US car dealer sues VW for Dieselgate damages | Business| Economy and finance news from a German perspective | DW | 07.04.2016
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US car dealer sues VW for Dieselgate damages

For the first time in the Volkswagen emissions scandal, an American car dealer has filed a lawsuit against the German carmaker, claiming it intentionally defrauded him by installing cheating software in its diesel cars.

Ed Napleton, owner of three VW dealerships in the US that are suing Europe's largest auto maker over its massive diesel emissions scam.

The suit was filed in a federal court in Illinois on Wednesday and was the first brought by a Volkswagen franchise dealer over the German carmaker's admitted use of software that "allowed nearly 600,000 vehicles in the US to emit up to 40 times legally allowable pollution," Hagens Berman - the law firm representing Napleton - said.

In the lawsuit, Napleton, whose family owns more than 50 auto dealerships in the US, claims VW's actions combined with the loss in value of VW diesel vehicles, the inability of dealers to sell the VW diesels and the loss in value of the VW brand, resulted in a devastating blow to his profits and the value of his franchises.

In addition, VW's US affiliate in charge of its dealer network withheld all information about the scandal from dealers, Napleton says.

Steve Berman, managing partner in Hagens Berman, said the dealers were now stuck with lots full of diesel vehicles they are unable to sell. "VW dealerships large and small have been at the mercy of an unethical corporation, much like the hundreds of thousands of owners across the country, and we believe it's time to take a stand for their rights."

With the lawsuit, Hagens Berman wants to pave the way for a class action lawsuit that would be joined by other Volkswagen dealerships throughout the US. But a majority of them seem to be distancing themselves from the suit, according to the Volkswagen National Dealer Advisory Council.

Council chairman Alan Brown told the German news agency DPA on Thursday that VW dealers want to get past the issue quickly. "It is not unexpected that a few 'outlier' dealers would file a lawsuit against VW," Brown said in an e-mail to DPA, adding that the lawsuit "may provide a headline or two, but it is a substantially longer, more contentious and a much more costly path towards settlement."

Regaining confidence

VW currently has 650 dealerships across the US. The suit also alleges that the carmaker carried out an illegal pricing and allocation scheme that favored some dealers over others and illegally channeled financing business to VW affiliate Volkswagen Credit.

A Volkswagen spokeswoman said Thursday the company was reviewing the lawsuit and remained committed to resolving the problems as quickly as possible. VW was working to "regain the confidence of customers and dealers," she added.

Revelations about VW diesel cars' ability to circumvent emissions tests was made public in September by the US Environmental Protection Agency (EPA). The company subsequently admitted that more than 11 million of its vehicles were fitted with so-called "defeat devices." As a result, VW is facing lawsuits by the US Justice Department, some US states and complaints filed on behalf of hundreds of VW car owners in the United States.

VW emissions scam stands out

Meanwhile, the German Federal Motor Transport Authority (KBA) has completed its tests on diesel-engine vehicles registered in Germany, which is part of an effort by the Transport Ministry to find out if other car companies have cheated on emissions, too.

German business daily Handelsblatt on Thursday cited from KBA's report - which is due to be released later in April - saying the authority had concluded that only Volkswagen used defeat devices to cheat on emissions tests.

Other cars showed irregularities during on-road testing of emissions levels, but these were within legal limits, the paper said quoting sources familiar with the tests.

uhe/cjc (dpa, Reuters)

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