Articles from December 2015

VW’s Clean Diesel Debacle: Not an Instance of “No-Injury”

Volkswagen’s (VW) recent admission that its “clean diesel” vehicles are not-so-clean has led to a proliferation of what some characterize as “no-injury” lawsuits, in that proponents of this view allege that the vehicles did not physically or emotionally harm consumers, nor did it cause them economic loss (other than the purchase price of the vehicle). This “no-injury” argument has been closely tied to the Spokeo case currently pending before the United States Supreme Court, in which the defendant has urged the Court to hold that that there is no Article III standing unless the plaintiff has suffered an “actual injury.” Robins v. Spokeo, Inc., 742 F.3d 409 (9th Cir. 2014), cert. granted, 2015 U.S. LEXIS 2947 (U.S. Apr. 27, 2015) (No. 13-1339) (previously covered on the ILJ here). However, Spokeo involves the Fair Credit Reporting Act (FCRA), a consumer law that requires no actual transactions between the parties. While the Spokeo FCRA violations undoubtedly result in injuries, they are a different animal than those presented in the VW scandal.

An injury is defined as “[t]he violation of another’s legal right, for which the law provides a remedy; a wrong or injustice.” INJURY, Black’s Law Dictionary (10th ed. 2014). The Volkswagen debacle unequivocally involves injury. First, each consumer purchased a VW vehicle that was not as they expected. In other words, consumers paid Volkswagen for a vehicle that complied with governmental regulations and legally could be driven on American roadways, but consumers did not receive what they paid for because they are now stuck with vehicles that violate state and federal clean air requirements, including the Clean Air Act. Further, Volkswagen priced its vehicles at the market value of a clean diesel engine vehicle, which is substantially higher than a standard gasoline engine, but it fraudulently advertised and sold a vehicle that did not meet that market definition. Essentially, customers paid for a vehicle of a certain value, but actually received a vehicle that was of lower value. In the process, VW profited from this deception at the consumers’ expense.

However, consumers sustained additional injuries in the VW matter. Until repaired, the vehicles themselves may actually be worthless to many owners. For example, in California, each vehicle must be “smogged,” i.e. comply with stringent emissions standards, in order to be registered and driven on public roads. Volkswagen admits that these vehicles do not meet these standards, which could render the vehicles “un-merchantable” pursuant to California’s Song-Beverly Consumer Warranty Act. Cal. Civ. Code §§ 1791.1 and 1792, et seq. If that is so, the “injury” would be the entire transaction or price of the vehicles. Another potential injury sustained by purchasers of VW’s “clean diesel” cars is to the environment, consumers’ health, and the public as a whole. According to a recent joint study by Harvard and MIT, which was published in the journal Environmental Research Letters, VW’s deception in connection with the existing clean diesel vehicles (model years 2009-2015) is estimated to cause or have caused, by the end of 2015, sixty premature deaths in the U.S. as a result of the emissions. If not fixed, the emissions ultimately could lead to an additional 140 deaths by the end of 2016. See Barrett, et al., Environmental Research Letters, “Impact of the Volkswagen emissions control defeat device on US public health,” available here. The excess emissions are also estimated to contribute directly to 31 cases of chronic bronchitis and 34 hospital admissions involving respiratory and cardiac conditions. Id.

Injuries continue to materialize due to Volkswagen’s deceptive conduct: its violation of the consumers’ right to know what they are getting when they purchase a “clean diesel” vehicle, overvaluation of the vehicles, and health-related harms to the public, including injuries and possibly death, and the environment.

Authored by: 
Tarek Zohdy, Associate