Volkswagen has proved that there is such a thing as bad publicity. The company’s fortunes have gone steadily downhill since the Environmental Protection Agency’s announcement that German automaker Volkswagen had installed emission-defeating software in its diesel cars sold in the U.S. in order to pass the EPA’s pollution testing. Since that announcement, VW has admitted that it installed the software in 11 million automobiles. The software sensed when the car was being tested, then activated equipment that reduced emissions to acceptable levels. During regular driving, the software would turn off the emissions equipment.
Most of the affected vehicles are probably in Europe, where Volkswagen has a huge market presence, accounting for about 25% of all cars sold. The lawsuits have piled up very quickly, including one filed by the Seattle-based Hagens Berman law firm. That lawsuit seeks class action status. Hagens Berman lawyer Thomas Loeser is involved in the litigation and explains the issues involved in this report.
Loeser says that his firm has been inundated with request by VW owners who want to file suit. He explains that Hagens Berman is set up to handle events like this, having been involved in major class action litigation over the years, including a role as one of the lead counsels in the tobacco class action litigation going back twenty years. When something like this occurs, the firm is able to deploy a team of lawyers, paralegals, and investigators to get the facts on what a potential defendant did wrong to communicate with people who are interested in being plaintiffs.
Loeser says the firm has never had a case where the response was “as profound and as quick as it was in this case.” Part of the reason is that the people who bought the VW diesels were enthusiasts, championing both the environmental friendliness and the efficiency of these cars. They feel defrauded by what has happened. “These are angry people.” And they want to be seen to be suing Volkswagen. Several hundred people have requested that they be named the class representative in the class action.
In this case, Loeser says, VW may have criminal problems as well as a host of civil lawsuits. (Loeser explains that he was a federal prosecutor before he became a plaintiff’s lawyer.) One obvious violation is the federal Clean Air Act. Under that law, VW could be fined $37,000 per device. When applied to the 480,000 cars VW sold in the U.S., the amount could be very large. In addition, VW could face (as GM did) a charge of wire or mail fraud because they used interstate communications facilities in defrauding the EPA. The government could bring criminal charges against the company and individuals within the company. Attorney General Loretta Lynch has said that she will no longer let individuals off easy to get a corporate guilty plea. VW CEO Martin Winterkorn has resigned his post.
Thomas E. Loeser is a partner in Hagens Berman Sobol Shapiro LLP in the firm's Seattle office. His practice focuses on class actions, False Claims Act and other whistleblower cases, consumer protection and data breach/identity-theft/privacy cases. He has successfully litigated class-action lawsuits against mortgage lenders, appraisal management companies, national banks, home builders, hospitals, medical imaging companies, title insurers, technology companies and data processors. The Legal Broadcast Network is a featured network of Sequence Media Group.