By now you’ve probably heard Volkswagen got caught cheating emissions regulations with their TDI diesels on millions of cars worldwide. For those who own one here in the U.S., here are some initial thoughts from a consumer protection attorney’s perspective.
Owners of these cars are understandably furious. Enthusiasts bought TDI cars for their torque and efficiency, but many more mainstream buyers chose them because they believed the cars were clean and good on emissions. It turns out they were sold a false bill of goods. Furthermore, owners across the spectrum are concerned over resale value and how they’ll be affected by recalls.
First, there will be a recall. VW will be ordered to make the cars compliant with the federal standards they cheated to pass, assuming they can be made compliant. No one is sure how this will work yet. A software fix? A hardware fix? Either or both will mean a costly recall for VW but it will cost you, the consumer, nothing but your time at first.
When the terms of the recall have been hammered out, you will get a notice in the mail from VW. If you live in a Unabomber-style shack out in the woods you might not expect mail from Germans, so watch for postcards and other things that might look like junk mail. Follow the instructions on the card. It will probably involve making an appointment and waiting a very long time depending on how many other victims live in your area.
If all goes well, you will then have a vehicle which complies with federal law, most likely with a loss of performance and fuel economy. Your VW may cost more to operate from that point forward. Hyundai had a parallel issue not too long ago, wherein they had fudged on their MPG claims and ended up reimbursing people for the difference in value of the gas they bought and the lesser amount of gas they should have bought. It was complicated and messy. But it was something. Here’s an example of someone getting $70 a year for ten years.
But could VW do that for half a million drivers? Hyundai’s wrongdoing spoke to 1.2 million vehicles, so it might be possible. But that settlement is still tied up in the appellate courts, where no one wins but the lawyers.
Set that aside for a moment: If the “fix” negatively affects the performance and fuel economy of your VW, it will have been devalued. What you got is worth much less than what you bargained for. Someone owes you the difference between the two. But how do you recover that?
There will be class action lawsuits. National firm Hagens Berman appears to have filed one milliseconds after the announcement of the issue. If you join one, do not get much, if anything, of value out of it. Keep in mind that I am an attorney and have filed class actions before; I am just being realistic here.
A likely result is that members of the class will get something like a coupon good for $5 off their next car wash at the local VW dealer and the attorneys for the class will get $29 million in fees, give or take. Members of the class might get something even more illusory. A rebate on your next VW purchase! (If you are going through this now, will you be buying another VW anytime soon?)
You do not have to participate in a class action if you don’t want to. Class actions on the Federal level are “opt out,” which describes what you need to do if you want to try for more than the free carwash. You will get a class action notice that will look a little less official than the recall notice and a little more like junk mail.
Read the notice carefully. You can decide to participate or decide not to. Remember that participating will often get you nothing of value. But, many people choose to not join the class action only to never do anything further. Taking action on your own (i.e., not in the class action) means filing an individual action.
Will attorneys take cases like this? Possibly. The real question is going to boil down to how much harm has been done to the consumers because of this. If VW’s “fix” means your car’s resale value is diminished by $10,000 and your fuel economy is shot, then we’re talking. If their fix solves the problem and the cars continue to sell well, then you might not have much to chase. Take the car wash.
Until we know what the fix is we will not know what kind of litigation, if any, is right for you.
Very recently, VW has said it will put aside $7.2 billion to “cover the necessary service measures and other efforts to win back the trust of our customers.” But is that money earmarked for fines and costs payable to the Feds? Is that also going to pay for the recall?
Will any of it be left to hand out to customers for their troubles? Wait and see. Seven billion dollars may not go very far in a catastrophe like this.
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Steve Lehto has been practicing law for 23 years, almost exclusively in consumer protection and Michigan lemon law. He wrote The Lemon Law Bible and Chrysler’s Turbine Car: The Rise and Fall of Detroit’s Coolest Creation.
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