VW “Clean” Diesel Fraud: A new approach

The many, many federal class action cases against Volkswagen have been consolidated in Northern California, and it looks like consumers are in for a slow slog. My co-counsel, Tim Quenelle, and I put our heads together and have developed a new strategy option.

We believe that we can efficiently handle individual cases for people who bought or leased the vehicles in Oregon. We are now accepting select individual cases for Oregon consumers.

Our goal is to move these cases quickly. The beauty is that if we win VW must pay our fees, so we are able to offer affordable representation to consumers who have been wronged here.

Let us know if you have more information. You can call me at 503.228.6474 or email me at david@davidsugerman.com or 503.228.6474.

VW Clean Diesel Fraud and the “Goodwill” Package

I spent most of last week at the National Consumer Rights Litigation Conference in San Antonio. Among the many benefits is the chance to visit with colleagues who are the best consumer-side advocates in the country. I caught up with my colleague, Elizabeth Cabarser, one of the most talented consumer lawyers I know, and we had a chance to visit about the VW customer goodwill package. Elizabeth pointed out this order StipOrdReGoodwillProgram USDC MI from the U.S. District Court in Michigan, in which Volkswagen stipulated that participation in the program would not impact claims in the fraud case against it.

This is an important development for those who are concerned about the fine-print in the loyalty cards. Elizabeth and her team in Michigan have done a great job in getting this order entered. It’s stronger because Volkswagen stipulated to the order. That means that the issue is completed, and there is no effective means of appealing. This is a good development.

Let’s not lose sight of a few things. These benefits are mixed, and they are tiny. There is still a problem that it looks to me like VW is trying to establish a direct link with customers. Also, it’s possible that part of this is being done so that VW lawyers can point to all the good things they did, in order to argue that VW should not be punished for their misconduct.

That said, for those consumers who wish to take advantage of these benefits, the order provides protection.

David

VW Customer Care Diesel Fraud: Hello South Dakota

Volkswagen announced its customer care program for consumers cheated by the clean diesel fraud. The program gives consumers who register a $500 Visa gift card, a $500 dealer coupon, and three years of free roadside assistance.

The last two benefits are nothing more than slick marketing, designed to drive sales. The first–that Visa card–comes with some wicked fine print.

You have to root around in the shiny website to find the cardholder agreement, and then you have to page through that to get to this gem:

“10. WAIVER OF RIGHT TO TRIAL BY JURY
YOU AND WE ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL RIGHT BUT MAY BE WAIVED IN CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, YOU AND WE KNOWINGLY AND VOLUNTARILY WAIVE ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT. THIS JURY TRIAL WAIVER SHALL NOT AFFECT OR BE INTERPRETED AS MODIFYING IN ANY FASHION THE DISPUTE CLAUSE SET FORTH IN THE FOLLOWING SECTION, IF APPLICABLE, WHICH CONTAINS ITS OWN SEPARATE JURY TRIAL WAIVER.

IN THE EVENT OF ANY DISPUTE OR CLAIM RELATING IN ANY WAY TO THIS AGREEMENT, CUSTOMER AGREES THAT SUCH DISPUTE SHALL BE RESOLVED BY BINDING ARBITRATION WITH THE AMERICAN ARBITRATION ASSOCIATION, UTILIZING THE RULES OF PROCEDURE OF SUCH ARBITRATION SERVICE, FURTHER, ANY SUCH ARBITRATION SHALL TAKE PLACE IN SIOUX FALLS, SOUTH DAKOTA AND THE LAWS OF THE STATE OF SOUTH DAKOTA SHALL APPLY. THE DECISION OF AN ARBITRATOR WILL BE FINAL….”

Show of hands: So who wants to go to Sioux Falls to have their case decided by a professional, corporate arbitrator?

It is unclear whether VW is trying to capture the Diesel Fraud claims in this arbitration clause, but the language is broad enough to raise serious questions.

And of course, VW is trying to buy consumers’ loyalty for $1,000. Seems kind of cheap, given the scope of this multi-billion dollar fraud.

At bottom, this is risky business.

-David

VW Diesel Fraud–New filing: Bricker v. Volkswagen Group of America, Inc.

Catching up. Last week, we filed Bricker v. Volkswagen Group of America, Inc., U.S. District Court Case No. 3:15-cv-01785-PK (D. Or.) Along with my frequent collaborator, Oregon attorney Tim Quenelle, I joined forces with my friends at colleagues at Cohen & Malad from Indianapolis.

For those who like such things, here is a copy of the complaint: 1 – Complaint. The case is filed as a national class action. It protects the interests of anyone who purchased or leased one of the affected VW Group vehicles.

The case arises out of the well-publicized diesel engine fraud for Volkswagen “clean diesel” vehicles. In selling various VW and Audi diesel vehicles, the Volkswagen Group represented that these vehicles were high mileage and way low on emissions. As has been widely noted in the press, the high-dollar fraud rested upon sophisticated cheat code or defeat device that switched the vehicles’ operating modes when they were being operated in a parked condition for emissions testing.

The “clean” low-emissions mode did not and could not operate while actual consumers drove the vehicles. Instead of driving green, clean diesel cars, class members were driving dirty diesel vehicles that violated pollution standards.

People paid premium prices for these clean vehicles. In Oregon and Washington, especially, green consumers pay extra for earth-friendly products. VW hyped that clean, green technology in its sales and marketing efforts, and they made a mint. The clean diesel products pushed VW to the number one position in worldwide car sales.

No surprise that we’re hearing from a lot of people. We’ve developed an initial information email for those who have questions. Feel free to email me at david@davidsugerman.com if you need more information, and we’ll mail out the initial information. (I have not posted it here because doing so destroys confidentiality. And we really, really don’t want to do that.)

The case is almost certainly going to be treated as a multi-district litigation (“MDL”) case. When cases are assigned to the MDL, the rules and processes are different. Once it is assigned–probably not for a few months–I’ll update with more information.

In addition to our email packet, I would recommend connecting with us on Facebook if you are concerned about these issues. We tend to post there more frequently.  And of course, if our information and FB posts don’t answer your questions, feel free to call or email.

-David

Update: Scharfstein v. BP West Coast Products (Oregon ARCO gas debit card fees)

There have been two important developments in our win over BP. The case involves illegal debit card charges for gas purchases at Oregon ARCO stations. Details on the history are here with a few additional posts here.

A bit of a summary first. Our claim process was a smashing success. Over 1.7 million people, roughly 83 percent of the class, made claims. That’s an awesome result in any class action.

So two things happened this month. First, the Oregon Legislature passed and Gov. Kate Brown signed HB 2700, a bill that changes how unclaimed money is handled in class actions. BP opposed the bill. Here is an awesome insider’s view of some of the many gyrations and personalities that BP hired to kill the bill. (Love the comments, especially!)

Anyway, the bill appears to apply to this case. BP disputes that, of course. So what does it mean? Well, it means that Judge LaBarre must sort out whether it applies and–if it does–how to go forward to finish what needs to be done before entry of judgment. As a lawyer who practices in these areas, I am fairly certain that the bill applies to our case. So that’s the easy part. Then comes the “Now what?” portion, and my guess is that that will slow entry of judgment.

The good news is that BP must pay 100 percent of the value of the verdict. They don’t get to keep the money. Better yet, the money goes to legal aid and other worthy related purposes to benefit consumers. Best of all, we are talking about roughly $60 million dollars.

The only downside is that it slows down our case somewhat, and it gives BP a big issue to argue on appeal. We don’t really get to choose here, so we’ll take the bitter with the sweet and move on toward wrapping everything up in the trial court. Not sure when that will be by the way. But after we get it wrapped up, BP has indicated that it will appeal. As we’ve said many times over, the appeal could take years. And of course, there is always a risk that BP will overturn the verdict on appeal.

But let’s be very clear about something: They want more fight? We got more fight. David is not intimidated by Goliath.

I mentioned two things happened. The second happened earlier this week. Judge LaBarre ruled on the fee petition. As we explained in the class notice, we were going to ask the court for no more than 20 percent, or $40 per class member.  Judge LaBarre granted part but not all of our requested fees.

Each class member’s share of fees is $35.15 or 17.57 percent. (If you want a comparison to an individual case, we usually charge individual consumers 33-40 percent, depending on whether the case settles before trial.) So when and if final payday comes around, each class member should receive $164.85, plus interest, if the case goes all way to the bitter end.

So that’s the news from the trenches. Thanks for your continuing patience. Keep in mind that we do updates on our Facebook page, so if you’re a user, you can find news there about this case and other pending major cases against KBR and Career Education Corp. If you’re a Twitter user, I am @DavidSug, though that’s not really a work account. Note that I do not offer legal advice in response to comments on our blog or on Facebook or Twitter. It’s not that I’m unwilling to answer questions. It’s more that we are required ot protect your confidentiality. And we take that seriously. So feel free to call (503.228.6474) or email me davidATdavidsugerman.com if you have questions.

-David

BP class action update: Claim time!

The claim process has started in our consumer fraud class action against BP for illegal debit card fees at Oregon ARCO stations. We’re getting a lot of calls, emails, and questions on our Facebook page.

And on top of it all, ice and snow have moved into Portland. So it looks like I may not be able to get to my office to answer calls today.

A few details and updates.

1) One common question is “How do I make a claim?

There are two ways. If we recover your name and address, you’ll get a notice that says you’re in. If you get a letter, you don’t have to do anything more to make your claim.

The notices are starting to go out this week and will continue as we get more names and addresses. We have about 500,000 letters going out this week. I’m hoping that we’ll get another million names and addresses.

To keep your data secure, I do not have direct access to it, so I can’t look up whether we’ve recovered your data.

For those people whose records we do not recover, you will need to file a claim form. Very important: We can’t file for you because you need to fill out the form.

Here is the link to the claim form

2) More information

The official court-approved website is here

FAQ’s on the official website are here.

If you want more of a flavor of the history of this fight, you can read blog posts collected here.

3) What will consumers who make claims get?

The jury verdict means a maximum of $200 for each consumer who paid the illegal debit card fee between January 1, 2011 and August 30, 2013. The court may deduct up to $40 from each claim to contribute to fees and expenses. We’re asking the court to order BP to pay all the fees–we don’t know how the court will rule. Bottom line: Depending on the court’s ruling, each person who makes a valid claim will get $160-200.

4) When do I get my money?

Great question. Don’t go spending it yet. BP tells us they will appeal. That may well take years. If BP wins on appeal, we may not collect a dime. (And by “we,” I mean you and me!) But if we keep winning, you also get interest at 9 percent on your claim.

5) What’s next?

We hope to finish the claim process by December 31. There is an attorney fee hearing in February. (Sorry, I don’t have the date at fingertips but will make sure it gets posted on the official site.)

We’re pleased with our progress, but there is far to go. My promise to you: Our legal team will keep fighting until we see this thing through.  We’ll also do our best to answer questions and get back to you, but we’re buried in this, so please be patient.

Best contact for me is david@davidsugerman.com or by phone 503.228.6474. Thanks for you patience and your support.

David Sugerman

BP ARCO class action: A straight-up win for consumers

On Friday, January 31, 2014, the jury returned its verdict in favor of BP Oregon ARCO and am-pm minimarket gas purchasers. The jury found that BP recklessly violated the Oregon Unlawful Trade Practices Act. The 2.9 million class members are each entitled to make claims for $200. Media reports are here (OregonLive), here (KOIN-6), and here (KATU-2 pretrial)

Yes, that is a $580 million result. It is fair to say we are pleased. And proud.

We’re getting a lot of questions. I’ll try to answer some here.

So what’s next?

We are due back in court on March 7 to discuss the next round of proceedings. In the near future, we’ll start a claim form process. It’s really important that you file a claim form once the claim process opens. We do not know yet when that will happen, but we’ll note a number of resources for you here.

How do I stay informed?

We’ll continue to post updates here on this blog. We also add updates on our Facebook page. If you’re a user, like us there, and you’ll get updates and links back to the longer updates here.

You should also register with the official information page to receive official update information.

Do I need to take any action to protect my rights?

If you meet the class definition, you do not. We don’t know what requirements the court will set to prove claims. If you have access to receipts or bank records showing a gas debit card purchase with a transaction fee at Oregon ARCO or am-pm stations, it would be wise to save those documents. It may help you prove your claim.

When will consumers see their money?

Good question. BP has announced its intention to appeal. While the claim process could start as early as March (or maybe later), an appeal could string this out for years. That is why registration is important.


A few parting thoughts

We are deeply appreciative of the service provided by the jurors who served for three weeks in the trial in front of Hon. Jerome LaBarre. The entire case shows that a small group of determined consumers can take on a corporate giant like BP and have a fair trial in Oregon.

Further updates?

Well sure. When we know more, we’ll post it.

David Sugerman

BP Class Action Update: Class Notice

Finally. Class notice has started in our class action against BP. The case involves illegal debit card charges levied on Oregon gas purchasers. We’re suing under the Unlawful Trade Practices Act because BP violates the Oregon rules governing gasoline price advertising.

Here is a link to the class action notice website.

Trial is set to begin January 14, 2014. If we win, members of the class may be eligible to claim up to $200 for these illegal transactions. More detail as it becomes available. For those in the class, please visit the website. You might want to register there so that the administrator can contact you if that becomes important.

Want more information about the case? Go here and here.

Feel free to call us or email if you think you might be part of the class or if you have stories to share. I am lead counsel for the class.

 

David Sugerman

BP class action certified for ARCO station debit card fees

In our long running consumer case, Scharfstein v. BP West Coast Products, Judge LaBarre ruled late last week that the case may go forward as a class action. Judge LaBarre appointed David Sugerman and Tim Quenelle to serve as class counsel. Notice to the class is expected to go out in early November, and trial is set for January 14, 2014.

In the case, consumers claim that BP violated the Oregon Unlawful Trade Practices Act by improperly selling and advertising gas at ARCO stations and am-pm minimarkets. The gas stations advertise their prices without condition, but when consumers pay with debit cards, they are charged a fee–now $.35–on top of the gas purchase price. The consumers claim that the failures to disclose the charges and the addition of the charges on top of the total gas purchase violate Oregon law.

The class seeks $200 per consumer.

There is far to go on this case. If you have experience with these charges and would like to share your story with us, could you drop me a line or call us (503.228.6474)?

-David

Update: Class members’ brief filed in consumer fraud case against Career Ed Corp and Western Culinary Institute

On our long-running consumer fraud class action against Career Education Corp and Western Culinary Institute/Le Cordon Bleu Portland, I am pleased to report that we filed our answering brief in the Oregon Court of Appeals today. It’s a monster, and if the WordPress Gods are with me, it appears in PDF here: Brief – Answering FINAL

My dear friend and colleague, Maureen Leonard, joined our team to handle the briefing. The brief is her work, and it is a thing of beauty.

About the brief:

For consumers and class members-This is a technical brief on rules about procedure, appeals, and arbitration that might cause you to snooze. The gist is that Career Education Corp. was content to use the court system to enforce its rights and then when things were going bad, CEC sought to delay by filing another motion to compel arbitration.

For attorneys-The posture is such that this is something of a one-off brief and case. Still, if you want to see an appellate master at work, read Maureen’s work.

So next up is CEC/WCI/LCB-Portland reply brief. And then it is on to oral argument in front of a three-judge panel. We’ll keep you posted, of course.

David Sugerman