James Bilsborrow, a Weitz & Luxenberg partner and practice group co-chair, is speaking at a virtual event titled “PFAS Litigation and Regulatory Developments Conference.” It…Read More
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Weitz & Luxenberg Stands Up for Victims of Consumer Fraud
Weitz & Luxenberg played a key role in the federal Volkswagen litigation, which involved both consumer protection and an adverse environmental impact. The federal judge appointed Robin Greenwald, head of the firm’s Environmental, Toxic Tort & Consumer Protection litigation unit, to the Plaintiffs’ Steering Committee (PSC) for the case. Ms. Greenwald served as the PSC’s primary attorney for coordinating matters with the federal agencies and the different states’ attorneys general. Our advocacy and leadership, in the end, helped pave the way for a nearly $15 billion settlement, hailed as the largest civil settlement in automaker history.
VW’s significant pollution of the atmosphere insured Weitz & Luxenberg’s early and vigorous involvement with the VW litigation. Just four days after the U.S. Environmental Protection Agency (EPA) announced Volkswagen had violated federal law and mislead the government and consumers, our law firm proudly took action for the victims, filing a consumer class action in federal court in the Eastern District of New York.
Weitz & Luxenberg brought the lawsuit on Sept. 22, 2015, on behalf of consumers who purchased or leased certain vehicles manufactured, distributed, and/or sold by Volkswagen and/or its related subsidiaries, successors, or affiliates with built-in software designed to conceal the vehicles’ actual emission of the dangerous pollutant nitrogen oxide (NOx).
The complaint alleged that Volkswagen misrepresented the environmental benefits of its Turbo Diesel Ignition (TDI) Clean Diesel engines in an effort to promote its vehicles. Volkswagen, through a national marketing campaign, misled the purchasers of these vehicles to believe its Clean Diesel technology substantially reduced NOx emissions when, in fact, the vehicles’ emissions during normal driving were in excess of emission standards established by federal law.
It further argued that consumers who bought affected Volkswagen cars paid more to own these diesel vehicles because of their alleged environmental benefits and performance.
The federal Judicial Panel on Multidistrict Litigation subsequently consolidated the various litigations before Judge Charles R. Breyer of the U.S. District Court for the Northern District of California. Judge Breyer, the younger brother of Associate Supreme Court Justice Stephen Breyer, selected the members of the PSC and directly charged them to work diligently on behalf of the class members. The subsequent results arose from Judge Breyer’s close oversight of the litigation and counsels’ commitment to meeting his directive.
VW’s ‘Attempts to Dodge Emissions Standards’
For over half a decade, Volkswagen sold certain vehicles as being “clean” diesel vehicles with low emissions. However, the vehicles emit up to 40 times the legal levels of NOx, which can cause emphysema, bronchitis, and other respiratory diseases.
The affected vehicles include some Volkswagen, Audi, and Porsche models that the company released from 2009 to 2016 in both 2.0 and 3.0 liter diesel engine sizes. The vehicles were designed to drive differently during required federal emissions tests, so they appeared compliant with air pollution emissions standards when in fact they were not.(1)
Former U.S. Attorney General Loretta E. Lynch called Volkswagen’s long-running scheme a “damaging conspiracy” and accused the German automaker of attempting to mislead consumers and deceive the government.
“Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection, and financial laws,”
“Volkswagen’s attempts to dodge emissions standards and import falsely certified vehicles into the country represent an egregious violation of our nation’s environmental, consumer protection, and financial laws,” Lynch said in a news release.(2)
Clean Air Act Certification Requirement
The Clean Air Act (CAA) is the federal law that regulates air emissions from both stationary and mobile sources, including motor vehicle engines.(3) The EPA is tasked with making sure every vehicle in the U.S. satisfies the emission standards set forth in the CAA.
The agency bars manufacturers from selling any new vehicle unless that vehicle is covered by an EPA-issued certificate of conformity that shows the vehicle meets the necessary emissions requirements. It also works to ensure no company manufactures, sells, or installs a part for a motor vehicle that bypasses, defeats, or renders inoperative any emission-control device. Such technology violates the CAA and is known as a “defeat device.”
The CAA, its prohibition of defeat devices, and the EPA’s certification program aim to protect human health and the environment, in part by limiting vehicles’ harmful emissions, including NOx.(4)
Health Effects of NOx Pollution
NOx is a serious health concern, according to the EPA. Such pollution contributes to the creation of harmful smog and soot. Exposure to smog or soot is linked to multiple respiratory and cardiovascular-related health problems, as well as premature death.
NOx emissions form nitrogen dioxide, which can intensify respiratory diseases such as asthma. Nitrogen dioxide may also contribute to the development of asthma in children.
Those at particular risk of health reactions connected to smog or soot exposure include:
- Older adults
- Anyone who is active or works outdoors
- Anyone with heart or lung disease(5)
Study Exposes VW’s Cheating
In 2013, the International Council on Clean Transportation, a nonprofit environmental group, commissioned West Virginia University’s Center for Alternative Fuels, Engines, and Emissions to conduct a study of diesel vehicles. The study was intended to show that carmakers were capable of meeting harsher limits on NOx emissions. Instead, it revealed Volkswagen had rigged the vehicles to mislead federal regulators.
Researchers used a mobile lab to test emissions from two Volkswagen models equipped with the 2.0 liter turbocharged 4-cylinder diesel engine. On-road testing showed Volkswagen diesel cars spewed far more toxic fumes on the road than during official emissions tests.
When the California Air Resources Board (CARB) learned of the university’s findings, the agency, along with federal regulators, began investigating Volkswagen. CARB tested a larger group of Volkswagen diesel vehicles and found that, contrary to the norm, the Volkswagen vehicles released more pollutants when the engines were warmed up than when they were cold. The agency eventually gathered enough evidence to force Volkswagen to confess that the vehicles contained defeat devices.(6)
Even during the investigations, Volkswagen broadcast a series of commercials to promote the environmental cleanliness and fuel efficiency of its diesel engine vehicles.
How Volkswagen’s ‘Defeat Device’ Worked
Defeat devices are often utilized to circumvent government requirements. VW’s defeat device disabled its vehicle’s emission controls and resulted in greater air pollution.(7)
Volkswagen utilized computer code that sensed when someone was testing the diesel vehicle for air emissions and engaged the car’s full emissions system, thereby reducing pollution emissions. During normal use, however, the software turns the equipment down, increasing pollution substantially above the legal level.
EPA Issues Notices of Violation to Volkswagen
According to the EPA, Volkswagen violated the Clean Air Act by selling vehicles in the U.S. that, during regular driving, emit levels of NOx that significantly exceed the EPA compliant levels.
On Sept. 18, 2015, the EPA issued a Notice of Violation of the Clean Air Act to Volkswagen that alleged the company installed software in its model year 2009-2015 2.0 liter diesel cars that sidestepped federal emissions standards. According to the EPA, these vehicles emit up to 40 times more pollution than emission standards permit.
Less than two months later, on November 2, 2015, the agency issued another Notice of Violation of the Clean Air Act to Volkswagen — this time for making and selling certain model 2014-2016 3.0 liter diesel cars and SUVs that have a defeat device. These vehicles emit up to nine times more pollution than emissions standards permit, according to the EPA.(8)
Volkswagen Admits Vehicles Contain Defeat Device
Volkswagen largely acknowledged that errors were made in respect to its 2.0 liter diesel vehicles. On November 19, 2015, Volkswagen officials admitted to the EPA that the defeat device was installed in all of its U.S. 3.0 liter diesel models since 2009.(9)
Worldwide, 11 million cars and light commercial vehicles under several Volkswagen brand names contain the same defeat device to mask actual diesel emissions, the company said. In the U.S., nearly 600,000 vehicles were equipped with the device.(10)
Michael Horn, stated: “Let’s be clear about this: Our company was dishonest with the EPA and the California Air Resources Board and with all of you.”
The Volkswagen Group of America CEO at the time, Michael Horn, stated: “Let’s be clear about this: Our company was dishonest with the EPA and the California Air Resources Board and with all of you.”(11)
Weitz & Luxenberg Files Class Action Lawsuit
Weitz & Luxenberg’s suit in the U.S. District Court for the Eastern District of New York permitted the firm to employ two areas of expertise, environmental and consumer protection law. Although a class action on behalf of all relevant owners of VW’s diesel vehicles, the firm’s complaint focused on the defendant’s fraudulent emphasis on the positive environmental aspects of the cars. The complaint noted one class representative who specifically purchased a 2011 Volkswagen Golf TDI from a Volkswagen dealership because Volkswagen advertised it as a fuel efficient and environmentally “clean” car. Likewise, another class representative bought a 2013 Volkswagen Beetle TDI from a Lexus dealership in an effort to protect the atmosphere.
The class representatives embodied the nationwide and statewide classes in the consumer class action filed by Weitz & Luxenberg in September 2015. The complaint alleged, in part, that class members were harmed and suffered actual damages because their vehicles “are unfit for their ordinary and intended use and cannot be operated in compliance with CAA emission standards.”
Similarly, in January 2016, the United States filed a lawsuit accusing Volkswagen of violating the Clean Air Act.(12) In March of that same year, the U.S. Federal Trade Commission filed a lawsuit against Volkswagen for false advertising, saying U.S. consumers suffered “billions of dollars in injury” because of the manufacturer’s claims that its diesel vehicles were environmentally friendly.(13) The State of California filed a lawsuit in June 2016 accusing Volkswagen of violating the California Health and Safety Code and California’s Unfair Competition Law.(14)
Greenwald Named to Plaintiffs’ Steering Committee
The Hon. Charles R. Breyer of the U.S. District Court for the Northern District of California named Greenwald to the Plaintiffs’ Steering Committee in the multidistrict federal court litigation against Volkswagen on Jan. 22, 2016.
Prior to joining Weitz & Luxenberg in 2005, Greenwald served as a senior attorney within the U.S. Department of Justice. She now heads the Weitz & Luxenberg Environmental, Toxic Tort & Consumer Protection litigation unit.
Greenwald began her career in law as an assistant U.S. Attorney for the Eastern District of New York. She later became assistant chief of the Environmental Crimes Section of the Department of Justice, in charge of Legislation, Policy and Special Litigation.
From there, Greenwald was appointed as General Counsel for the Inspector General of the U.S. Department of the Interior. She then served as executive director of an international not-for-profit water protection organization and as a clinical professor of law at Rutgers Law School.
The Volkswagen appointment was not Greenwald’s first. She previously served as plaintiffs’ liaison counsel in In Re: Methyl Tertiary Butyl Ether (MBTE) Products Liability Litigation (MDL 1358), and she was named a member of the Plaintiffs’ Steering Committee for the BP Oil Spill litigation (MDL 2179).
VW Agrees to $14.7 Billion Settlement
In June 2016, Volkswagen agreed to pay $14.7 billion to resolve allegations over about a half million of its 2.0 liter vehicles with model years 2009-2015. Under the deal, the manufacturer agreed to buy back, terminate leases for, or repair vehicles that had defeat devices installed in them.(15)
Volkswagen agreed to spend up to $10.03 billion to compensate consumers and $4.7 billion on environmental projects. The settlement took effect on October 25, 2016.(16)
Then, in December of that same year, Volkswagen entered into a second settlement. The company agreed it would recall about 80,000 3.0 liter diesel vehicles equipped with defeat devices and would pay $225 million on environmental projects designed to reduce emissions of nitrogen oxide.(17)
In a separate settlement, Robert Bosch GmbH agreed to pay $327.5 million over allegations that it played a role in developing the cheating technology. The German auto supplier provided the engine-control software to Volkswagen.(18)
Other Cases Against Volkswagen and Its Employees
Volkswagen agreed to plead guilty and pay $4.3 billion in criminal and civil penalties in January 2017.
The U.S. Department of Justice resolved a criminal case against Volkswagen for the offenses of conspiracy, obstruction of justice, and entry of goods by false statement. The U.S. Customs and Border Protection resolved civil fraud claims with the manufacturer resulting from the illegal importation of affected vehicles.(19)
Following through on that resolution, Volkswagen pleaded guilty in March 2017, to federal charges of conspiring to defraud the United States, commit wire fraud and violate the Clean Air Act, as well as obstruction of justice and importing merchandise by means of false statements. The plea agreement requires the company to pay a criminal penalty of $2.8 billion in addition to the $1.5 civil payment it agreed to in January.(20)
Also in January, a federal grand jury indicted six Volkswagen executives and employees for their roles in the conspiracy.(21) The company is the subject of separate criminal investigations by the attorneys general in 42 states, the District of Columbia, and Puerto Rico.(22)
What the VW Emissions Scandal Means for Consumers
Many people who purchased the affected Volkswagen diesel vehicles opted to pay more because the manufacturer touted the engines as cleaner and more fuel efficient than other vehicles.
Though diesel fuel is more expensive at the pump than conventional gasoline, consumers chose the diesel vehicles because they believed they would save money in the long run due to the better fuel efficiency. Plus, they thought they were aiding the environment.
In reality, however, the Volkswagen vehicles are likely worth a lot less than what consumers paid for them, and the vehicles are releasing levels of toxic fumes far above legal limits, causing damage to the environment and people’s health. Volkswagen misled consumers, and now consumers and the environment are paying the price.
Vehicles Affected by the VW Emissions Scandal
Affected 2.0-liter diesel vehicles include:
- Volkswagen Jetta TDI (2009-15)
- Volkswagen Jetta SportWagen TDI (2009-14)
- Volkswagen Beetle TDI (2012-15)
- Volkswagen Beetle Convertible TDI (2012-15)
- Audi A3 TDI (2010-15)
- Volkswagen Golf TDI (2010-15)
- Volkswagen Golf SportWagen TDI (2015)
- Volkswagen Passat TDI (2012-15)
Affected 3.0-liter diesel vehicles include:
- Volkswagen Touareg (2009-16)
- Audi Q7 (2009-15)
- Audi A6 (2014-16)
- Audi A7 (2014-16)
- Audi A8 (2014-16)
- Audi Q5 (2014-16)(23)
Owners of the impacted vehicles do face applicable deadlines for receiving payment under VW’s settlement agreement.
To consult a Weitz & Luxenberg attorney today, call or fill out an online form. Our legal consultations are free of charge.