By Amanda Bronstad, From The National Law Journal

Volkswagen A.G.’s legal problems jumped into overdrive this week. More than 175 class actions in 32 states have been filed over the emissions scandal that erupted last month.

Almost all the lawsuits have been brought on behalf of consumers alleging they were duped into paying premium prices for “clean diesel” vehicles that exceeded U.S. regulatory standards. Others have been filed by dealership franchises. The cases are in addition to investigations by the U.S. Justice Department, the U.S. Environmental Protection Agency and attorneys general in at least 28 states.

Unlike previous mass torts over automobile defects, no deaths or injuries have been tied to the scandal. But plaintiffs lawyers, flooded with calls from irate car owners, have raced to the courthouse claiming Volkswagen misled consumers about its diesel vehicles.

“There’s chum in the water,” said David Vendler, a partner at Morris Polich & Purdy in Los Angeles, who on Sept. 23 was the first lawyer to move to coordinate all the litigation. “All the sharks are swimming.”

On Sept. 18, the U.S. Environmental Protection Agency notified Volkswagen that certain of its diesel cars made since 2009 had a “defeat device” in them designed to cheat emissions tests in violation of the Clean Air Act. The device was in 11 million vehicles worldwide, including 482,000 in the United States, which the EPA has said emitted as much as 40 times the standard for nitrogen oxides.

Volkswagen chief executive officer Martin Winterkorn has stepped down, and German officials have launched a criminal investigation. Volkswagen also has initiated an external investigation to be led by Jones Day.

Many of the class actions are seeking reimbursement for the premium prices they paid, but others want much more than that.

“Even if you give them a fix that is only to meet EPA regulations, they still didn’t get the fuel efficiency they wanted,” said Frank Pitre of Cotchett, Pitre & McCarthy in Burlingame, California. “Those folks might say: ‘I want my money back.’ ”

Cody Guarnieri of Brown Paindiris & Scott in Hartford, who filed the first class action in Connecticut federal court against Volkswagen, requests injunctive relief in the form of a recall or a free replacement program.

“They can’t be continued to be driven in the long term,” Guarnieri said of the affected cars.

Plaintiffs lawyers swiftly moved to coordinate all the consumer class actions before a single judge. The U.S. Judicial Panel on Multidistrict Litigation, which decides whether to coordinate the litigation, is unlikely to hear those arguments until its Dec. 3 hearing in New Orleans. So far, lawyers have supported districts in six states.

One favorite venue is the Eastern District of Virginia, where Volkswagen’s U.S. headquarters is based in Herndon. Volkswagen Group of America Inc. has been named in nearly all the suits, and subsidiary Audi A.G., whose U.S. division is also based in Herndon, has been named in a few cases.

“We think that there’s certainly going to be witnesses and evidence centered in that district,” said Warren Burns, a partner at Burns Charest in Dallas. “It’s been my experience in cases of this size and complexity that invariably you’ll be drawn by the decision-makers, and those folks are in the headquarters.”

The district also is close to Washington, where the Justice Department’s civil investigation could end up coordinating with the civil suits, he said.

“The Department of Justice is working closely with the EPA in the investigation into these allegations,” DOJ spokesman Wyn Hornbuckle wrote in an email. “We take these allegations, and their potential implications for public health and air pollution in the United States, very seriously.”

Volkswagen is expected to file its own motion on coordination by Oct. 20. A U.S. spokeswoman for Volkswagen declined to comment about the litigation.

Other lawyers have pushed for New Jersey. Diane Sammons of Nagel Rice in Roseland, New Jersey, said the state was ideal because Volkswagen is incorporated in that state. In addition, the automaker maintains its Eastern U.S. regional office, test-vehicle fleet, parts distribution center, technical center and products liaison group in New Jersey.

But there’s also California. In addition to the California Air Resources Board, which assisted the EPA in uncovering the scandal, two electronics research laboratories in the San Francisco Bay Area were involved in recent testing of renewable fuels in Volkswagen’s diesel cars.

“We think there’s a gold mine of information here in Belmont about how bad these vehicles were performing and, what’s worse, continuing to tout these vehicles were performing very well and even better with renewable fuels,” Pitre said.

One lawyer has sued both of the research labs—South San Francisco-based Solazyme Inc. and Emeryville-based Amyris Inc.—in Santa Barbara County Superior Court.

“We have California defendants that we believe knew or should have known about the fact that the emissions were rigged,” said A. Barry Cappello, managing partner of Cappello & Noël in Santa Barbara.

The case is one of at least four in state courts. On Sept. 29, Harris County, Texas, sued Volkswagen and Audi in Harris County District Court for violating state environmental laws. The county, home to 6,000 of the recalled vehicles, is seeking $100 million in civil penalties.

Two lawsuits were filed in Charleston County Court of Common Pleas under the South Carolina Manufacturers, Distributors and Dealers Act on behalf of all Volkswagen customers in the state. Both suits name Volkswagen and an individual franchise dealership in South Carolina.

Under the act, individuals can sue “for the benefit of the whole” and get double their actual damages, or triple if a jury finds the defendants acted maliciously, said Badge Humphries, a partner at Lewis, Babcock & Griffin in Columbia, South Carolina.

“South Carolina will be better treated by having their claims litigated in state court pursuant to state law, sent to a state court judge who’s trained in administering South Carolina law,” he said.

IMAGE: Volkswagen diesels are shown on a storage lot near a VW dealership Wednesday, Sept. 23, 2015, in Salt Lake City. Photo: Rick Bowmer/AP

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