Judge Sustains RICO and State Law Claims Against Volkswagen and Bosch in Volkswagen Dieselgate Lawsuit on behalf of owners and lessees who sold their cars before Sept. 18, 2015

10/03/2018

SAN FRANCISCO – U.S. District Judge Charles R. Breyer, overseeing the landmark Volkswagen Dieselgate lawsuits, issued an order allowing the RICO and state law claims of consumers who sold their affected vehicles prior to the disclosure of the fraud to continue, according to Hagens Berman.

The order upholds the claims of tens of thousands of prior owners of affected diesel vehicles that Bosch and Volkswagen participated in a conspiracy to create and implement an emissions cheating defeat device in nearly 600,000 cars sold in the United States. The Dieselgate fraud, plaintiffs state, harmed all purchasers of affected vehicles (whether or not they still owned the cars when the fraud was disclosed) because they:  (1) paid a premium and/or financing fees for features that they never received; and (2) the premiums caused their vehicles to depreciate more than cars without the premium diesel features would have depreciated over the same period of ownership.  Judge Breyer agreed, finding that Plaintiffs had adequately alleged Article III standing to bring their claims.

In his order, Breyer stated that the claims on behalf of prior owners were based on a “novel twist” and that plaintiffs “plausibly alleged that Bosch partnered with Volkswagen to implement the defeat device in the affected vehicles, and by doing so participated in the conduct of a years-long enterprise to defraud U.S. regulators and consumers.”  Judge Breyer rejected Bosch’s arguments that its actions were not a direct and proximate cause of Plaintiffs’ injuries and concluded:  “Plaintiffs’ allegations are sufficient to support that Bosch engaged in racketeering activity in violation of RICO, and that Plaintiffs suffered a concrete injury to their property ‘by reason’ of this activity.  The RICO claims against Bosch are well pled.”

Judge Breyer also rejected Volkswagen’s arguments that federal law preempted the state law claims against it for misrepresenting the virtues of its diesel cars and concealing the defeat devices.  While the Court ordered Plaintiffs to replead their misrepresentation claims with more particularity, Judge Breyer held that the omission-based claims would go forward as pled.

“Judge Breyer’s latest order is a resounding rejection of Volkswagen and Bosch’s attempt to unjustly escape compensating tens of thousands of former owners of VW and Audi cars for the harm caused by purposefully cheating on emissions,” said Steve W. Berman, the lead attorney representing car owners in the case.”

“We intend to hold Volkswagen and Bosch fully accountable for the harm their fraud and criminal enterprise caused all deceived VW buyers, even those who sold their cars before Volkswagen admitted its fraud.  Until and unless Volkswagen and Bosch agree to fair compensation for these victims of their fraud, we will vigorously pursue these RICO claims.”

Steve Berman is a leading consumer-rights attorney and co-founder of Hagens Berman. He was appointed to the plaintiffs’ steering committee in the nationwide consolidated class-action lawsuit against Volkswagen and is also pursuing claims on behalf of Volkswagen’s franchise dealers. Hagens Berman has filed multiple nationwide lawsuits against Bosch for its alleged participation in similar diesel emissions racketeering schemes with other carmakers, including Daimler (Mercedes), Fiat Chrysler, General Motors and Ford.

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About Hagens Berman
Hagens Berman Sobol Shapiro LLP is a consumer-rights class-action law firm with 10 offices across the country. The firm’s tenacious drive for plaintiffs’ rights has earned it numerous national accolades, awards and titles of “Most Feared Plaintiff’s Firm,” and MVPs and Trailblazers of class-action law. More about the law firm and its successes can be found at https://www.hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.

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10/11/18: CASE UPDATE

On October 3, 2018, U.S. District Judge Charles R. Breyer issued an order allowing the RICO and state law claims of consumers who sold their affected vehicles prior to the disclosure of the fraud to continue. The order upholds the claims of tens of thousands of prior owners of affected diesel vehicles that Bosch and Volkswagen participated in a conspiracy to create and implement an emissions cheating defeat device in nearly 600,000 cars sold in the United States. Plaintiffs allege the Dieselgate fraud harmed all purchasers of affected vehicles (whether or not they still owned the cars when the fraud was disclosed) because they: (1) paid a premium and/or financing fees for features that they never received; and (2) the premiums caused their vehicles to depreciate more than cars without the premium diesel features would have depreciated over the same period of ownership.  Judge Breyer agreed, finding that Plaintiffs had adequately alleged Article III standing to bring their claims. In his order, Breyer stated that the claims on behalf of prior owners were based on a “novel twist” and that plaintiffs “plausibly alleged that Bosch partnered with Volkswagen to implement the defeat device in the affected vehicles, and by doing so participated in the conduct of a years-long enterprise to defraud U.S. regulators and consumers.”  Judge Breyer rejected Bosch’s arguments that its actions were not a direct and proximate cause of Plaintiffs’ injuries and concluded:  “Plaintiffs’ allegations are sufficient to support that Bosch engaged in racketeering activity in violation of RICO, and that Plaintiffs suffered a concrete injury to their property ‘by reason’ of this activity.  The RICO claims against Bosch are well pled.” Judge Breyer also rejected Volkswagen’s arguments that federal law preempted the state law claims against it for misrepresenting the virtues of its diesel cars and concealing the defeat devices.  While the Court ordered Plaintiffs to replead their misrepresentation claims with more particularity, Judge Breyer held that the omission-based claims would go forward as pled.

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