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A panel of federal judges has determined that all lawsuits over Volkswagen and Audi “Clean Diesel” engines, which contain software designed to cheat on EPA emissions tests, should be centralized before one judge for coordinated pretrial proceedings.
There are currently more than 500 “Clean Diesel” lawsuits against Volkswagen pending in about 60 different U.S. District Courts nationwide, each involving similar claims on behalf of the estimated 500,000 owners of recalled vehicles with TDI engines, claiming that the auto maker committed fraud by advertising its vehicles as environmentally friendly, and charging a premium for the vehicles that were marketed as environmentally friendly. Owners of recalled VW and Audi diesel vehicles also seek damages caused by the recent drop in resale value of their cars.
In a transfer order (PDF) on December 8, the U.S. Judicial Panel on Multidistrict Litigation (JPML) determined that sufficiently common questions of fact and law exist to justify centralizing the cases before U.S. District Judge Charles R. Breyer in the Northern District of California.
Establishing a federal Volkswagen diesel engine MDL (Multidistrict Litigation) is designed to reduce duplicative discovery efforts into common questions raised in the complaints, avoid contradictory pretrial rulings from different judges and to serve the convenience of the witnesses, parties and the judicial system.
The litigation has emerged since the EPA forced Volkswagen to recall TDI diesel vehicles that contained a software program known as a “defeat device,” which was designed to detect when the vehicle was undergoing emissions testing and artificially reduce the levels of pollution emitted. However, after the testing was over, the vehicles marketed as “Clean Diesel” released up to 40 times the amount of nitrogen oxide and other air pollutants allowed by U.S. law.
In late September, a group of plaintiffs filed a request to centralize the litigation over the Volkswagen TDI “Clean Diesel” emissions fraud. The German auto maker agreed that the cases should be consolidated, but various different venues were proposed as the most appropriate for the MDL.
Following oral arguments presented last week, JPML agreed that the cases should be consolidated due to the complexity of the recall and the worldwide impact of the Volkswagen emissions scandal.
“The litigation is international in scope,” the JPML said in its transfer order. “The vehicles addressed by the Notice of Violation are only a fraction of the estimated 11 million affected vehicles worldwide. Potentially relevant witnesses and evidence from VW and other entities involved in the design, production, sale and marketing of the affected vehicles and the components at issue likely are located outside of the United States. Indeed, much of the underlying conduct at the center of plaintiffs’ claims likely occurred in Germany.”
The panel said the controversy impacts multiple districts across the United States, but said it was clear that California was the best location to consolidate the claims.
“California is the State with the most affected vehicles and dealers, where significant testing of affected vehicles occurred, and the home of the California Air Resources Board, which played an important initial role in investigating and, ultimately, revealing VW’s use of the defeat devices.”
Volkswagen TDI Emissions Software Scandal
The Volkswagen emissions scandal began on September 18, when the U.S. Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act against Volkswagen and Audi, after it was discovered that smaller Volkswagen and Audi “Clean Diesel” vehicles sold in recent years had emissions-cheating software installed. This resulted in a recall for VW Beetle, VW Golf, VW Jetta, VW Passat and Audi A3 vehicles sold in various model years between 2009 and 2015. .
A little more than a month later, the list of affected TDI diesel vehicles was expanded to include the 2014 VW Touareg, the 2015 Porsche Cayenne, and the 2016 Audi A6 Quatro, A8, A8L, and Q5. However, VW has denied the EPA’s claims that those vehicles are affected. The recalls affected nearly 500,000 vehicles sold in the United States.
Volkswagen marketed the vehicles as “clean diesel”, which were promoted as being better for the environment and providing better gas mileage. However, the statements appear to be part of a major fraud on consumers who were trying to be more environmentally friendly.
The EPA has said that Volkswagen could face as much as $18 billion in fines for violating Clean Air Act emissions testing laws.