Court Hawk
Volkswagon
Shutterstock

Class Action History: Volkswagen Emissions Scandal

Volkswagen has had something of a rough go of it over the last few years, though they’ve got no one but themselves to blame. The German automaker came under fire in 2016 due to the company’s apparent fraud committed to fudge emissions testing. The company faced a huge class action suit in the US, with car owners demanding full cash value for their diesel cars which had false emissions claims.

When the dust settled, VW was slapped with a huge fine by a San Francisco judge, paying out $14.7 billion all told. Most of this money went towards the German carmaker purchasing back thousands of offending vehicles at pre-scandal trade-in prices, resulting in a huge net loss for the company.

The Cheat

The cheat in question involved VW installing software on their diesel cars to fool emissions tests. Despite emitting around 40 times more emissions that was legally acceptable, the car’s software was able to trick the tests and make them appear to be operating within the legal limits. After admitting to this in September of 2015, VW was engulfed in a scandal as outrage over their deception made the rounds.

VW owners, industry commentators and environmental advocates alike condemned the action of bold-faced deception by the German automaker. The ensuing class action suit was a huge black eye for VW, as they had to settle with the class action, the state of California, the US Justice Department and the Federal Trade Commission.

The Settlement

The $14.7 billion settlement was actually comparatively lax: owners weren’t compensated for the original market price of their vehicles, but instead only the pre-scandal trade-in value. In spite of this, it remains one of the largest class action settlements of all time, and is the largest fine ever levied on a carmaker accused of misconduct.

In the years that followed, Volkswagen has taken steps to clean up its public image, and its vehicles’ emissions. Ad campaigns centered on environmentally-friendly initiatives, money paid out to clean-car programs and redesigns of their vehicles to comply with stricter emissions guidelines have all followed in the years after the scandal. However, the company still carries the reputation of deception and anti-environmental business practices to this day.