Judge rules against plaintiffs who opted out of VW deal

A federal judge wrapped up remaining issues in the bellwether Volkswagen trial testing claims of 10 plaintiffs who opted out of the automaker's diesel class settlement.

U.S. District Judge Charles Breyer of the Northern District ruled in an order issued Friday that Volkswagen U.S. offered plaintiffs an "appropriate correction" under California's Consumer Legal Remedies Act, denied plaintiffs' motion for a mistrial and reduced each award of punitive damages to four times what the plaintiff had received in compensatory damages. Only five of the plaintiffs had been awarded compensatory damages. In re: Volkswagen Clean Diesel Marketing, Sales Practices, and Product Liability Litigation, 15-MD-02672 (N.D. Cal., filed Dec. 8, 2015).

"The jury and court rightfully denied these plaintiffs the unwarranted windfall of millions of dollars they had wanted. Instead, after years of litigation, these 10 plaintiffs obtained less collectively than they would have received under Volkswagen's TDI consumer settlement programs," a Volkswagen spokesperson said. "The result of this bellwether trial is a testament to the fairness of the settlement programs and shows why 99.9% of eligible U.S. customers chose to participate in them."

Approximately 350 California consumers opted out of Volkswagen settlements for installing emissions-cheating devices and chose to seek damages separately. Plaintiffs' attorneys argued their offers were underfunded when considering Volkswagen's admitted violation of the California Legal Remedies Act.

On March 9, a federal jury awarded $100,000 in punitive damages to the drivers of four vehicles who opted out of the settlements, with each receiving $25,000 in addition to sharing roughly $5,000 in compensatory damages. Three other plaintiffs received nothing.

However, Breyer concluded the jury's punitive damages award crosses "the line of constitutional impropriety."

In his order, Breyer outlined the disparity between the actual harm the plaintiffs endured and the punitive damages awarded. Although he found Volkswagen's conduct "egregious," no plaintiffs suffered physical harm from the misconduct and there was no evidence indicating that the targets of the misconduct were financially vulnerable, according to the order.

Breyer noted the 9th U.S. Circuit Court of Appeals recently held that a four-to-one ratio was "the most the Consitution permits" in a case involving comparably egregious misconduct. In re: Ramirez v. TransUnion LLC, 951 F.3d 1008, 1036-37 (9th Cir. 2020, filed Feb. 27, 2020).

Plaintiffs' attorneys also argued the potential harm their clients suffered was substantially greater than the "small compensatory damages awarded" because their clients could have suffered adverse health effects from the nitrogen oxides emitted by their Volkswagen cars.

"There is no need for the court to try to guess at the harm that fraud might have caused -- the jury evaluated the harm it did cause," Breyer concluded in the order.

Despite attempts from Knight Law Group and Altman Law Group, which represented the vehicle owners, to disqualify Breyer by attacking his pretrial evidentiary rulings and interactions during trial, their request for mistrial was denied. Requests for comment from the plaintiffs' attorneys were not returned Friday.

"Because none of the statements, rulings, or purported actions of the Court 'projected to the jury an appearance of advocacy or partiality' or demonstrated 'actual bias,' the motion for a mistrial is denied," the order reads.