Facts

Volkswagen Group of America, Inc. (VWGoA) designs, manufactures, markets, distributes, services, repairs, sells, and leases passenger vehicles nationwide. The transmission in the 2019 Volkswagen Jetta and 2018-2020 Volkswagen Tiguan vehicles is a medium torque capacity FWD 8-speed automatic transmission. It has wide gear ratios and substantially lower torque loss which should enable enhanced engine performance and fuel efficiency. The transmission is made compact through a two-stage clutch structure. It is touted as the world's first 8 speed automatic transmission designed for use in transverse engine applications. Owners and lessees of the 2019 Volkswagen Jetta and/or 2018-2020 Volkswagen Tiguan vehicles filed a consumer class action against VWGoA.

PLAINTIFFS' CONTENTIONS: Plaintiffs asserted claims under theories of breach of warranty, and statutory and common law fraud. Plaintiffs contended that the model year 2019 Volkswagen Jetta and model year 2018-2020 Volkswagen Tiguan vehicles contained defects. Specifically, plaintiffs alleged that the transmissions in the vehicles contained a defect that resulted in a rattling noise, a jerking/hesitation, and/or an oil leak. Plaintiffs claimed that the complained of defects with the vehicles were not repaired; that the defects were inherent in each class vehicle and was present at the time of sale; defendant undertook affirmative measures to conceal the transmission defect and other malfunctions through "technical tips" issued to its authorized repair facilities; and these technical tips confirmed defendant's knowledge of the transmission defect, but disregarded its importance and cited it as normal operating characteristics. Plaintiffs contended that the transmission defect was material because it posed a serious safety concern by impairing a driver's ability to control the vehicle and greatly increase the risk of collision. Plaintiff also asserted that the transmission was material because consumers incurred significant and unexpected repair costs. Plaintiffs alleged that defendant's failure to disclose, at the time of purchase, the transmission's marked tendency to fail was material because no reasonable consumer expects to spend hundreds, if not thousands, of dollars to repair or replace essential transmission components. Plaintiffs contended that, had defendant disclosed the transmission defect, plaintiffs would not have purchased the class vehicles or would have paid less for them. Plaintiffs alleged that defendant breached the express warranties by selling and leasing the class vehicles with transmissions that were defective, requiring repair or replacement within the warranty period, and refusing to honor the express warranty by repairing or replacing, free of charge, the transmission and its component parts, and instead, replacing the defective transmission and its components with equally defective transmissions and components. Plaintiffs asserted that by simply replacing plaintiffs' defective transmissions with similarly defective parts, defendant had failed to repair the alleged defects.

DEFENDANT'S CONTENTIONS: Defendant denied all contentions and maintained that the subject vehicles' transmissions were not defective, were properly designed, manufactured, marketed, distributed and sold, and function properly. Defendant further maintained that no express or implied warranties were breached, and no consumer statutes or common law duties were violated.

Result

The case settled. The settlement offers benefits to the class members, including warranty extensions, reimbursement for out-of-pocket costs, and a free software upgrade for the relevant transmission control modules.