Newspaper article International New York Times

Lawyers in U.S. Jostle for Lead in VW Cases

Newspaper article International New York Times

Lawyers in U.S. Jostle for Lead in VW Cases

Article excerpt

Plaintiffs' representatives will argue over where tens of thousands of claims should be heard and which lawyers will get the biggest piece of the action.

The first battle in the legal assault on Volkswagen is unfolding as plaintiffs' lawyers jockey over where tens of thousands of claims should be heard and which lawyers will get the biggest piece of the action.

Across the United States, more than 350 lawsuits have been filed on behalf of consumers against Volkswagen over its rigged diesel vehicles, according to a law firm representing the company. To streamline the sprawling litigation, a panel of federal judges is expected to soon send those cases to a single court, where a judge will appoint a small group of plaintiffs' lawyers to steer the case.

That approach has been used dozens of times in mass lawsuits involving cars, drugs and other products. But concern is growing among legal scholars that a small circle of law firms has come to dominate the process and that some settlements have benefited the lawyers more than their clients.

One recent study found that about two dozen firms played leading roles in 10 or more major lawsuits. Five of those firms spearheaded 20 or more.

Legal scholars say the prevalence of such "repeat players," which earn the biggest fees, may create an environment that is detrimental to plaintiffs. The worry is that lawyers may fear opposing settlement terms because they do not want to be frozen out of future cases.

"This does not lead to a healthy atmosphere for dissent," said Elizabeth Burch, a professor at the University of Georgia School of Law, who wrote the study.

Last month, Volkswagen officials said they were setting aside $7.3 billion to deal with the fallout from the scandal, in which the company used software to make it appear that its diesel cars were meeting air emissions standards. Volkswagen recently acknowledged that the deception's eventual costs may be far higher than estimated. Along with lawsuits from car buyers in the United States and abroad, the company also faces actions from regulators and state attorneys general.

In their lawsuits, consumers are arguing that Volkswagen defrauded them with false claims about the performance of its diesel engines and are asking to be compensated for the premium prices paid for the vehicles and the cars' diminished resale value. Some plaintiffs' lawyers are demanding that Volkswagen buy back the cars.

"That is the doomsday scenario for VW," said Hunter J. Shkolnik, a plaintiffs' lawyer in New York.

With so much money at stake, a chase by lawyers for top positions in the Volkswagen case has already begun.

In early December, a six-judge committee known as the Judicial Panel on Multidistrict Litigation is expected to hear arguments at a hearing in New Orleans about where to consolidate the federal lawsuits against Volkswagen.

Lawyers, in filings, are already trying to make their case for jurisdictions that they consider favorable for them. Eager to find a judge they have worked with, lawyers are also making pitches about which one should handle the Volkswagen litigation.

A lawyer in Minneapolis, Charles S. Zimmerman, is calling for the case to be heard in Detroit because it is the "Motor City." A San Diego lawyer, Benjamin Galdston, said it should be heard near Los Angeles because many Volkswagen lawsuits have been filed there. And a lawyer in Dallas, Warren T. Burns, would like to see the Volkswagen case moved to Alexandria, Va., because the carmaker's United States headquarters are nearby in Herndon, Va. "Everyone wants to find the best place for this case," said Robert Hilliard, a lawyer in Corpus Christi, Tex., who has asked the panel to send the Volkswagen case there.

Wherever the case goes, a judge will select a "plaintiffs' steering committee," typically, a group of about 10 lawyers, to lead it. Those posts carry prestige -- law firms promote the roles on their websites -- and the potential to make tens of millions of dollars in added fees. …

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