In a hearing held in San Francisco on January 20, 2016, the federal judge assigned to preside over the civil litigation against Volkswagen arising out of their diesel engine emission scandal made clear to VW his position on reaching a speedy yet equitable resolution to the host of consumer lawsuits it now faces.
According to Jason J. Thompson, an attorney with Sommers Schwartz, P.C., who represents more than 20 VW vehicle owners, Judge Charles R. Breyer of the United States District Court for the Northern District of California “didn’t mince words when he told VW that his approach to the litigation was being driven by a sense of ‘immediacy.’” Mr. Thompson was also present at the hearing on behalf of the larger group of Michigan lawyers working with his law firm.
The multitude of lawsuits against the German automaker is the result of revelations and subsequent admissions that Volkswagen installed sophisticated software in various diesel vehicles to thwart strict U.S. Environmental Protection Agency (EPA) emissions standards.
Some 11 million vehicles worldwide were allegedly rigged to skirt important EPA standards in a way that is arguably contrary to VW’s advertising claims of “clean diesel” cars. In the U.S., VW has sold more than 482,000 cars with a four-cylinder turbocharged direct-injection engine, including versions of the Passat, Jetta, Golf, Beetle, and Audi A3. The lawsuits accuse VW of fraudulent concealment, breach of contract, breach of warranty, and statutory violations associated with its manipulation of the diesel engines and software. Owners of the affected cars are now seeking compensation for the company’s alleged fraud.
Mr. Thompson reported that Judge Breyer began the hearing by asking VW for an update on specifically how and when the company plans to correct the pollution emitted by the affected vehicles and financial injury to consumers and dealers. Mr. Thompson and others close to the case believe a settlement is inevitable.
In response to Judge Breyer’s questioning, lawyers for VW advised that company officials are in ongoing discussions with authorities, including the EPA and the California Air Resources Board, and that its engineers are “working around the clock” to identify a “fix” to the emissions issue. While no date for a solution was given, VW believes it will happen in a matter of months.
VW also outlined what it foresees as the structure for such an arrangement. Mr. Thompson explained, “VW is going to install the fix into newer vehicles and pay those owners compensation for their trouble. As for older cars that may not have as much life left, VW envisions a buy-back program.”
Mr. Thompson feels that Judge Breyer seemed to accept VW’s approach, but the judge advised VW’s lawyers that he was only going to allow them a few months to come up with a remedy and define the terms of their proposed settlement program. He also ordered them to provide more exact information on their timetable and financial details to Settlement Master Robert Mueller.
Mr. Thompson said the rest of the hearing was consumed by the process of appointing Lead Counsel for the consumers. “Several weeks ago, Judge Breyer invited any lawyers currently representing clients to file an application to serve as Lead Counsel or on the Plaintiff Steering Committee (PSC). Those attorneys will be appointed by the court and have the authority to negotiate with VW’s counsel and otherwise prosecute the case. Aside from overall qualifications and experience, Judge Breyer is looking to include lawyers from a geographically diverse cross-section of America, with some emphasis on states where many VW cars were sold.”
Mr. Thompson has applied to serve on the consumer PSC, and while no decision has been made as of yet, it is expected within the next few weeks.