Nearly 200 Class Action Suits Filed Against Volkswagen

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Summary: Since Volkswagen revealed it manipulated numbers on emissions tests last month, close to 200 class action lawsuits have been filed against the auto manufacturer.

According to the National Law Journal, the legal problems Volkswagen faces continue to pile up.

  

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Over 175 class actions in 31 states have been filed against the vehicle manufacturer in response to the emissions scandal that emerged in September. CNNMoney estimates that the suits may end up costing Volkswagen an incredible $87 billion.

Almost every single suit has been filed on behalf of consumers who allege they were tricked into paying high prices for “clean diesel” vehicles that surpassed regulatory standards in the United States. Dealership franchises also filed a number of suits.

These cases are in addition to investigations pending on behalf of the U.S Justice Department, the U.S. Environmental Protection Agency, and attorneys general in over 28 states.

An Atlanta firm was one of the first to sue Volkswagen.

The case is unique in that, in contrast to past class action suits against vehicle manufacturers, the allegations against Volkswagen do not involve any injuries or deaths. However, plaintiffs’ attorneys argue that the manufacturer misrepresented the facts about its diesel vehicles to consumers.

David Vendler, a partner with Morris Polich & Purdy in Los Angeles, said, “There’s chum in the water. All the sharks are swimming.” Vendler, on September 23, became the first attorney to move to coordinate the pending cases.

The U.S. Environmental Protection Agency notified Volkswagen on September 18 that some models of its diesel vehicles that were manufactured in 2009 or later contained a “defeat device” that was used to cheat emissions tests, violating the Clean Air Act. The device was located in 11 million vehicles, including 482,000 in the United States. The vehicles, according to the EPA, emit as much as 40 times the standard for nitrogen oxides.

Martin Winterkorn, the CEO of Volkswagen, recently resigned in light of the scandal. German officials have also initiated a criminal investigation into Volkswagen. BBC adds that France and Italy have also opened their own investigations. Volkswagen also launched an external investigation, which will be headed by Jones Day.

A number of the suits seek reimbursement for the high prices that were paid for vehicles. Other suits want more than just money.

Volkswagen retained Kirkland & Ellis.

Frank Pitre of Cotchett, Pitre & McCarthy, a law firm in Burlingame, California, said, “Even if you give them a fix that is only to meet EPA regulations, they still didn’t get the fuel efficiency they wanted. Those folks might say: ‘I want my money back.’ ”

Cody Guarnieri of Brown Paindiris & Scott filed the first class action in Connecticut federal court against Volkswagen. His clients seek a free replacement program or a recall. He commented, “They can’t continue to be driven in the long term.”

Plaintiffs’ attorneys have been working to consolidate the class actions so that they may be heard by a single judge. The U.S. Judicial Panel on Multidistrict Litigation, the body that decides whether such a request will be granted, may not hear these attorneys’ arguments until December 3, when a hearing in New Orleans is scheduled.

One possible venue is the Eastern District of Virginia. Volkswagen’s U.S. headquarters is located in Herndon, Virginia. Volkswagen Group of America Inc. has been listed as a defendant in almost every single suit, and Audi A.G., a subsidiary, has been listed in a few cases as well. Audi A.G. is also based in Herndon.

Warren Burns, a partner with Burns Charest in Dallas, said, “We think that there’s certainly going to be witnesses and evidence centered in that district. It’s been my experience in cases of this size and complexity that invariably you’ll be drawn by the decision-makers, and those folks are in the headquarters.”

The Eastern District of Virginia is also not too far from Washington, D.C., which would be an additional benefit, Burns explained, since the Department of Justice may coordinate its investigation with the pending suits.

Wyn Hornbuckle, a Department of Justice spokesperson, said, “The Department of Justice is working closely with the EPA in the investigation into these allegations. We take these allegations, and their potential implications for public health and air pollution in the United States, very seriously.”

Volkswagen is expected to file a motion on the issue by October 20.

Still, other attorneys have argued that New Jersey is a better venue. Diane Sammons, an attorney with Nagel Rice in Roseland, New Jersey, said that New Jersey would be the proper venue since Volkswagen is incorporated there. Further, it maintains its Eastern U.S. regional office, technical center, test-vehicle fleets, products liaison group, and parts distribution center in New Jersey.

In August, Volkswagen was forced to sell its Suzuki shares.

A third group of attorneys has pushed for the cases to be heard in California. The California Air Resources Board helped the EPA discover the “defeat devices.” Two electronics research labs in the Bay Area were also involved in recent testing of renewable fuels in Volkswagen diesel vehicles. Pitre explained, “We think there’s a gold mine of information here in Belmont about how bad these vehicles were performing and, what’s worse, continuing to tout these vehicles were performing very well and even better with renewable fuels.”

A case against Volkswagen has also been filed in Texas state court, where $100 million in civil penalties is sought, and in South Carolina state court, where two cases have been filed under the South Carolina Manufacturers, Distributors and Dealers Act. Both South Carolina cases name Volkswagen and an individual franchise dealership as defendants. Under the act, plaintiffs may be eligible for triple damages. Badge Humphries, a partner at Lewis, Babcock & Griffin in Columbia, South Carolina, said, “South Carolina will be better treated by having their claims litigated in state court pursuant to state law, sent to a state court judge who’s trained in administering South Carolina law.”

Source: National Law Journal

Photo credit: USA Today, mpplaw.com (Vendler), cmplegal.com (Pitre), bpslawyers.com (Guarnieri), burnscharest.com (Burns), nagelrice.com (Sammons), lpglegal.com (Humphries)