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Volkswagen Emissions Fraud Lawsuits Consolidated in California Federal Court

Dec 10, 2015

On December 8, 2015, the Judicial Panel on Multidistrict Litigation consolidated more than 500 lawsuits accusing automaker Volkswagen of cheating on vehicle emissions standards.

The panel said the California federal court in San Francisco is the best venue for the multidistrict litigation (MDL) since nearly one-fifth of the suits were filed in California, Law360 reports. California's Northern District has 30 pending actions - including the first case filed. California has 100 of 513 nationwide federal lawsuits.

"Relevant documents and witnesses may be found in both the Northern District and throughout California, given the role played by the California Air Resources Board in uncovering VW's use of defeat devices on its diesel engines," the panel wrote in a seven-page order.

In September, the Environmental Protection Agency (EPA) accused Volkswagen of violating federal emissions standards, saying the German automaker admitted to the violations when asked for an explanation of third-party emissions test results that differed from Volkswagen's numbers. The company has estimated that about 11 million vehicles worldwide are affected by the scheme, according to Law360. Volkswagen has recently acknowledged that a number of its gasoline-powered cars are also affected in the emissions scandal. Volkswagen admitted that it had installed special software to trick emissions-testing machinery. The company had spent more than a year telling federal and California regulators that their evidence was mistaken, the New York Times reports.

The JPML assigned U.S. District Judge Charles R. Breyer to oversee the MDL, saying the veteran federal judge is well versed in complex MDLs, having presided over nine such cases. "We are confident that Judge Breyer will steer this controversy on a prudent and expeditious course," the order states.

The transfer order is the latest in a vast case that alleges that Volkswagen used defeat devices in some of its "clean" diesel vehicles in order to appear to comply with emissions standards while actually exceeding allowable levels of chemicals emitted into the air. Volkswagen had enjoyed a reputation for "engineering prowess," and a "carefully crafted image as a maker of efficient and environmentally friendly cars," according to the Times.

During tests, the Volkswagen diesel engines with illegal software make full use of pollution controls and can pass emissions tests. But during regular operation, the engines emit many times the allowed amount of nitrogen oxide, Law360 explains.

Volkswagen put aside €6.7 billion euros (more then $7.3 billion dollars) from profits to cover the expense of recalling and repairing millions of cars in Europe and the United States equipped with the illegal software, the Times reports. That sum does not include the cost of fines Volkswagen is expected to have to pay to the EPA and regulatory authorities in other countries. Volkswagen is expected to face even more lawsuits from customers who say the company sold them cars based on false emission standards.

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