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Volkswagen and Audi Dealerships Lawsuit
By Jane Mundy
In the wake of the Volkswagen emissions test debacle and VW recall lawsuit s, independent dealers have filed VW lawsuits against the automaker. Volkswagen AG has admitted to evading clear air standards on 500,000 diesel VWs and Audis. Volkswagen advertised its Diesel cars with Type EA 189 engines, which are equipped with the fraudulent defeat device, as environmentally friendly.
VW and independent dealerships are now stuck with millions of dollars of inventory they can't legally sell—model years 2009 to 2015 that were installed with a "defeat device"in its vehicles to trick EPA emissions tests. VW has admitted that this special software was installed in "diesel light duty vehicles"to show lower emissions during testing. The defeat device works by stifling emissions when the steering wheel stays stationary—as it would in a laboratory testing situation. When the vehicles were road-tested they showed nitrogen oxide (NOx) emissions up to 40 times the federal legal limit.
VW and Audi Dealer Losses
Volkswagen has voluntarily ordered its dealers not to sell any more of these cars. Attorney Robert Hilliard points out that every VW driver is now in violation of a federal law. Consumers were tricked into thinking they were buying environmentally friendly Volkswagens and Audis, when in reality they will have decreased gas mileage and performance and will significantly pollute the environment when the equipment is turned on.
According to attorney Michael Kelly of Kirtland & Packard LLP, "Whatever the fix is, there will be a loss of value, there will be degraded performance, the cars will have less efficient gas mileage and they will still be polluting the environment."
Consumers have not been the only ones affected—or tricked—by the VW emissions fraud; VW dealers were tricked into selling the VWs and Audis.
In California, a class action lawsuit has been filed by attorney Robert Starr on behalf of independent car dealers in the state and seeks damages likely to exceed $1 million. The car dealerships claim they will suffer losses due to Volkswagen AG fitting some of its VW and Audi models with the "defeat devices."Starr told LawyersandSettlements that his clients are now unable to sell diesel Volkswagens knowing that the vehicles violate EPA standards.
Volkswagen and Audi Dealer Lawsuit
VW lawsuits have been filed nationwide. In New Jersey, attorney Eric Chase, with Bressler, Amery & Ross, believes his clients will be involved in "some kind of legal action."Chase, who has represented dealerships in disputes with factories for decades, says at least one class action has been filed on behalf of VW dealers in Alabama. Chase points out that dealers are also customers of Volkswagen. "The [VW dealership] purchased vehicles at a wholesale price for the retail market. They bought a lot of merchandise that was illegal because they were fitted with a software device that was intended to disguise the emission levels,"he told LawyersandSettlements.
More than 175 class actions in 32 states have been filed over the emissions scandal that erupted last month, according to the National Law Journal (October 1, 2015). Although most lawsuits have been brought on behalf of customers, a number of suits have been brought by VW dealers. And many more lawsuits are expected. Most all VW lawsuits and a few subsidiary Audi AG lawsuits have been filed in the Eastern District of Virginia, where Volkswagen' U.S. headquarters is based in Herndon.
VW could face up to $18 billion in fines from the US alone after admitting to installing the defeat devices.
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