Volkswagen Prepares for Emissions Test Lawsuits
Ever since the Environmental Protection Agency (EPA) disclosed on September 18 that Volkswagen had admitted to installing software on nearly 500,000 its “Clean Diesel” cars that essentially cheats on emissions tests, plaintiffs and their lawyers have been filing lawsuits all over the country in an effort to recover any losses to the value of their vehicles or any other damages they have suffered as a result.
According to the Volkswagen disclosure, as many as 11 million vehicles worldwide contain what EPA officials refer to as defeat devices, which is what they call software that disables emissions controls under normal driving conditions, while fooling emissions testing equipment into thinking the vehicles are running cleaner than they are during the test.
Recently, more than 500 civil lawsuits filed against Volkswagen over the software were consolidated and will be heard by U.S. District Judge Charles Breyer in the Northern District of California. That decision was made by the U.S. Judicial Panel on Multidistrict Litigation. Previously, both Volkswagen and attorneys from the US Department of Justice had petitioned the panel to move the cases to Detroit, with plaintiffs’ lawyers from all over the country suggesting a wide range of venues, including New Jersey, Massachusetts, Ohio and Illinois.
The panel settled on the Northern District of California in San Francisco, however, because that is where the first case in the country against Volkswagen had been filed. The panel noted that the current litigation is international in scope, that nearly 20 percent of the cases filed so far have been brought in California and that research by the California Air Resources Board was critical when it came to discovering Volkswagen’s alleged emissions fraud. The panel put off a decision as to whether the consolidated litigation should include a number of securities lawsuits, as well.
Basically, the lawyers for the plaintiffs have accused Volkswagen of defrauding consumers who are currently suffering from declining vehicle values. They are also looking for restitution to any Volkswagen owners who paid as much as a $6,000 premium for their vehicles, based on the company’s advertisement that "Clean Diesel" vehicles emitted fewer pollutants into the air, while not impacting horsepower or fuel economy.
Is VW Ready To Pay For Its Diesel Lies?
Volkswagen is apparently preparing to pay out a lot of money in compensation to those who have been wronged by this cheating scandal. The company has hired none other than Kenneth R. Feinberg, who is highly regarded as a specialist in administering compensation funds. He has previously established and implemented payout distributions after the 9/11 terrorist attacks, the BP oil spill in the Gulf of Mexico and the Boston Marathon bombing. He recently worked on the massive victim compensation program set up by General Motors as a result of that company's infamous ignition defect, which has been linked to at least 275 injuries and 124 deaths to date and which that company knew about for a decade and did nothing.
No specific numbers have been mentioned regarding payouts, but it is expected that the lawsuits will end up costing the company billions of dollars in damages, despite the fact that no accidents or injuries have been tied to these defects, as yet. Most of the damages in the cases have turned on the Volkswagen vehicles’ loss of value. In similar cases against Toyota several years back, that company agreed to pay vehicle owners more than $1.1 billion in federal class-action suit that was primarily related to the loss of resale value of vehicles due to the possibility of unintended acceleration.