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Volkswagen Settles Lawsuit Over Emissions Scandal

In 2008, Volkswagen began installing illegal engine control software in several of its Volkswagen and Audi models. The software recognized when the car was being tested for emissions, and increased the engine's emission controls in order to pass the inspection. However, during normal driving conditions, the software would shut down the vehicle's emission controls, resulting in the cars releasing 40 times as many pollutants, thus violating the Clean Air Act.

The U.S. Environmental Protection Agency ("EPA") charged Volkswagen with these violations in September of 2015, rousing a backlash among owners of the approximately 482,000 affected cars. Volkswagen admitted to its wrongdoing and began working on a remedy. A tentative deal was announced in June 2016 and was approved by U.S. District Judge Charles Breyer in late October.

The settlement amounts to $14.7 billion and will go toward three objectives: (1) Volkswagen has reserved $10 billion for buying back or repairing the affected cars, but only those with 2.0 liter engines; (2) $2 billion will be spent on projects to develop and promote zero-emission vehicles; (3) and $2.7 billion will be spent undoing the environmental damage caused by the engine control software. Owners of the affected cars will have the option to sell back their cars to Volkswagen or have their cars modified at no cost. Drivers who incurred losses because of the software will also be eligible for payments ranging from $5,100 to $10,000.

Volkwagen's settlement is the largest civil settlement by an auto manufacturer in history, which only covers a fraction of the cars installed with the illegal software. Owners of cars with 3.0 liter engines were not covered under this settlement and millions of other affected cars were sold globally, but there has been no legal remedy for those owners.

The legal team at SFMS has significant experience litigating class action matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier (nlussier@sfmslaw.com) or Chiharu Sekino (csekino@sfmslaw.com). We can also be reached toll-free at (866) 540-5505.

Shepherd, Finkelman, Miller & Shah, LLP is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS is an active member of Integrated Advisory Group (www.iaginternational.org), which provides us with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.

Field, Emily. "Volkswagen's $14.7B Emissions Deal Approved By Judge." Law360. Portfolio Media, Inc. 25 Oct. 2016. Web.

Linkov, Jon. "VW, Audi Cited by EPA for Cheating on Diesel Emissions Tests." Consumer Reports. Consumers Union. 30 Sept. 2015. Web.

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