VW Faces Barrage of Litigation in Scandal | News | HMG LLP

VW Faces Barrage of Litigation

August 31, 2017

Source: The Wall Street Journal by Mike Spector

Lawyers are moving to consolidate widespread litigation stemming from Volkswagen AG's emissions-cheating scandal, drawing the German automaker into a prolonged legal case expected to spur rafts of depositions and demands for billions of dollars in damages.

Plaintiffs' lawyers filed more than two dozen lawsuits in courts across the U.S. within days of the Environmental Protection Agency's Sept. 18 disclosure that Volkswagen admitted to cheating on emissions tests for nearly a half million diesel-powered cars sold since 2008.

Volkswagen says as many as 11 million vehicles worldwide employ what authorities call defeat devices or software that can make cars appear cleaner than they are during regulatory tests and disable emissions controls during normal driving conditions.

Now, lawyers across the U.S. are jockeying to move class-action lawsuits, expected to number in the hundreds, before one federal judge for a long-running case. Such consolidated lawsuits are called multidistrict litigation, or MDL, since they are culled from legal actions across different jurisdictions.

The plaintiffs' lawyers are accusing Volkswagen of defrauding consumers who are suffering declining vehicle values. They're also seeking recompense for consumers who paid higher prices—in some cases premiums exceeding $6,000—for models advertised as clean diesel cars with impressive horsepower, fuel economy and emissions. Advertisement

The suits are expected to seek billions of dollars of damages, lawyers said, though they haven't yet cited specific figures. While a judicial panel has yet to decide whether to consolidate the Volkswagen litigation, many lawyers expect action in coming weeks.

No doubt about it, there will be an MDL here, said Robert Clifford, a plaintiffs lawyer who sued Volkswagen in an Illinois federal court.This case will allow the full creative juices of the plaintiffs' bar to be on full display.

A Volkswagen spokeswoman declined to comment. The company over the weekend issued a fresh apology and launched a website that asks consumers to be patient while the company figures out how to address the affected vehicles.

The barrage from U.S. plaintiffs' lawyers adds to mounting pressure on Volkswagen, which faces criminal and regulatory probes across the globe. German prosecutors on Monday launched a criminal investigation of former Chief Executive Martin Winterkorn and other unnamed executives. Volkswagen shareholders and labor representatives are expected to meet Wednesday to discuss an interim report on the emissions-cheating scandal.

Mr. Winterkorn resigned under pressure last week and apologized for what he called unimaginable misconduct at Volkswagen while insisting he was unaware of company efforts to dupe emissions testers. In the U.S., Volkswagen also faces probes from the Justice Department, state attorneys general and regulators.

For Volkswagen, which set aside $7.3 billion to cover fallout from the emissions scandal, the legal motions from U.S. plaintiffs' lawyers make the German car maker poised to join the likes of General Motors Co. and Takata Corp. of Japan, both of which remain embroiled in their own consolidated litigation over faulty ignition switches and exploding air bags, respectively.

A consolidated litigation case, while streamlining U.S. lawsuits, would likely lead to current and former Volkswagen executives and employees being subjected to depositions for months or years. Lawyers are still deposing GM employees nearly two years after the Detroit auto maker began recalling millions of vehicles with defective ignition switches.

One legal motion filed last week seeks to put Volkswagen lawsuits filed in Florida, Oregon and several other states in a California federal court. The California federal court previously handled consolidated litigation arising from unintended acceleration issues in Toyota Motor Corp. vehicles and overstated fuel-economy claims from Hyundai Motor Co. and Kia Motors Corp. Another motion filed on Sunday seeks to move cases to Texas, before a judge who last year heard arguments related to GM's defective switches.

A panel of seven federal judges will ultimately decide whether to consolidate the Volkswagen litigation, weighing whether doing so would preserve legal resources and avoid duplicative or inconsistent rulings in different courts handling an onslaught of lawsuits. The panel consolidated GM litigation in a Manhattan federal court in part because the U.S. district there handled the company's 2009 bankruptcy proceedings.

Plaintiffs' lawyers often jockey ahead of such decisions to land plum assignments leading such consolidated cases before courts they believe will provide the most favorable outcomes.

The German auto maker's actions have already attracted some of the U.S. most aggressive plaintiffs' lawyers, including those involved in the consolidated GM litigation.

Steve Berman, a lawyer at Hagens Berman Sobol Shapiro LLP co-leading the consolidated GM case, sued Volkswagen in a San Francisco federal court the day the EPA disclosed the auto maker's emissions-test cheating.

Bob Hilliard, another co-leader in the GM case representing personal injury and wrongful death plaintiffs, sued Volkswagen in Texas last week. He obtained a temporary restraining order on Friday from a Texas judge requiring Volkswagen to preserve evidence and continue to refrain from selling the affected cars.

Volkswagen, the worlds largest automaker by sales through the first six months of this year, earlier this month told U.S. dealers to stop selling the affected vehicles, which include the Audi A3 compact and Volkswagen Jetta, Beetle, Passat and Golf with model years between 2009 and 2015.

Miles Mueller, a 53-year-old analyst at a local electric utility in San Antonio who signed onto Mr. Hilliard's lawsuit, just traded in a 2011 Volkswagen Jetta diesel car even though he got less than what he owes for it.

Mr. Mueller said he was attracted by advertisements trumpeting the Jetta as a clean diesel. That's why I bought the car, he said.

He wants Volkswagen to cut him a check for thousands of dollars that he would put toward debt on a new pickup truck he bought. You know what? I'd say, ˜OK, you know you messed up I'll never buy your product again. At least you…admitted it and we're done. 

the timing of your case is vital