Volkswagen Supports MDL for TDI “Clean Diesel” Lawsuits Over Emissions Fraud

With the U.S. Judicial Panel on Multidistrict Litigation (JPML) scheduled to hear oral arguments on December 3, over whether to consolidate all federal Volkswagen TDI “Clean Diesel” lawsuits, the automaker has indicated that they support the request to centralize the cases before one judge as part of an MDL, or multidistrict litigation.

Following recent discovery of a Volkswagen emissions fraud impacting hundreds of thousands of TDI diesel vehicles sold throughout the United States, a growing number of complaints have been filed in U.S. District Courts throughout the country on behalf of owners of the vehicles.

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.

Each of the complaints raise similar allegations, claiming that the German 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 late September, a group of plaintiffs filed a request to centralize the litigation over the Volkswagen TDI “Clean Diesel” emissions fraud, asking that cases be centralized before one judge for coordinated pretrial discovery to reduce the risk of duplicative discovery into common issues, avoid conflicting rulings from different Courts and to serve the convenience of the parties, witnesses and the judicial system.

In a response (PDF) filed October 20, Volkswagen indicates that it supports centralizing the cases as part of an MDL in the U.S. District Court for the Eastern District of Virginia. However, a number of competing venues have been proposed by different plaintiffs involved in the litigation.

According to a hearing order (PDF) issued last week, the U.S. JPML has scheduled oral arguments on the motion for a hearing set for December 3, a the Hale Boggs Federal Building in New Orleans, Louisiana.

VW Diesel Emissions Software Cheat

The Volkswagen TDI diesel recall affected a number of Jetta, Golf, Beetle, Passat and Audi A3 vehicles equipped with TDI diesel engines since 2009. It also sparked the company’s biggest crisis since its inception.

Nearly 500,000 vehicles in the U.S. were recalled, but estimates on the worldwide number of Volkswagen diesel vehicles with the emissions cheating software ranges from 8 million to 11 million.

On September 18, the U.S. Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act against Volkswagen and Audi, claiming that certain vehicle equipped with four-cylinder diesel engines had “defeat devices,” which involve software that detects when the vehicle was being tested for emissions. This placed the vehicles into a “clean emissions” mode to successfully pass the tests, but once the test was over, the vehicle began polluting again, at rates as high as 40 times that allowed by the EPA.

During this time, VW promoted the vehicles as “clean diesel” hybrids that were better for the environment and which got better gas mileage. However, when the accusations came to light, VW officials admitted to the problem.

The EPA says the company could face up to $18 billion in fines, and it’s CEO and a number of other key company employees have stepped down or been fired as a result.

Volkswagen and the EPA say they are investigating whether even more vehicles may be affected, and the EPA is also looking at other companies to see if similar technology is in use elsewhere.