Consumers were unaware, 23 however, that Volkswagen had secretly equipped these vehicles with a defeat device that allowed Volkswagen to 24 evade United States Environmental Protection Agency (“EPA”) and California Air Resources Board (“CARB”) 25 emissions test procedures. Specifically, the defeat device produces regulation-compliant results when it senses the 26 vehicle is undergoing testing, but operates a less effective emissions control system when the vehicle is driven under 27 normal circumstances. It was only by using the defeat device engine vehicles. In reality, these vehicles emit nitrogen oxides 1 (“NOx”) at a factor of up to 40 times over the permitted limit. 2 In re: Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab. Litig., No. 15-md- 3 02672-CRB (JSC), 2016 WL 6248426, at *1 (N.D. Cal. Oct. 25, 2016). The scandal led to 4 numerous government actions and over a thousand civil lawsuits, which were consolidated 5 before this Court by the Judicial Panel on Multidistrict Litigation. Id. at *2. The bulk of 6 the civil actions were resolved in two settlements (one concerning 2.0-liter TDI vehicles 7 and another for 3.0-liter TDI vehicles) approved by the Court. See generally In re: 8 Volkswagen, 2016 WL 6248426; 3.0-Liter Class Action Settlement Approval Order 9 (dkt. 3229). 10 Vodonick opted out of the Class Settlements. See List of Opt-Outs (MDL 11 dkt. 2102-1) at 37. He sued Volkswagen in California Superior Court in October 2015. 12 Brief (dkt. 23-1) at 2. Vodonick requested leave to petition for judicial coordination, 13 which Volkswagen did not oppose. Opp’n (MDL dkt. 7678) at 3. Before Vodonick’s 14 petition was decided, in December 2015, Volkswagen removed the case to the Eastern 15 District of California, which transferred it to the MDL before this Court in January 2016. 16 Id. at 3–4. Once the case was transferred to the MDL, the Court immediately stayed it. 17 (MDL dkt. 2) at 1, 3. The Court denied Vodonick’s subsequent requests for remand. See 18 Orders Denying Remand (MDL dkt. 6126, 7522), (dkt. 21). In April 2020, Vodonick filed 19 a First Amended and Supplemental Complaint, which included Song-Beverly Act, breach 20 of contract, unfair business practices, fraud, and product liability claims. FAC (MDL 21 dkt. 7335) at 1. 22 On June 9, 2020, the Court lifted the stay. (MDL dkt. 7515). The same day, 23 Volkswagen served Vodonick with a Rule 68 offer of $40,000, which Vodonick accepted. 24 Opp’n (MDL dkt. 7278) at 9; Notice of Acceptance (dkt. 22). The offer allowed Vodonick 25 to seek reasonable fees and costs to be determined by the Court. Notice of Acceptance 26 (dkt. 22) at 2. 27 Vodonick now requests $1,143,935 in fees and $2,144 in costs. Brief (dkt. 23-1) at 1 Vodonick is entitled to only a fraction of the fees that he requests. Opp’n (MDL 2 dkt. 7678) at 4–5, 7. 3 II. LEGAL STANDARD 4 When a federal court has subject matter jurisdiction over a case based on diversity 5 of the parties, state law determines a party’s entitlement to attorneys’ fees and costs. 6 Mangold v. Cal. Pub. Util. Comm’n, 67 F.3d 1470, 1478 (9th Cir. 1995). Under California 7 law, “in any action on a contract, where the contract specifically provides for an award of 8 attorney fees and costs, which are incurred to enforce that contract[,]. . .” the prevailing 9 party is entitled to reasonable attorneys’ fees. Cal. Civ. Code § 1717. 10 If a plaintiff is entitled to attorneys’ fees, California determines the amount using 11 the lodestar method, which “first calculates the number of hours reasonably spent 12 multiplied by the reasonable hourly rate for each billing professional, and then . . . 13 adjust[s] the amount based on various relevant factors to ensure the fee reflects the fair 14 market value of the attorney services for the particular action.” K.I. v. Wagner, 225 Cal. 15 App. 4th 1412, 1425 (Cal. Ct. App. 2014) (internal quotation marks and alterations 16 omitted). It is the prevailing party’s burden to show that the fees it seeks are reasonable. 17 Nightingale v. Hyundai Motor Am., 31 Cal. App. 4th 99, 104 (Cal. Ct. App. 1994). 18 In the absence of a state law provision that allows for the award of costs “as a part 19 of substantive, compensatory damages scheme,” Rule 54(d) of the Federal Rules of Civil 20 Procedure governs an award of costs in federal district court. See Champion Produce, Inc. 21 v. Ruby Robinson Co., 342 F.3d 1016, 1022 (9th Cir. 2003); Clausen v. M/V NEW 22 CARISSA, 339 F.3d 1049, 1065 (9th Cir. 2003). Rule 54 allows the prevailing party to 23 recover costs, not including attorneys’ fees, unless a federal statute, court order, or other 24 federal rule provides otherwise. Fed. R. Civ. P 54(d)(1). 25 26 27 1 III. DISCUSSION 2 A. Attorneys’ Fees 3 Vodonick seeks $1,143,935 in attorneys’ fees. Brief (dkt. 23-1) at 3. Volkswagen 4 argues that Vodonick is not entitled to fees because he has not established a basis for fee- 5 shifting. Opp’n (MDL dkt. 7678) at 2. Vodonick argues that he is entitled to fees because 6 he is the prevailing party under “. . . Calif. Code of Civil. Proc. § 1021.5, Calif. Civ. Code 7 §§ 1717, 1790, et. seq., 1780(e), and the Unfair Business Practices and False Advertising 8 Act of Calif. Bus. and Prof. Code 17200, 17500, et. seq.” Motion (dkt. 23) at 3. 9 1. Entitlement to Fees 10 Under Section 1717 of the California Civil Code, “in any action on a contract, 11 where the contract specifically provides for an award of attorney fees and costs, which are 12 incurred to enforce that contract[,]. . .” the prevailing party is entitled to reasonable 13 attorneys’ fees. Cal. Civ. Code § 1717. 14 Vodonick alleges that the vehicle lease agreement between Volkswagen and 15 Vodonick “contained a provision providing that the prevailing party would have his 16 reasonable attorney fees as additional damages.” See Reply (dkt. 26) at 2–3; Amended and 17 Supplemental Complaint (MDL dkt. 7335) ¶ 16. Vodonick argues that because he asserted 18 breach of contract as a cause of action, this litigation is “[an] action on a contract, where 19 the contract specifically provides for an award of attorney fees and costs.” Cal. Civ. Code 20 § 1717; Reply (dkt. 26) at 2–3. Although Vodonick did not attach the lease agreement to 21 his complaint or his motion for attorneys’ fees, Volkswagen did not directly dispute that 22 Vodonick’s lease agreement contains an attorneys’ fee provision. See generally Opp’n 23 (MDL dkt. 7678).

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

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