US class action targets VW - and its bosses

The Volkswagen Chattanooga Assembly Plant in Chattanooga, Tennessee is shown in this November 4, 2015 file photo. A lawyer for Volkswagen AG told a federal judge on February 25, 2016 the German automaker is making progress in senior level settlement talks with the U.S. Justice Department, Environmental Protection Agency and California to reach a resolution over excess emissions in nearly 600,000 diesel vehicles. REUTERS/Tami Chappell/Files

The Volkswagen Chattanooga Assembly Plant in Chattanooga, Tennessee is shown in this November 4, 2015 file photo. A lawyer for Volkswagen AG told a federal judge on February 25, 2016 the German automaker is making progress in senior level settlement talks with the U.S. Justice Department, Environmental Protection Agency and California to reach a resolution over excess emissions in nearly 600,000 diesel vehicles. REUTERS/Tami Chappell/Files

Published Feb 26, 2016

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San Francisco, California - Top executives at Volkswagen are in the cross-hairs of US litigation in the scandal over manipulated emission data.

A class action suit now accuses them of knowingly being part of the conspiracy to deceive consumers. Not just the companies, but they personally might face fines.

VW battling to put a price on scandal

How quickly things can change. At the start of the week Volkswagen chief executive Matthias Mueller sought to exude some optimism.

“There is a possibility, through good work, to experience a renaissance in America - and we're going to do it,” he said on Monday.

But then came the next setback. While Mueller was in Germany spreading an optimistic message, US lawyers on Tuesday filed a massive “consolidated consumer class action complaint” to the US District Court in San Francisco in the scandal over fraudulent diesel exhaust emission data.

This suit targets not just the companies of the VW group, but also the top executives individually.

“Volkswagen cheated its way to the top of the automotive food chain and spared no victim along the way, targeting its customers, US and foreign regulators, and even the very air we breathe,” charged the more than 700-page complaint on behalf of more than 500 plaintiffs across the United States.

“Volkswagen's illegal scheme was born out of greed and ambition to dominate the global automotive market at any cost.”

Calling the case “one of the most brazen corporate crimes in history,” the plaintiffs accused VW and its top executives of fraud, breach of contract, misleading advertising and distortion of competitition.

‘CHIEF ARCHITECT’

The class action complaint filed before Senior District Judge Charles Breyer in San Francisco bundles all the more than 500 civil lawsuits filed by consumers and states from around the United States into one single suit in order to simplify the complex legal process.

Above all, the suit targets former top VW boss Martin Winterkorn, who lost his job last year after the scandal broke about the software fitted on hundreds of thousands of cars to rig emissions tests.

He was called the “chief architect” in VW's strategy of pushing sales in the US by intentionally deceiving consumers.

Winterkorn, who took over at VW in 2007, had admitted to the faulty emission data in September, but insisted that he had known nothing about it before the scandal broke.

The suit also takes aim at Winterkorn's successor, Mueller, who is charged with having “known or recklessly ignored” the plot and so had profited greatly from the scam.

Mueller had previously headed VW's luxury car division Porsche and oversaw the market launch of its diesel-powered Cayenne Diesel.

The suit targets not only VW but also the Audi and Porsche divisions, as well as components supplier Bosch, which stands accused of having delivered the necessary software for the so-called “defeat device” that manipulated the emission data.

Along with Winterkorn and Mueller, the suit names VW's head of US operations, Michael Horn, Audi boss Rupert Stadler, Bosch chief executive Volkmar Denner, and the heads of the US operations of Porsche and Audi, respectively Ulrich Hackenberg and Wolfgang Hatz, both former VW engineers.

HUGE FINES

What the massive broadside makes clear is that US plaintiffs and regulators do not believe VW's chief contention: that the fraud was the work of individual lower-level employees.

A conviction on charges of conspiracy at the top levels of the VW concern could result in huge fines.

In the wake of the suit, VW has kept quiet, with a spokesman saying the company was withholding comment in view of the ongoing legal proceedings.

As such, the accusations are going unanswered, leaving the stage to the US lawyers - who are demanding tough punishment that goes beyond mere compensation for damages.

VW already faces the possibility of fines in the double-digit billions of dollars by the US Department of Justice.

If Judge Breyer issues a verdict against the VW managers, it could mean that not only would the VW concern be held accountable, but also the managers personally.

So far, the suit is by civil plaintiffs. But it is still not certain whether the scandal could spill over into a criminal investigation in the US.

DPA

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