Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Agreement in principle reached in dealers’ actions against Volkswagen, (Aug 26, 2016)
Organizations Mentioned:State of California | Volkswagen Group of America, Inc.
By Michael Menzhuber, J.D., LL.M.
Volkswagen Group of America, Inc. has reached an agreement in principle to resolve the claims of VW-branded franchise dealers in the United States based on lost value in their franchises as a result of the car maker’s marketing and sales of certain "clean diesel" vehicles, according to a company announcement.
In June of 2016, Volkswagen reached a $14.7 billion settlement in a separate case brought by the FTC, the Department of Justice, the State of California, and private consumers which alleged that Volkswagen had mispresented that certain Audi and Volkswagen vehicles were environmentally friendly, had low emissions, complied with state and federal emission standards, and retained high resale value.
In the present case, Volkswagen has agreed to make cash payments and provide additional benefits to the dealers to resolve alleged past, current, and future claims of losses in franchise value. Further terms of the agreement will be kept confidential as Volkswagen and the dealers’ counsel work to finalize the details of the proposed settlement, including how to properly apportion payments to dealers.
The dealers’ initial complaint against Volkswagen was filed on April 6, 2016, in the District Court for the Northern District of Illinois. The litigation was subsequently transferred to the U.S. District Court for the Northern District of California.
The proposed agreement, which is expected to be finalized at the end of September, will require approval by the court.
Companies: Volkswagen Group of America, Inc.
News: FranchisingDistribution