By Amanda Bronstad, From The National Law Journal

Add Volkswagen’s own franchise dealerships to the list of parties suing the automaker over its emissions scandal.
The case, filed on Wednesday on behalf of a nationwide class of Volkswagen franchise dealerships, is in addition to more than 500 class actions filed on behalf of consumers, used car dealerships and competing dealerships.
The VW dealership suit, filed in Chicago federal court, opens another chapter in so-called Dieselgate, which involves the automaker’s “defeat device” designed to cheat emissions tests. Volkswagen has admitted that about 600,000 cars in the United States were installed with device, and the U.S. Environmental Protection Agency has said the cars emit as much as 40 times the standard for nitrogen oxides
The emissions scandal has “caused great harm to franchise dealers like plaintiffs whose profits have been erased and whose dealerships have plummeted in value,” Steve Berman, managing partner of Seattle’s Hagens Berman Sobol Shapiro, wrote in the suit.
In an email, spokeswoman Jeanine Ginivan wrote that Volkswagen was “committed to resolving the U.S. regulatory investigation into the diesel emissions matter as quickly as possible and to implementing a solution for affected vehicles.”
Multidistrict litigation over the emissions scandal has been coordinated in San Francisco before U.S. District Judge Charles Breyer, who has given Volkswagen and federal regulators until April 21 to come up with a plan to fix the cars. But Berman said the franchise case should proceed separately as “Volkswagen has differing obligations, under law and under contract.”
The lawsuit comes as Volkswagen dealers have grown increasingly frustrated over plummeting sales and devalued diesel cars on their lots. On April 2, senior Volkswagen executives attempted to reassure hundreds of dealers at the National Automobile Dealers Association’s annual convention in Las Vegas.
But not all of Volkswagen’s 600 franchise dealers are “willing to wait indefinitely” for Volkswagen to come up with a fix or reimburse them, Berman wrote in an email. The new case, filed by three franchise dealerships owned by Ed Napleton, alleges that Volkswagen has put some dealers ahead of others, such as “unfair and illegal pricing” favoring dealers that used an affiliated financing company, VW Credit Inc. Napleton cited his purchase of a VW franchise in Urbana, Illinois, that Volkswagen pushed last year despite knowing of the emissions problem since 2014.
“Mr. Napleton feels that this lawsuit is the only way that VW would take his concerns, and the concerns of all dealers, seriously enough to actually propose a solution,” Berman said. “We believe that as the scandal drags on with no solution in sight, a great many will join the effort to make VW do something about it.”
The case brings claims under the federal Automobile Dealers’ Day in Court Act and the U.S. Racketeer Influenced and Corrupt Organizations Act, alleging that Volkswagen and Robert Bosch, which supplied the defeat device, conspired to commit fraud.

IMSGE: Credit: RiverNorthPhotography/iStockphoto.com

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