Hundreds of Fraud Claims Already Filed Against Volkswagen

Hundreds of lawsuits have already been filed in courts around the country against Volkswagen, the world’s largest automaker, for what many lawyers consider to be the largest corporate fraud in history.

What do we know so far?  “Clean Diesel” was a marketing scam rigged to capitalize on a computer programming software known as a “defeat device” that altered the emissions data these cars actually produced on the road in real-world conditions, as opposed to in the laboratories.

The fraud was discovered by accident when a West Virginia University scientist tested some Volkswagen cars and found that the emissions were out of compliance because of software manipulation.  At first VW denied this, claiming that WVU’s tests were flawed.

The actual emissions numbers violated the Clean Air Act.  Millions of consumers had purchased VW diesel vehicles they believed to be “green,” or a least greener than traditional gasoline engines.  The Clean Air Act specifically prohibits any manufacturer from installing any device that lowers the actual emissions of a vehicle being tested by the EPA–as compared to what the vehicle actually creates when being driven on the road.

Before any vehicle can be sold in the United States, it must meet strict governmental standards and be certified by the EPA.  Diesel engines use a different mix of fuel than gasoline engines.  If a diesel engine does not get enough oxygen to combust the fuel, it will emit various pollutants, such as nitrogen oxide.  Ironically, higher mpg diesels were found to produce the most pollutants.

One reason that VW may have been motivated to rig the data would be greed, in terms of the tax incentives that the United States gave it for selling what were purported to be fuel efficient vehicles.  Specifically, VW received $51.5 million in federal fuel efficiency tax credits and an additional $150 million in Advanced Manufacturing Tax Credits.

At long last, VW and their CEOs have admitted to violating the trust of their customers and the public, and they have sent a letter of apology to each of their customers.  VW is trying to convince both Congress and those who are suing them that the manipulated data resulted from the bad acts of just a few rogue engineers.  Few believe this is true.

The investigation has spread across Europe and India, and many foresee that this may be the beginning of the end of VW as it is known today.  It appears that there are other manufacturers who are also out of compliance, including Mitsubishi and Mercedes Benz.

Consumer Reports recently published the results of its own testing, which showed that the fuel economy dropped from 50 to 46 mpg, and the 0-60 acceleration test took 0.6 seconds.  Senator Chuck Schumer is urging the EPA to levy a huge fine against VW that could total more than the Department of Justice levy of $18 billion, which amounts to approximately $37,500 per offending car.

MAKING YOUR CLAIM AGAINST VW

Of the 250 lawsuits already filed, most are based on a host of federal claims, ranging from false advertising and warranty violations, to a variety of state causes of action, like false advertising, breach of contract, breach of implied warranty, fraud in the inducement, consumer fraud, and unjust enrichment–causes which may lead to the inclusion of the dealerships as potential defendants.

Florida may be one of the best venues for victims to sue VW, regardless of where they may live or have purchased their car.  For instance, Florida has a powerful and unique statute called the Deceptive and Unfair Trade Practices Act; it provides a viable cause of action for victims, along with available punitive damages.

VW is already facing other lawsuits, as well. For example, municipal plaintiffs–like the County Attorney of Harris County in Houston, Texas–are also filing suits against VW for violating local ordinances.

In addition, there most likely will be personal injury cases.  Diesel engines have been linked in the past to an increase in certain medical conditions, including cancer. I imagine it won’t be long before someone will sue VW, alleging that the diesel vehicle thought to be a “clean car” caused the buyer to contract cancer because the amount of pollutants was 35 times the amount that was fraudulently reported by VW.

It is important to remember that the affected vehicles are not going to be considered total losses. For example, if “the fix,” as some suggest, is a simple software upload (akin to an Apple application update or a retrofit to the emissions software), these cars will definitely be back on the road somewhere–if not in the United States, then in a secondary market, but with less performance and most likely less fun for the driver.

VW has been sued a number of times over the last few years, resulting in millions of dollars of payments to consumers, with compensation for everything from defective Bluetooth devices and faulty wiring harnesses to leaking sunroofs.   Each previous case began with VW’s asserting strong defenses based on technical issues, such as whether or not VW America could be sued on behalf of VWAG, the parent company.  Those previous suits ended up ultimately settling.

RECALLS OF VOLKSWAGEN VEHICLES

VW has already issued a recall in Germany of 2.4 million vehicles, and an additional 8.5 million of its diesel cars throughout Europe.  A plan for United States VW owners is being formulated, but most agree it will take years before each vehicle can be brought in for either a retrofit or replacement.  If VW chooses simply to repurchase the cars from the owners, the company could potentially turn right around and resell them somewhere else–most likely for a profit.

Another option for VW may be simply to buy all the cars back and in light of the potentially huge cost of verdicts, legal fees, and costs–or simply to write a check for $50 billion or so, putting it all in a fund to be meted out like the BP Oil Spill reparation.

As of today, there is no firm plan in place, but I imagine they will announce something within the next 30-90 days.  One thing that will absolutely have to change is more stringent testing of all cars and trucks sold in the United States, by the EPA–which, in my opinion as a lawyer who sues Volkswagen, should shoulder some of the responsibility for this debacle.

I HAVE A VW TDI–WHAT SHOULD I DO?

It is too early to tell whether or not this will result in an enormous class action or just individual claims on behalf of the owners.  Much will depend on how similar each claim is in terms of damages and what the potential fixes will be. At this point it is just too early to tell.

If you own a VW, you have valuable legal rights that need to be protected.  For nearly 25 years we have fought hard on behalf of consumers.  We can help you. Contact us today for a free initial consultation at 1-866-597-4529, or email us at INSERT.

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