Lawyers for Virginia VW Buyers Seek to Depose Class Representatives on Fairness of Class Settlement

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Concerned with the fairness of the proposed class action settlement, attorneys from Howarth & Smith have filed a motion to depose the Virginia representatives in the ongoing consumer class action lawsuit over Volkswagen’s “dirty diesel” scandal.

On August 24, 2016, Suzelle Smith of Howarth & Smith and Virginia counsel, James Feinman, filed a Motion on behalf of Virginia VW owner, Ronald Fleshman, Jr., seeking leave of Court to take the depositions of those individuals designated as the representatives of Virginia in consumers in the Class Action lawsuit against Volkswagen, In Re: Volkswagen “Clean Diesel” Marketing, Sales Practices, And Products Liability Litigation action filed in federal court in San Francisco (Case No. 3:15-MD-02672-CRB). While the $10 billion class action settlement on behalf of Volkswagen purchasers is being touted as fair and reasonable by the lawyers and government officials who brokered the deal with Volkswagen, the new filing by counsel for Mr. Fleshman on behalf of himself and other similarly situated Virginians, points out that given Volkswagen’s admitted fraud on the public and intentional violation of U.S. law, the settlement lets VW completely off the hook with a huge discount.

In testimony given to Congress, when asked if Volkswagen installed defeat device software “for the express purpose of defeating emissions controls,” Michael Horn, the CEO of Volkswagen admitted that they were “installed for this purpose, yes, for this purpose.” In cases of intentional fraud in the sale of motor vehicles, Virginia law allows a consumer to return the car to Volkswagen for a full refund of the purchase price, in addition to recovery of attorneys’ fees and punitive damages to punish Volkswagen for its deliberate misconduct. However, the proposed class action settlement only requires Volkswagen to buyback these vehicles for a portion of the purchase price and has no punitive component, which calls into question the quality of representation that Virginia owners are receiving in this Class Action. Mr. Fleshman seeks to question the Virginians who are purporting to speak for and protect the rights of other Virginians like himself, who were not allowed to negotiate with Volkswagen on the settlement. Suzelle Smith, counsel for Mr. Fleshman, stated: “If the Virginia Class Representatives do not understand the terms of the settlement and how it compares to full compensation and penalties available under the law, then they cannot by definition protect the rights of other Virginians. This is what we have a right to find out by asking them under oath.”

The proposed settlement also violates the Clean Air Act as it purports to allow owners of these “dirty diesels” to continue driving their polluting cars in violation of various State Implementation Plans that have been approved by the EPA. Pursuant to the Clean Air Act, thirteen states, including Virginia, have passed regulations making it illegal to drive cars that lack proper emission controls, such as these “dirty diesel” Volkswagens.

Volkswagen’s business plan to sell the illegal cars counted on the U.S. judicial system, government and private lawyers, not holding VW accountable fully under the available laws. For example, in filings made in lawsuits in Braunschweig, Germany, Volkswagen documents stated “the theoretical possibility that sanctions might be imposed due to a potential violation of U.S. environmental protection provisions seemed at the time to pose only a moderate cost risk.”

With liability and fraud admitted, counsel for Mr. Fleshman argue that Volkswagen should be required to return the purchase price of all the illegal vehicles, plus attorneys’ fees, plus an amount to deter Volkswagen and others from any such conduct in the future. Further, all the illegal vehicles should be removed from the road immediately by VW. “There has never been a case in the United States where a major company has admitted that its business plans for marketing a product involved intentional illegal conduct and fraud. This case is unique and saying that it is the biggest settlement in history is not the right measure. If the government and the Court let VW off with this settlement, that unscrupulous business plan will have worked, and VW will profit by its conduct,” said Suzelle Smith of Howarth & Smith. Smith asked: “What message does such a deal send to other manufacturers evaluating whether US laws have teeth? And do the Class Representatives actually understand that this is what they are consenting to for all other Virginia VW owners?”

Lead Counsel who brokered the settlement deal for the class of consumers have asked for an undisclosed amount of attorneys’ fees, at a minimum in excess of $340 million and potentially many times more. The hearing on Mr. Fleshman’s motion to take these depositions is set for September 30, 2016, in Courtroom 6 of the Honorable Charles R. Beyer, located in the United States District Court for the Northern District of California, 450 Golden Gate Avenue, San Francisco, California 94102. Objections to the settlement will be argued on October 18, 2016, before the Honorable Charles Breyer. Mr. Fleshman’s Motion for Leave of Court to Depose Virginia Class Representatives can be found on the court’s PACER system at https://www.pacer.gov/.

For press inquiries, Suzelle Smith of Howarth & Smith may be reached at (213) 955-9400, or through the Howarth & Smith website at http://www.howarth-smith.com/.

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Tomas Glaspy, Esq.
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