VW Dealerships File Consumer Fraud Class Action

Santa Clara, CAVolkwagen AG (VW) is facing yet another class action over the alleged Volkwagen defeat device false emissions ratings, or so-called “Dieselgate”. The latest proposed class action was filed by a VW dealership in Chicago. To date over 500 class actions have been filed against the German automaker.

The lawsuit was filed on behalf of a class of nationwide Volkswagen franchise dealerships, alleging the emissions scandal has caused great harm to franchise dealers, who, in some cases, have seen their profits erased and their dealerships plummet in value.

The issue revolves around VW’s use of a “defeat device” installed in some 600,000 vehicles in the US, which were allegedly designed to cheat emissions detection tests. According to the US Environmental Protection Agency, vehicles fitted with defeat devices emit as much as 40 times the standard for nitrogen oxides.

While Volkswagen has stated its commitment to fixing the problem, not all of Volkswagen’s 600 franchise dealers are prepared to wait indefinitely for the company to either come up with a fix or reimburse them.

According to the suit, filed by the three franchise dealerships owned by Ed Napleton, Volkswagen has put some dealers ahead of others, such as “unfair and illegal pricing” favoring dealers that used an affiliated financing company, VW Credit Inc. Napleton cited his purchase of a VW franchise in Urbana, Illinois, that Volkswagen pushed last year despite knowing of the emissions problem since 2014.

The lawsuit makes claims under the federal Automobile Dealers’ Day in Court Act and the US Racketeer Influenced and Corrupt Organizations Act, alleging that Volkswagen and Robert Bosch GmbH, which supplied the defeat device, conspired to commit fraud.

Meanwhile, the consumer-based defeat device class actions have been coordinated into Multidistrict litigation (MDL) in San Francisco before US District Judge Charles Breyer. Volkswagen and federal regulators have been given until April 21 to come up with a plan to fix the cars.