Report: Volkswagen Diesel Emissions Settlements May Come Quickly

Despite the huge dollar amounts at stake in the litigation over the Volkswagen diesel emissions scandal, settlements may come quickly due to the lack of much to argue over.

Volkswagen has for all practical purposes admitted liability for deceptively building and selling cars designed to trick emission testing equipment, Automative News reported.

The final VW clean diesel class action settlement amount could depend on whether Volkswagen has to pay only for the premium it charged for what was supposed to be a lower-emissions vehicle — an estimated value of $1,000 to $7,000 per vehicle — or whether the company will have to buy back the cars entirely.

Some projections of a final settlement amount range from $1.5 billion to $8.9 billion. Volkswagen is reportedly seeking 20 billion euros in bridge financing to cover the cost of the scandal.

The VW scandal began in September 2015 when it was revealed that Volkswagen had installed software in certain diesel engines that was purposely programmed to trick emission testing equipment – a so-called “defeat device.”

During everyday driving, the defeat devices allow these engines to emit several times the allowable levels of certain diesel emissions. It’s estimated this defeat device was installed in as many as 567,000 vehicles sold in the U.S.

Today there are over 490 Volkswagen emissions lawsuits pending. In addition to that private civil litigation, there will likely be criminal and regulatory penalties the company will have to pay.

The Volkswagen MDL

Most recently, the federal Judicial Panel on Multidistrict Litigation ordered the creation of a multidistrict litigation to consolidate Volkswagen lawsuits within the federal court system. These claims will be transferred to a federal court in San Francisco to be overseen by Senior U.S. District Judge Charles Breyer.

The multidistrict litigation, or MDL, will allow coordination of pretrial procedures in all these Volkswagen lawsuits so that they proceed more efficiently and decisions are made more consistently.

Volkswagen had sought to transfer the cases to either Detroit or Virginia. But the panel explained its choice of California as the venue for the MDL by noting that California has the most affected vehicles and dealers. They also noted that almost one-fifth of the existing Volkswagen lawsuits are already in California courts.

In addition to the owners of the affected vehicles, the plaintiffs in these Volkswagen lawsuits also include Volkswagen dealerships and former customers who leased vehicles with the defeat device.

The plaintiffs’ allegations are based on theories of fraud, false advertising, breach of warranty, and deceptive trade practices. The apparently purposeful nature of Volkswagen’s actions could also lead to much larger damage awards under certain consumer protection laws that provide for punitive damages in cases of fraud or deceptive trade practices.

For affected VW owners in the U.S., Volkswagen has already made a goodwill offer of $1,000 in dealer credits and debit cards, plus three years’ worth of free roadside assistance. The offer is supposedly made with no strings attached, but plaintiffs’ attorneys are urging their clients not to accept the offer just yet.

UPDATE: On June 28, 2016, Volkswagen reached proposed settlements with both the U.S. Department of Justice and the U.S. Federal Trade Commission following the VW emissions scandal. VW’s deal with the DOJ includes up to $14.7 billion along with vehicle buyback provisions as well as funding for pollution control programs. In addition to the DOJ settlement, Volkswagen will also spend up to $10 billion in a buyback and lease termination settlement with the FTC that is expected to include about 475,000 vehicles.

UPDATE 2: The Volkswagen, Audi diesel emissions class action settlement is now open! Click here to file a claim!