Arkansas lawyers filed two lawsuits last month against Volkswagen, the front edge of what’s expected to be a wave of legal action against the German automaker over the still-unfolding emissions scandal.
The civil suits, both seeking class-action status, come as Arkansas Attorney General Leslie Rutledge investigates the automaker’s dealings in Arkansas as part of a 30-state investigation.
VW has admitted that it used “defeat device” technology in 11 million four-cylinder Volkswagen and Audi diesel cars from model years 2009-2015. The tally includes 482,000 vehicles sold in the U.S.
The technology allowed Volkswagen to cheat on Europe’s tough emissions tests, making its diesel automobiles appear to emit less pollution than it actually did. The technology was discovered by West Virginia University researchers studying emissions and fuel economy.
The first Arkansas lawsuit, filed Sept. 22 in Pulaski County Circuit Court, names as defendants the company’s American unit, Volkswagen Group of America, and an Arkansas dealer, Landers Auto Group LLC.
The second lawsuit, filed three days later in U.S. District Court in Fayetteville, also names Volkswagen Group of America, along with its parent company, Volkswagen AG.
The complaints, filed on behalf of Arkansans who purchased Volkswagen automobiles, allege fraud, breach of contract and violations of the Arkansas Deceptive Trade Practices Act, among other charges.
More: Read more about the lawsuits here.
The federal lawsuit states that “defendants have intentionally concealed and suppressed the material that the vehicles emit as much as 40 times the amount of pollution allowed under federal law.”
Allison Koile, an attorney at Sanford Law Firm of Little Rock, which filed the Pulaski County suit, said Arkansans who bought an affected vehicle might be entitled to damages.
“Throughout the U.S., there are several class actions against VW/Audi because of its ongoing fraud against the very customers whose loyalty form the basis of the company’s success in recent years,” Koile said.
“We expect Volkswagen/Audi to make all of its victims whole — to right the wrongs that it has committed.”
A spokeswoman for Asbury Automotive Group of Duluth, Georgia, the publicly traded company that owns Landers Auto Group, said she wasn’t aware of the lawsuit and declined comment.
Dennis Jungmeyer, director of the Arkansas Automobile Dealers Association, said Volkswagen dealers in Arkansas could be hurt as the automaker works to fix the situation.
“It’s going to hurt the dealers if a recall action takes place in Congress,” Jungmeyer said. “Used car vehicles may or may not be able to meet the recall requirements. I would hope by the end of the year this Volkswagen recall situation will be resolved. Hopefully Volkswagen will step up and subsidize their dealers and gain confidence from customers again.”
Arkansas Business attempted to contact Volkswagen dealers in Arkansas but none returned phone calls.
Speaking to a congressional committee last Thursday, Volkswagen Group of America President and CEO Michael Horn said it could take years to retrofit affected vehicles in the U.S. He said most of the cars will require hardware installations in addition to software fixes.
Jungmeyer said the VW scandal has affected Europe far more than in the United States because Volkswagen is the No. 1 seller there. He said the number of diesel vehicles sold in the U.S. — and in particular Arkansas — is fairly low.
The scope of the problem in Arkansas remains unknown, Attorney General Rutledge said.
“We don’t know yet how many Arkansans have been affected by Volkswagen and the deceit that we have seen from them, but we are gathering that information,” she told Arkansas Business. “We have received complaints.”
Rutledge said she was limited in what she could say about an ongoing investigation. She said her office is collecting information and will decide later what action to take.
“My goal as attorney general is to make sure Arkansans are not taken advantage of and that they are made whole,” she said. “What ‘made whole’ looks like, that will have to be determined after the investigation is complete and after we see what sort of legal action we might want to take.”
Jungmeyer said the biggest immediate effect of the scandal is on the attitudes of buyers.
“Short term, it will have a little impact on dealers because of customers attitudes,” Jungmeyer said. “I think this will pass. I hope our dealers weather the storm — it’s certainly not their fault; they didn’t manufacture the vehicles.”
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