Tuesday, June 28, 2016

Volkswagen Proposed Class Settlement for $14.7 Billion

The parties litigating over Volkswagen's emissions defeat device have submitted a proposed class action settlement to Judge Breyer for his approval.  After the parties confer with him on June 30, he'll hear arguments over whether to approve that settlement on July 26.

The proposed settlement is available here: Download 1. The settlement money available to class members is a fund of $10,033,000,000, which is based on an assumed 100% buyback of all eligible vehicles and leased eligible vehicles.

If approved, parties who wish to object or opt out must do so before September 16, 2016 (p. 27 describes the opt-out process, which will have to be approved in conjunction with the notice to class members, and p. 28 describes the objection process).  Class members must likewise complete and submit a valid claim form before September 1, 2018, and decide on their chosen remedy by December 30, 2018. Put differently, class members will need to take affirmative action to receive relief.  Failing to submit a claim or to opt out means that their claims will be extinguished under the settlement (and through general res judicata principles). 

The proposal provides VW owners with several options.  They can:

  • sell their car back to VW for the "vehicle value" (a term of art defined in the settlement on p. 16);
  • receive restitution payments calculated based on a percentage of the vehicle value (some owners are eligible for loan forgiveness up to 30% of the vehicle value and owner restitution payment) - an estimate of those settlement payments is available here -  Download 7
  • terminate their car leases with no early termination penalty;
  • modify their vehicle, which should help fix the emissions problems based on the different vehicles; 
  • or may receive both a restitution payment and a vehicle modification.

An overview of the options available to class members and proposed allocation plan is available here:  Download 2

And the proposed short form notice, which is refreshingly straightforward is available for download here:  Download 3.  The longer notice is here:  Download 4. And detailed information on the proposed 5-step claims program and administration is available here:  Download 5. 

http://lawprofessors.typepad.com/mass_tort_litigation/2016/06/volkswagen-proposed-class-settlement-for-147-billion.html

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