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In Re: Volkswagen and Audi Warranty Extension Litigation v. Peter J. Mcnulty Law Firm; Irwin & Boesen, P.C

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Before Lynch, Chief Judge, Selya and Boudin, Circuit Judges.

This appeal is from the district court’s award of $30 million in attorneys’ fees to several groups of plaintiffs’ attorneys who achieved a class action settlement agreement. It presents the question of what source of law governs the award of such fees in a diversity suit, where the parties’ settlement agreement contains, inter alia, a provision expressly stating that the parties have not agreed on the source of law to apply to the fee award. We hold that under these circumstances, where there is an agreement that the defendants will pay reasonable fees, state law governs the award of fees. We vacate the fee award, which was based on federal sources of law, and remand for a new determination of the proper reasonable fee award under the relevant state law.

I.

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