Friday, November 26, 2021
Nov. 26, 2021

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Attorneys: Clause in VW ‘goodwill’ payment might block litigation

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Volkswagen is offering $500 in cash and $500 in VW dealer credit to owners of its diesel cars, a first step in compensating them in the wake of a global emissions-test cheating scandal.

The “goodwill package” is a stopgap measure while the automaker works on a way to fix the cars, which contain software designed to evade U.S. pollution regulations.

The automaker says customers don’t have to give up their right to sue the company — as thousands already are — but some attorneys are disputing that and warning customers not to sign an arbitration clause required to get the money.

“It is a complete end run around the litigation that is in place,” said Amy Williams-Derry, an attorney with Keller Rohrback, one of the law firm’s pursuing class action litigation against the automaker. “They are trying to buy off plaintiffs who have already sued and consumers who would benefit from a class-action recovery.”

Some of the hundreds of cases already filed seek to have VW buy back the vehicles for the full price the customers originally paid.

To get the money, VW customers must visit www.vwdieselinfo.com, enter their Vehicle Identification Number, their mileage and contact information. They will also have to take their car to a dealer to activate the gift cards to prove that they own the vehicle.

Customers will also get access to a free 24-hour roadside assistance program for three years.

To be eligible, consumers must be the registered owner or lessee of a Volkswagen diesel with the 2-liter TDI engine as of Nov. 8.

The company sold about 482,000 of the vehicles with the cheating software in the U.S. and up to 11 million worldwide. The diesels spew as much as 40 times the legal limit of nitrogen oxide in normal driving; the software hides those emissions when it detects test conditions.

VW faces a criminal investigation in the U.S. and potential federal Clean Air Act violation fines of up to $18 billion.

VW said the arbitration clause, buried in clause 11 of its lengthy “Goodwill Package Cardholder Agreements” — is part of the bank terms for the gift cards and is not designed to fool consumers into waiving their legal claims against Volkswagen.

But Williams-Derry cautioned that “the clause is worded extremely broadly, and the courts have history unfortunately of interpreting these clauses expansively.”

The agreement dictates that any arbitration must be brought in Sioux Falls S.D., a location “that is an extremely inconvenient” for the vast majority of VW diesel car owners, Williams-Derry said.

Volkswagen officials characterized the plan as a way to help out customers while it figures out ways to bring the cars into compliance with air pollution rule.

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