The VW Class Action Lawsuit
Volkswagen has settled a massive class-action lawsuit brought by the Class of 2021 which charges the automaker with intentionally misleading the public on emissions levels of their diesel cars. Additionally, sued are VW’s then-acting head of communications Mark Gillies and Chief Executive Officer Scott Keogh. The VW class-action lawsuit names “others or persons who purchased or otherwise acquired [ Volkswagen’s] common stock between March 29, 2021, and March 31, 2021.” In addition to the named executives, the lawsuit also names “others or persons” who worked at various other VW facilities including VW factory in Mexico, VW Service facility in California, VW dealer in Tennessee, VW service facility in Washington, as well as VW franchised dealerships.
The class-action lawsuit is one of several lawsuits VW has been facing over the emissions cheating that occurred during the Mexico auto manufacturer’s development process.
On March 4th, the U.S. Environmental Protection Agency issued a final rule after a four-year study on the Mexican car manufacturing plant’s emissions. The rule, according to the EPA, requires all new Mexican car manufacturers to fix or modify their exhaust systems to pass the highest standards of air quality throughout the entire manufacturing process. Since VW had a significant stake in the outcome of this rule, they were given three additional weeks to produce a plan to comply with the new EPA regulations.
According to the class-action lawsuit, Volkswagen repeatedly failed to repair their vehicles and leave the nitrogen exhaust untreated even though it was documented in numerous internal reports from outside sources. Additionally, the complaint states that because the company did not want to spend the additional three months to fix their cars, they instead chose to cheat the U.S. consumers and get away with it. On at least one occasion, the complaint states that a VW engineer suggested to a manager to add a drain valve to the engine so that the car could pass all of the EPA requirements and still meet their low emission standards.
In September of last year, the U.S. District Court for the Eastern District of California approved a class-action lawsuit against VW stating that the manufacturer’s fiduciary responsibility was not met when they approved the design of the nitrogen tanks and the new drain valves.
Class members claim that Volkswagen deliberately kept these devices out of their vehicles so that they could avoid meeting the requirements and regulations set forth by the EPA. Some class vehicles have such valves while others do not. The complaint further states that the EPA’s regulations and requirements do not apply to cars with the ” Sequent” diesel models because the cars do not contain the tank system that holds the drain valves.
As part of the settlement offer in the VW Class Action Lawsuit, Volkswagen will pay each plaintiff a share of the profits from future diesel vehicle sales.
The amount of payments is calculated on a per-vehicle basis and not on a per vehicle engine combination basis. In addition to the payments to individual plaintiffs, Volkswagen will pay for legal fees to the attorneys who handled the class action lawsuit. VW has also agreed to provide support for the programs set forth by the United States Environmental Protection Agency.
A final ruling from the court is expected any time soon. If no settlement agreement is reached, then a new lawsuit will be filed in the next several months. If no settlement agreement is reached within about three months, then the case will go forward to a jury trial. At that time, a judge will preside over the lawsuit and determine who among the VW diesel drivers will be designated as the class representative. A smaller class may have a smaller percentage of potential plaintiffs, but if there are a larger number of class representatives the larger class will have a higher percentage of potential plaintiffs.
VW has agreed to accept the class-action lawsuit as a result of what one judge called the “cumulative damages clause.” This means that if multiple class-action lawsuits are filed against the carmaker, a larger percentage of its vehicles will be covered. The carmaker has also promised to provide details about the settlements and who will be responsible for them.
Class-action lawsuits have been proven to be the best way to handle large settlements, especially when dealing with companies like VW.
When a settlement is reached, it will be handled by a smaller group of attorneys. VW faces more than one class-action lawsuit so it may be advantageous for the carmaker to handle the case as a class action. Class action lawsuits also prevent large litigations from spreading too thin within the time allowed for a court case. As long as a settlement is reached, a smaller number of attorneys will have to handle the case, allowing the plaintiff’s attorney to focus on gathering information and trying to negotiate a reasonable settlement.
