Facts

Audi and Volkswagen used a 1.8 liter turbo engine in two models of their cars from 1997 through 2004.

Owners and lessees of the two types of cars filed a class action suit against Volkswagen and Audi alleging that the engines were overly prone to the formation of oil sludge and coking deposits, which caused a high incidence of engine failure, regardless of maintenance.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that the companies failed to honor an 8-year unlimited warranty extension issued in 2004, denying any claims of engine failure due to sludge. Plaintiffs further alleged that the companies knew of the problem, and failed to disclose the issues to the owners.

Result

The parties reached a settlement whereby Audi and Volkswagen agreed to cover the maintenance costs, as well as provide eligibility for an extended warranty for oil sludge damage.