VW: Restraining order bid is just maneuver by class action firm

October 6, 2015

Can hundreds of class action lawyers be wrong?

Every day brings another clutch of filings against Volkswagen by clean diesel car owners who claim the automaker lied about their cars’ noxious emissions. Plaintiffs’ lawyers seem to regard the litigation against VW as a sure thing, thanks in no small part to the company’s own admissions. They’re assuming the case won’t be about whether VW is liable to car owners but about how much the company is going to have to pay.

Many plaintiffs’ firms are of the view that class members will be best served if they are put in charge of the litigation once it is (inevitably) consolidated. A leadership team won’t be selected until after the Judicial Panel on Multidistrict Litigation picks a judge to oversee the case but as I told you right after the first class actions were filed, plaintiffs’ lawyers start thinking very early about the arguments they will eventually make to win an appointment to the lead counsel committee.

You see some of the jockeying in filings at the JPML. Why is a particular firm recommending consolidation before a particular judge? Why is one class action firm backing another’s recommendation? I would never be so cynical as to call such filings sheer politics – I’m sure plaintiffs’ lawyers have sincere motives – but angling for lead counsel assignments has become a routine and expected feature of big consolidated litigation. (Defense lawyers, of course, do the same thing when they pitch clients, just not in public filings.)

I told you yesterday about Keller Rohrback‘s application for a temporary restraining order in one of the Los Angeles federal court class actions against VW, asking U.S. District Judge George Wu to bar the company from sending misleading communications to class members. Volkswagen’s U.S. subsidiary responded last night to the TRO application – and, according to VW, it is nothing more than “a tactic for plaintiffs’ counsel to attempt to better position themselves as lead counsel in the hundreds of class actions that they and others have filed against various Volkswagen and Audi defendants.”

Volkswagen Group of America, which is represented by Mayer Brown and Herzfeld & Rubin, has lots of other arguments against the TRO request, which it calls a bid for an overly broad prior restraint on the company’s First Amendment right to ordinary communications with its customers. The TRO, it contends, would prevent it from notifying some car owners about unrelated safety recalls or warranties – and all because of the “speculative fear and pecuniary interest” of Keller Rohrback. According to VW, the plaintiffs’ firm has “no evidence whatsoever” that the company is “slyly contacting putative class members and trying to secretly induce them to opt out of any class.”

But Volkswagen also seems to do some of its own angling in the TRO opposition. The Central District of California is one of the likeliest sites for consolidation of the VW litigation. California has more clean diesel car owners than any other state, VW’s testing facility was in California, and state investigators helped expose the company’s alleged emissions-testing deception. VW hasn’t yet told the JPML where it wants the cases ultimately to be consolidated, but, as it disclosed in the TRO filing, it is already taking action to consolidate the Los Angeles federal court cases before U.S. District Judge Margaret Morrow, who was assigned the first California emission-testing class action against VW.

If Judge Morrow ends up overseeing all early procedural issues in the district that has been the site of more VW class actions than any other, that’s a strong argument to send the entire litigation to her.

Meanwhile, another Los Angeles federal judge made the unusual decision to reject a pro hac vice application by a prominent plaintiffs lawyer in a VW class action. On Friday, U.S. District Judge Dale Fischer denied temporary admission to Hagens Berman partner Steven Berman, ruling that Berman’s own application disclosed he has appeared in 34 cases in the Central District alone in the past three years. Such “substantial business,” Fischer said, disqualifies Berman from pro hac vice status.

I emailed Berman to ask whether Judge Fischer’s order would handicap his chances of being appointed lead counsel if the VW cases end up in California. He said it would not because “usually, and I’m sure this will happen here, judges in MDLs automatically grant pro hac” applications.

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