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Toyota embroiled in nasty fight over legal fees for Prius class action suit

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Toyota may have agreed to pay the US government $1.2 billion to settle a 4-year federal investigation regarding the company’s deliberate attempt to mislead regulators regarding unintended acceleration of some of its vehicles, but the Japanese automaker is still objecting to what it claims are exorbitant fees (totaling $1.7 million) being charged by 5 class action laws firms to negotiate a $3.8 million class-action suit against the company regarding defective headlights in Prius cars in 2011. At that time Toyota agreed to extend the warranty on close to 200,000 vehicles and refund repair costs for some of the owners.

Although US District Judge Manuel Real agreed to slash the lawyers’ fees to $766,000 at the time, deeming that “with less than 12,000 consumers claiming damages against the Japanese automaker, the fees for the plaintiff’s lawyers worked out to be $272 per case (or ¾ of the $364 average payout),” the firms were able to successfully appeal it in December 2013. As a result, the 9th Circuit Court of Appeals has decided to require the judge to reconfigure compensation based on billing documents supplied by the firms for work actually performed in regard to the litigation, rather than Real’s contention that “lawyers’ fees to negotiate the settlement “should be no more than a talent agent’s 20% cut of the action.”

Meanwhile, Toyota alleges that the billing records and attorney declarations of the firms involved “are contrary and unreliable, and rife with evidence of inefficiency, duplication and make-work, at rates as high as $710 an hour.”

A federal judge is scheduled to hear arguments regarding the issue April 7th