Let’s start with a quiz. “We have totally screwed up” is something you hear when:
a) your waiter brings you the wrong dish,
b) your parents gauge their effectiveness in raising a decent human being,
c) the head of Volkswagen Group of America describes a global scandal of calculated criminal fraud entailing the deceit of myriad governments and millions of consumers worldwide, or
d) all of the above, but yeah, mostly that last one.
Hopefully, you’re still following the VW emissions scandal that erupted in September and continues to unfold; if you actually own one of their cars, you’re definitely still following it. (Our friends at Jalopnik are an invaluable ongoing resource on this thing.) I’ve been getting a lot of emails from angry VW drivers who want to know their legal options. Their vehicles, after all, transformed from Gaia-cuddling envirocars into little coal-rollers overnight.
Here, then, is a streamlined legal field guide to this fiasco.
What happened?
In September 2015, the EPA informed Volkswagen that it was in violation of the Clean Air Act—the automaker intentionally and deceptively programmed certain diesel engines to selectively circumvent emissions controls. During testing, engines meet or exceed standards; on the road, however, they produce up to 40 times the nitrogen oxide output. All-caps moment: UP TO 40 TIMES.
This applied to an estimated 11 million cars globally and 500,000 cars in the United States. VW dropped the other shoe in early November that other emissions irregularities were discovered in both diesel and gas cars—roughly 800,000 of ’em. In the U.S., this also affects some Audi owners.
Why is this a big deal? It’s not like a fault that leads to imminent physical harm.
I thought I’d check in with someone who knows a few things about auto scandals and recalls: noted consumer advocate Ralph Nader. Yeah. “It’s a big deal because it involves over 11 million VW cars worldwide, and it connects both crimes involving the illegal emission of nitrogen oxides, an environmental health issue, and the consumer issue of misleading millions of buyers,” he told me. He’s not kidding about the environmental part: Some estimates place the amount of extra pollution in the world due to the scandal at one million tons, and the nitrogen oxides that make up a bulk of this cause significant respiratory disease and substantial negative environmental impact.
What makes this scandal unique? “This one is willful and knowing criminal intent,” says Nader. “Some people in VW decided that they were going to maneuver the software so that it would pass the private laboratory test, but then, when the vehicle got on the road, it violated the emission standards.” He points out that the basic problem is that car companies are able to select privately owned labs for emissions testing, and that if they were government labs, they would have been on-the-road testing, not just pristine inside-the-lab testing. And he’s right: This issue was detected and brought to the EPA by a non-governmental organization testing VWs in both environments.
The other thing that Nader alluded to was criminal intent. VW—the platonic ideal of a brand-sensitive global megacorp—went out of its way to lie to its own customers and the governments of the world. Not just lie: It very meticulously built code to deceive and defraud everyone who came in contact with the affected vehicles. That’s way beyond the “Eh, we’ll fix it later/never” negligence of many car scandals.
And we’re talking about a company that, during my lifetime, single-handedly made me think that Germany is a really nice place. (Run Lola Run and the very existence of apfelstrudel helped too, of course.) I can still faintly see a Pink Moon through all the smog.
What does this mean for someone who owns a VW?
It means you’ve got a car that—without regard to emissions—may perform nicely, but is wildly out of step with acceptable standards and has likely taken a massive hit in value.
VW is in the process of recalling the affected cars. However, as Mr. Nader indicates, “This is a unique case from other consumer-vehicle recalls, because the owner of a VW diesel here doesn’t have an economic interest in returning the vehicle for correction. The owner bought the vehicle for higher performance, value, torque, and better fuel mileage than most diesel engines usually evidence.” In other words, why would you agree to a recall service that may actually lower performance, negatively affecting resale value (though that’s clearly already shot), torque, and gas mileage?
Let’s talk money. The U.S. government is going to get a lot of it. Potential Clean Air Act violations are already estimated to cost VW $18 billion dollars. And let’s not forget litigation brought by the federal government, attorney generals in various states, and state regulatory agencies.
But this is about you. Is VW going just going to graciously offer you cash? Kind of. This week, the company announced that it would offer $1,000 gift cards to affected owners. But half of that amount has to be spent at a VW dealer, which is like getting credit at a restaurant that just gave you food poisoning. There are a couple of issues with this. First, the VW owners I’ve talked to are insulted by this and see it as a slap in the face. Second, we need to talk about how these gift cards may affect your standing in the one good shot you have at recouping some value: a class action lawsuit.
What is a class action lawsuit?
VW’s legal budget has more zeroes than the audience at a sold-out David Copperfield show, so you’re not going to file a lawsuit against them all by your lonesome. Also, you might not like the cost-benefit analysis of filing a lawsuit over such a relatively small amount. “Class action is historically used for situations where the amount of money in a given case wouldn’t make sense to bring a lawsuit,” says Michael von Loewenfeldt, a class action lawyer and partner at the San Francisco law firm Kerr & Wagstaffe LLP. That’s because in a class action, you’re suing … with friends.
In a class action, lead plaintiffs file a suit on behalf of a class of “imaginary” people out there who have suffered similar injuries, among other factors—those imaginary people, together with the actual plaintiffs, put the “class” in “class action.”
The judge then decides whether to “certify” the class. This turns the imaginary people out there into real people to be included in the class. Nader thinks that in this case, the class should be pretty easy to certify: Because the same software apparently caused the issue across the board, everyone affected is having an identical experience.
Should I join in a class action suit?
If you have an affected car, you’re probably hearing from a lot of attorneys inviting you to join their suit against VW. Most likely, these are invitations to be an initial plaintiff in the case, or maybe they’re looking for more plaintiffs or witnesses. “As the suits get going, you can be involved in multiple suits prior to the class certification,” says von Loewenfeldt. But, he says, “The general rule is you only get to prosecute your rights once.” So, double-dipping is not going to be an option for your greedy, soot-covered, diesel-soaked hands.
Even if you don’t join as a named plaintiff in the suit, you’ll likely be included as part of a class as an absent class member. At some point, you may get a notification from a court or class action claims administrator stating that you’re part of a class, and it’s time to come get your prize. So, even if you don’t actively join a class action suit as a named plaintiff, you’re likely going to be covered. “Class actions are opt-out mechanisms, not opt-in mechanisms,” says von Loewenfeldt.
But rewards don’t come quickly. Large-scale class action litigation can take years. Take that into account when you’re deciding to hold onto your VW or sell it. Also, class actions are frequently taken on by lawyers on a contingency basis: You can expect the attorney’s fee award to be anywhere from 10 to 30 percent of the aggregate damages award.
If I had an affected VW, I’d certainly want to be a part of a class action suit. Really, it’s the only affordable action against Volkswagen available to private citizens (except, of course, for passive-aggressive Yelp reviews). True, there may be fines or judgment down the road on the federal or state level that could be passed through to you—but don’t count on that.
What about the VW gift cards?
They may strike you as sour candy, but they apparently come on a strings-free basis, meaning you’re not going to have to sign a waiver of your litigation rights against VW. And this would likely be the case in court. “The interesting question is whether the money they are receiving offsets any amount they may receive as a result of litigation,” said von Lowenfeldt. This means that if you are awarded $2,500 in a class action suit, the court may decide that it should be reduced to $1,500, since you already received $1,000 (with a full $500 of that earmarked for VW-endorsed wiper fluid straight from the dealer).
This is a complex, multifaceted, and slow-moving beast that’s going to keep on evolving. You can be pretty sure that VW isn’t going to say, “You know, we don’t think gift cards are enough. Let’s lavish our aggrieved customers in showers of gold doubloons.” Not going to happen. So understand that a class action lawsuit doesn’t mean instant money or big money, but it’s your best shot at seeing any remuneration at all. You may wind up benefitting from one without having to do anything. But if this is really bugging you, don’t think small: You might as well go on the offensive however you can and let VW know, “Da da da / I don’t love you / You don’t love me.”
Ask a Lawyer is a practicing lawyer with over 15 years of broad legal experience. He is part of the team at the Unwonk Podcast and can be found on Twitter.
Subscribe to Ralph Nader’s weekly column at nader.org.
Keep in mind that this is general information, and not formal legal advice or legal representation; if you need any of that, you should get it from a lawyer in real life, not an internet column. A legal problem is serious and fact-specific, and you should treat it accordingly. But you have common sense and already knew that.
Art by Sam Woolley.
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