VW Dealership Diesel Scandal Class Action Lawsuit Gets Dismissed

A Volkswagen class action lawsuit focusing on the impact of the diesel emissions scandal on dealerships was recently dismissed due to pleading deficiencies identified by the judge.

U.S. District Judge Charles R. Breyer dismissed the complaint in a Jan. 3 ruling that sided with Volkswagen.

Volkswagen reportedly argued that all of the claims against them should be dismissed based on a previous class action settlement with authorized franchise dealerships.

Judge Breyer denied this reasoning after finding that the salespersons’ claims were not released as a part of this settlement.

However, Judge Breyer did dismiss the claims based on other deficiencies.

The breach of contract claim was dismissed by the court after Judge Breyer found that the plaintiffs did not reference any agreements between themselves and Volkswagen.

According to the VW class action dismissal order, this means that the plaintiffs’ claims do not satisfy the four elements of breach of contract claims: the existence of a contract; plaintiff’s performance or excuse for nonperformance under the contract; defendant’s breach; and subsequent damages to plaintiffs.

“With no allegations supporting the existence of a contract, a necessary element of the claim is missing,” Judge Breyer wrote.

Judge Breyer also found that the plaintiffs did not have standing to bring claims of negligent interference with prospective economic advantage. In order to successfully bring this claim, plaintiffs reportedly needed to show that Volkswagen interfered with relationships that the plaintiffs would have benefited from.

The court agreed with VW that the plaintiffs did not satisfy the requirements of these claims.

“Because the complaint does not identify with particularity the relationships that Defendants interfered with, Plaintiffs’ negligent interference claim is inadequately pled,” the VW dismissal motion determined.

Judge Breyer also dismissed the plaintiffs’ fraud claims and RICO claims, finding that they “fall short” of the rule requirements to successfully continue.

Luckily, plaintiffs were given leave to amend the dismissed claims, meaning that they have the chance to try again with a new complaint.

Plaintiffs in the VW class action lawsuits alleged that their work as VW salespeople was disrupted after the company was embroiled in several emissions scandals.

The plaintiffs claimed that they suffered from financial losses as a result of the scandal and subsequently lower demand for VW vehicles. Because bonuses are based on successful sales, the loss of sales allegedly directly resulted in less compensation for the plaintiffs.

The emissions scandals surrounding Volkswagen claimed that the company tweaked the diesel engine vehicles’ software to help the cars pass emissions testing. When the testing was over, the systems would reportedly return to normal and emit up to 40 times more toxins into the environment than what was seen during testing.

Claims against Volkswagen were eventually consolidated into a multidistrict litigated centralized in the Northern District of California.

Did you suffer as a sales associate due to the recent Volkswagen scandals? Share your experiences in the comment section below.

The Volkswagen Diesel Scandal Class Action Lawsuit is In re: Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation, Case No. 3:16-cv-07214-CRB, in the U.S. District Court for the Northern District of California.

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