Rieger v. Volkswagen Grp. of Am.

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JENI RIEGER, et al., Plaintiffs, v. VOLKSWAGEN GROUP OF AMERICA, INC., a New Jersey corporation, d/b/a AUDI OF AMERICA, INC., Defendant.

No. 21-cv-10546-ESK-EAP

United States District Court, D. New Jersey

May 16, 2024

OPINION

Edward S. Kiel United States District Judge

THIS MATTER is before the Court on plaintiffs' unopposed motion for attorney's fees, costs, and service awards (ECF No. 90) and plaintiffs' motion for an order granting final approval of the settlement (ECF No. 101). I held a motion hearing on May 13, 2024. For the following reasons, the motions will be GRANTED.

I. BACKGROUND AND PROCEDURAL HISTORY

The original complaint was filed in April 2021 (ECF No. 1) and thereafter twice amended to add additional plaintiffs (ECF Nos. 11, 36, 101-2 ¶¶2, 3). In August 2021, the Gonzalez action was filed in New Jersey Superior Court and later removed to this District (ECF No. 38-1 ¶¶7, 9) and consolidated with this action (ECF No 42). Plaintiffs filed a 36-count consolidated class-action complaint asserting breach of express and implied warranties violation of various state consumer-protection statutes, and fraud stemming from an alleged defect common to class vehicles by which piston rings failed to seat properly-leading them to fracture under heat and pressure and, in turn, cause issues including excessive oil consumption and engine damage. (ECF No. 45.)

On May 4, 2023, Judge Noel L. Hillman (Ret.) granted in part and denied in part defendant's motion to dismiss, concluding, in part, that plaintiffs failed to demonstrate standing to assert common-law claims on behalf of a nationwide class, and provided plaintiffs 30 days to specify their allegations and address the standing issue. (ECF Nos. 65, 66.) Plaintiffs filed an amended consolidated class-action complaint on June 2, 2023. (ECF No. 67.)

A. Proposed Settlement

At roughly this same time, during Spring 2023, the parties began settlement discussions and informally exchanged information including the condition of class vehicles and defendant's ameliorative efforts. (ECF No. 1012 ¶8.) Settlement discussions picked up during the summer with two mediation sessions before Bradley A. Winters of JAMS, resulting in agreed-upon settlement terms. (Id. ¶¶9, 10.) Negotiations for attorney's fees and incentive awards took place after the parties agreed to the settlement terms. (Id. ¶ 11.) On October 19, 2023, Judge Hillman entered an order preliminarily approving the settlement. (ECF No. 84.)

As is discussed below, a class has not yet been certified. The settlement defines settlement class vehicles as certain model year 2012, 2013, and 2014 Audi A4, A5, A6, and Q5 vehicles; 2012, 2013, 2014, 2016, and 2017 Audi TT vehicles, and 2015, 2016, and 2017 Audi A3 vehicles imported and distributed by defendant for sale or lease in the United States or Puerto Rico and designated by vehicle identification number (VIN). (ECF No. 82-3 p.11.) The settlement class refers to individuals and entities who purchased or leased a settlement class vehicle, excluding various groups including those who have previously reached a settlement and release-of-claim with defendant and those who have timely and properly requested to be excluded from this settlement. (Id. pp. 10, 11.)

The settlement provides two general types of relief. First, the settlement extends the warranty for current owners and lessees to nine years or 90,000 miles of the vehicle's in-service date, whichever occurs first, during which defendant will cover 75 percent of the repair cost by an authorized Audi dealer for Audi A4, A5, A6, Q5, and 2012-2014 Audi TT settlement class vehicles (First Settlement Class Vehicles) diagnosed as having excessive oil consumption by an authorized Audi dealer or 75 percent of the repair cost by an authorized Audi dealer for Audi A3 and 2016-2017 Audi TT settlement class vehicles (Second Settlement Class Vehicles) diagnosed with a fractured piston by an authorized Audi dealer. (Id. p.12.) For comparison, the applicable new vehicle limited warranties were for four years or 50,000 miles, whichever occurred first. (ECF No. 101-1 p.18.) The warranty extension also covers a percentage of repair costs by an authorized Audi dealer for diagnosed engine damage directly caused by excessive oil consumption for First Settlement Class Vehicles and engine damage-other than piston damage-caused by a fractured piston for Second Settlement Class Vehicles, with the applicable percentage subject to a sliding scale based on the age and mileage of the vehicle. (ECF No. 82-3 pp. 12, 13.) The extended warranty is transferable to subsequent owners subject to the same mileage and vehicle-age maximums and was extendable by up to seventy days after the notice date of January 29, 2024 if the extended warranty expired as of the notice date and the vehicle had not yet reached 90,000 miles. (Id. pp. 13, 14.)

The second type of relief is reimbursement of out-of-pocket costs for one past repair performed within nine years and 90,000 miles of the in-service date for which a settlement class member has timely and fully completed a claim for reimbursement. (Id. p. 14.) The reimbursement of 75 percent of the paid and unreimbursed cost applies to First Settlement Class Vehicles with a diagnosed condition of excessive oil consumption or Second Settlement Class Vehicles diagnosed with a fractured piston. (Id.) Similar to the extended warranty, the reimbursement also applies to a percentage of one past repair for engine damage performed prior to the notice date but within nine years and 90,000 miles for First Settlement Class Vehicles if the engine damage was diagnosed as being directly caused by excessive oil consumption and Second Settlement Class Vehicles if the engine damage-other than a damaged piston-was diagnosed as being directly caused by a fractured piston. (Id. p. 15.) Enginerepair reimbursements are subject to the same sliding scale as the warranty extension. (Id.) If the repair was not conducted by an authorized Audi dealer, the maximum value of the unreimbursed repair to which the applicable percentage is to be applied is $3,700 for First Settlement Class Vehicles with an unreimbursed repair for excessive oil consumption, $12,000 for First Settlement Class Vehicles with an unreimbursed repair for engine damage directly caused by excessive oil consumption, and $9,000 for Second Settlement Class Vehicles with an unreimbursed repair for a fractured piston or engine damage-other than piston damage-caused by a fractured piston. (Id.)

The relief is subject to various requirements and exceptions including necessary proof of adherence to maintenance requirements; exceptions for damage caused by abuse, modification or alteration of parts, insufficient maintenance, and collision; and a requirement that-for past repairs not made by an authorized Audi dealer-the class member submit documentation or a declaration that the class member first sought to have the repair performed at an authorized Audi dealer. (Id. pp. 12-16.)

B. Notice to Class

As approved by Judge Hillman (ECF No. 84) the notice plan provided for a thorough class-member-identification process by which defendant was to provide VINs for the administrator to thereafter use to locate class members' mailing addresses for mailing of notices via first-class mail within 100 days of preliminary approval (ECF No. 82-3 pp. 19, 20). The administrator was to also maintain a website with pertinent information including copies of the settlement and class notice and instructions on how to submit a claim form and contact the administrator or counsel for assistance. (Id. pp.20, 21.)

In practice, the administrator utilized the 205,152 VINs provided by defendant, acquired contact information through registration information from the departments of motor vehicles of all 50 states as well as territories, identified 533,690 potential class members,^[1] and mailed the class-notice, claim form, and other pertinent information to each class member on January 29, 2024. (ECF No. 101-4 ¶¶4, 5, 8.) For the 54,131 notices returned undeliverable, the administrator re-mailed 4,746 notices to forwarding addresses provided by the United States Postal Service and an additional 29,757 notices with updated addresses obtained through additional research. (Id. ¶ 10.) Also on January 29, 2024, the administrator established a settlement website-PistonSettlement.com-which featured copies of the settlement and notice, a claim form, and form declarations and received 39,420 page views from 15,923 unique users. (Id. ¶¶ 11, 12.) Additionally, a casespecific toll-free telephone number was set up, which received 4,279 calls. (Id. ¶¶ 13, 14.)

Finally, the terms of the settlement required that an objector must have filed notice of their intent to appear for the hearing on the motions. (ECF No. 82-3 pp.23, 24.) No objector expressed an intent to appear for the hearing and no objector otherwise attended the May 13, 2024 motion hearing.

II. DISCUSSION

A. Class Certification

The proposed settlement class has not yet been certified. The requirements of Rule 23(a) must be met no matter whether certification is sought for the purpose of proceeding with litigation or, as here, for the purpose of proceeding toward settlement. See Rodriguez v. Nat'l City Bank, 726 F.3d 372, 379 (3d Cir. 2013). Those prerequisites are numerosity, commonality, typicality, and adequacy. Fed.R.Civ.P. 23(a); In re Nat'l Football League Players Concussion Injury Litig., 821 F.3d 410, 426 (3d Cir. 2016).

If that threshold is met, courts must then determine whether the class meets the requirements of one of the three categories of class actions in Rule 23(b). In re Nat'l Football League Players Concussion Injury Litig., 821 F.3d at...