VW scores win against objectors’ ‘clean diesel’ claims

A federal jury handed Volkswagen AG an early victory Tuesday by awarding just $5,727 in compensatory damages to 10 plaintiffs who refused to accept the car company's settlement in a consumer fraud case involving its 'clean diesel' vehicles that included devices that gamed emissions testing procedures.

A group of 350 objectors rejected a settlement with Volkswagen, opting to seek damages separately instead. But the jury awarded a small fraction of what they sought in a test case.

The largest award for the owners of 7 vehicles was $3,133. Three other plaintiffs were awarded between $582 and $1,080 in compensatory damages. Another three owners got nothing even though the jury found they were harmed by the company's conduct.

The case is not over as plaintiffs' attorneys are seeking punitive damages in the next phase of the trial. In re Volkswagen "Clean Diesel Marketing, Sales Practices, and Products Liability Litigation, 15-MD02672 (N.D. Cal., filed Dec. 8, 2015).

But Volkswagen hailed Tuesday's outcome as a victory.

"The jury's verdict confirms that the plaintiffs' losses were minimal at most. These individuals were offered generous higher amounts under Volkswagen's settlement programs but rejected them, unlike 99.9 percent of eligible customers," a Volkswagen spokesperson said Tuesday in a prepared statement. "Now they and their lawyers will have the nerve to ask for a bigger unjustified windfall in the next stage of the proceedings."

The objectors were represented by Scot D. Wilson and Lauren A. Ungs of Knight Law Group LLP along with Bryan C. Altman of Altman Law Group. They could not be reached for comment after the verdict Tuesday afternoon.

The attorneys have been at odds with Judge Charles R. Breyer of the Northern District of California before and during the trial. They filed a motion for a mistrial on Sunday, asserting the veteran judge's comments to the jury have displayed bias against the plaintiffs.

"The Court's comments and questions have shown hostility and skepticism towards the Plaintiffs, Plaintiffs' counsel, or the merits of their case in the presence of the jury, and have operated to taint the jury's perception of the merits," Wilson wrote.

Sullivan & Cromwell LLP attorney William B. Monahan said the court should reject the motion. "Plaintiffs' counsel have 'knowingly made the tactical decision to challenge the court's authority and impartiality at every step,'" he wrote in a filing Tuesday before the verdict was announced.

The company was represented by Sullivan & Cromwell attorneys Robert J. Giuffra Jr., Sharon L. Nelles, John G. McCarthy, Monahan, and Michael H. Steinberg.

Volkswagen has spent about $25 million paying settlements with federal and state regulators as well as owners of 599,650 vehicles, according to court filings. On Monday, Breyer approved $10.88 million in attorney fees and $2.12 million in costs to counsel representing the main class and represented by a group of attorneys led by lead counsel Elizabeth J. Cabraser of Lieff Cabraser Heimann & Bernstein LLP.

The settlement in that case provides $96.5 million in cash compensation to the main class, with payments ranging from $518 to $2,332 per vehicle, according to Cabraser's filing.