What Should Virginia Diesel Owners Do?
The U.S. Department of Justice filed a civil lawsuit against Volkswagen on Monday for violating EPA rules and defrauding the public with software that falsifies emissions tests on many of their diesel cars sold between 2009-2015, enabling some VW, Audi, and Porsche models to release up to 40 times the allowable pollutants. This action, taken at the request of the Environmental Protection Agency, seeks injunctions prohibiting VW from marketing cars equipped to evade emissions requirements and compelling VW to take corrective action. In addition, the DOJ’s lawsuit seeks potentially enormous civil penalties. Nothing in this suit is likely to help individual owners recover damages.
There has also been a flurry of individual and class action lawsuits filed, and a search under “VW Diesel Problems” will reveal a number of ads by attorneys who are signing up clients who have been affected by the fraud through websites such as, carfraudsuit.com, vwrecallattorneys.com, and vw-scandal.com. In the meantime, Volkswagen has offered affected car owners a “goodwill package” worth $1000 to try and reestablish some sort of trust with their customers while they work to find a solution, but some have concerns hat taking that package might curtail the customer’s legal rights.
People who bought these diesels typically paid a premium of about 15% upon purchase, and they did so with the idea that they were getting a car that combined good performance, mileage, and environmental impact – all of which contributed to a strong resale value. When the fraud story broke last September, those owners saw the value of their cars drop about 13% in the first month. Fixes proposed by VW could affect their values even further if they permanently diminish the performance of the cars (more stringent emissions controls often mean less power). Because this is more of fraud case than a product liability or personal injury case, Burnett & Williams wouldn’t handle this for our clients. But just like in a personal injury case, we do think that compensation is due to the customers who have been harmed through no fault of their own, and they should be made ‘whole.’
The VW mess has so many moving parts, it is hard for a smart owner to figure out what to do. The Goodwill Package is available until April. It might make sense to wait and see if there are any changes to the language before deciding whether to accept. If you want to move sooner, you might take comfort in VW’s deposition testimony that “affected customers eligible for the Goodwill Package are not required to waive their rights or release their claims against VWGoA in order to receive the Package.” Despite that testimony, many attorneys recommend a wait-and-see approach on the Goodwill Package.
Meanwhile, numerous class action and individual lawsuits have been filed around the country. The DOJ intends to ask the federal court to transfer its case to the multi-district litigation already pending in federal court in San Francisco. Other attorneys are counseling their clients to resist having their cases pulled into a class action. The thinking of those attorneys is that class actions often confer societal benefits in the form of better behavior by errant manufacturers, but they sometimes provide only modest compensation to the members of the class. Each of these options – the Goodwill Package, class action, or individual lawsuit – has its advantages and disadvantages. Consulting an attorney willing to take on an individual claim outside of the class action is probably a good place to start. In the end, you might find that you are better off joining in on a class action where others are doing the heavy lifting, so to speak. Everyone’s case is unique. There is no single answer that fits everyone’s needs.
To top it all off, the United States Chamber of Commerce is backing legislation known as the “Fairness in Class Action Litigation Act” that many say will leave victims of the sort of corporate misbehavior alleged against VW without meaningful legal remedies. The bill might get a vote in the House of Representatives this week.
In the David v. Goliath world of corporate liability, the fun never ends.