Volkswagen “Clean Diesel” Lawsuit Centralization Sought in New Jersey State Court

As a growing number of Volkswagen “clean diesel” lawsuits continue to be filed in the New Jersey state court system by owners of recalled vehicles sold with software designed to cheat on emissions testing, a request has been filed to centralize the cases before one judge for coordinated handling.

A petition (PDF) was filed with the New Jersey Supreme Court earlier this month, asking to transfer at least a dozen different complaints filed throughout the state to one judge for pretrial proceedings to coordinate discovery, avoid contradictory rulings from different courts and to serve the convenience of the parties, witnesses and the state court system.

The “clean diesel” lawsuits stem from a Volkswagen recall issued last year for VW and Audi TDI vehicles, which were promoted as environmentally friendly and “green” vehicles. However, it has been discovered that vehicles with the diesel engines had software designed to cheat on federal air quality emissions testing.

Known as a “defeat device”, the software artificially lowers emissions while the vehicle is undergoing EPA testing, but during normal operations they release exceedingly high levels of pollutants.

In addition to the New Jersey state court cases, Volkswagen faces hundreds of similar claims pending in the federal court system, which have been consolidated before one judge in the Northern District of California, as part of an MDL, or multi-district litigation.

“There is no doubt that the New Jersey ‘Clean Diesel’ actions involve common questions of law and fact that are associated with a single device applicable to various vehicles,” the petition filed with the Administrative Director of the New Jersey Courts states. “The state court cases in New Jersey share the same characteristics. Although the causes of action pled vary to some degree, the facts underlying all of the lawsuits are fundamentally the same.”

Volkswagen Emissions Fix

Volkswagen has already admitted that it broke the law, and has set aside $7 billion to deal with the emissions scandal so far. However, there remains substantial litigation to establish what amount of damages vehicle owners may be entitled to receive, and whether the auto maker should be required to buy back the recalled vehicles.

In January, a plan proposed by Volkswagen to fix the vehicles with a software update and new catalytic converters was rejected by California officials and the U.S. Environmental Protection Agency. California officials said that in rejecting the Volkswagen plan it was letting the company know that there was no cheap, easy, quick fix to the problem in the company’s future.

Last week, the judge presiding over the federal litigation ordered Volkswagen to develop a fix for the vehicles by March 24, saying that the company had long enough since September to address the problem.

A Volkswagen environmental lawsuit filed by the Justice Department has been brought on behalf of the EPA, seeking injunctive relief and the assessment of civil penalties. The case does not preclude additional criminal charges. The claim involves 499,000 2.0 liter diesel vehicles and 85,000 3.0 diesel vehicles sold in the U.S. since the 2009 model year. The company could be fined as much as $37,500 per vehicle for four violations of law each, meaning the company could face charges of $90 billion.

In December, Volkswagen announced it has hired attorney Kenneth Feinberg to design an independent settlement program for diesel vehicle owners. Feinberg has worked on a number of high profile settlements in recent years for corporations that found themselves facing massive legal costs from lawsuits, including both the General Motors ignition recall settlement fund as well as settlements by BP Deep Horizon oil spill settlement program.