VW Emissions Lawsuit Filed By Car Dealership

KOUDSI Inc., doing business as The Car Factory, has brought forth allegations in an emissions class action lawsuit against Volkswagen on behalf of all vehicle dealerships in California.

The plaintiff seeks to represent all dealerships who have invested money to sell 2009-2015 model year Volkswagens with diesel engines (VW models include Jettas, Beetles, Golfs and Passats) and 2009-2015 model year Audi diesel A3s.

According to the Volkswagen lawsuit, prior to the VW emissions scandal that went public on Sept. 18, 2015, The Car Factory agreed to sell a private party’s Audi A3 on consignment. The dealership paid to have the car detailed and prepared for sale by photographing the car and advertising it on the website. Altogether, The Car Factory spent considerable time and resources to sell the consignment vehicle.

VW Emissions Scandal

Last month, it was revealed that Volkswagen installed “Defeat Devices” in the cars to detect when the car was undergoing emission testing. These devices caused the VW vehicles to operate in a manner where they emitted less pollution during emission testing than with regular driving. Reports showed that under regular driving conditions, the cars emitted up to 40 times the amount of pollution legally permitted.

Since the VW emissions scandal was exposed, Volkswagen has been forced to recall about 480,000 vehicles to disable the defeat devices and to ensure that the diesel emissions systems are properly functioning and will need to bring the vehicles into compliance with emissions standards.

As a result, Volkswgen diesel vehicles that have the defeat devices are currently not merchantable, and dealers who sell these vehicles would be knowingly doing so against emissions standards.

KUODSI alleges, “Due to the publicity of VW’s wrongful conduct, there is simply no reasonable way for a CLASS MEMBER to sell a CLASS VEHICLE to the public.”

While VW has asked its franchised Volkswagen and Audi dealerships to stop the sale of the affected vehicles and will compensate those dealerships for financial losses.

However, the company has not offered to compensate other dealerships such as The Car Factory who are not franchises but who have also suffered losses due to this situation.

Volkswagen Class Action Lawsuit Allegations

KUODSI/The Car Factory has brought forth allegations that VW violated the California’s Business & Professions Code. According to the lawsuit, “Business & Professions Code § 17200 defines unfair competition including any ‘unlawful, unfair or fraudulent business act or practice’ and ‘unfair, deceptive, untrue or misleading advertising.’”

Had the dealership known about the illegal defect devices, they claim that they would not have invested money and resources into the sale of the affected vehicles. The company, on behalf of the class, claims they have suffered damages and will continue to do so, and requests restitution from Volkswagen.

KUODSI has asked the court for class certification, an order enjoining VW from further deceptive distribution, sale and lease of affected vehicles, compensatory, exemplary and statutory damages awarded to KUODSI and class members, and disgorgement of profits by VW in full restitution to KUODSI and the class.

The VW Emissions Dealership Class Action Lawsuit is Case No. 2:15-cv-07477, in the U.S. District Court for the Central District of California.

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!