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Attorneys press Oregon VW cases as carmaker proposes emission scandal settlement

TRIBUNE PHOTO: KEVIN HARDEN - Volkswagen of America plans for a legal settlement in its 'clean diesel' emissions scandal won't stop two local attorneys from pressing ahead with more than a dozen individual claims against the German automaker.Lake Oswego attorney Tim Quenelle is waiting for the legal dust to settle before he celebrates — if you can call it that — Tuesday’s announcement by Volkswagen of America of its proposed $10 billion settlement in the German automaker’s diesel-emission scandal.

“I am impressed with Volkswagen’s ability to fess up and try to bring peace to the valley as quickly as they did,” says Quenelle, co-counsel on more than three dozen state and federal lawsuits brought by VW owners across Oregon who purchased the affected diesel models. “They’ve certainly worked very hard under immense pressure to do what probably could be the fairest thing for just about everyone involved in this.”

That doesn’t mean all of Quenelle’s clients are going to jump into the VW class-action lawsuit pool and scoop up cash and other considerations in a settlement (which still must be approved by a judge). Far from it. Quenelle and co-counsel David Sugerman of Portland are pressing ahead with their 19 state lawsuits against Volkswagen of America Inc., and their 19 federal cases (which have been lumped into the federal case pending in California).

TIM QUENELLEAny acceptable class-action settlement, Quenelle says, “has to be in the middle of a bell-shaped curve.” But individual cases, like those he and Sugerman represent, can push for more money in damages based on each VW owners’ experiences and costs.

“There are variations in each case,” he says.

Most of the individual cases represented by Quenelle and Sugerman were filed by VW owners who claimed they were enticed by Volkswagen’s deceptive advertising to purchase the “clean diesel” cars. Claims vary, but most of the plaintiffs have asked the court to grant them the full value of their cars — some of which sold for more than $30,000 — and punitive damages.

There were nearly 30 individual and class-action cases pending against Volkswagen of America in Oregon’s U.S. District Court. Most of them were moved in mid-June to federal court in Northern California, where more than 100 cases have been filed since the emissions-defeating software scandal broke in September 2015.

Volkswagen officials have not commented on the individual lawsuits, but expressed regret last fall about the diesel engine software deception. Martin Winterkorn, Volkswagen AG chief executive officer, issued a statement on Sept. 20, 2015, saying he was “deeply sorry” for the deception and the company would work to retain customers’ trust.

“I personally am deeply sorry that we have broken the trust of our customers and the public,” according to Winterkorn’s statement. “The trust of our customers and the public is, and continues to be, our most important asset. We at Volkswagen will do everything that must be done in order to re-establish the trust that so many people have placed in us, and we will do everything necessary in order to reverse the damage this has caused.”

TRIBUNE PHOTO: PARIS ACHEN - Left to right, Oregon Attorney General Ellen Rosenblum and Gov. Kate Brown announce two settlements with Volkswagen over emissions fraud suits. The officials made the announcement Tuesday, June 28, at the World Trade Center Plaza in Portland.

State fund for emission reduction

The settlement proposal requires Volkswagen to pay more than $68.2 million into a trust to support diesel-emission reduction programs in Oregon and to make cash payments of $5,100 each to more than 13,000 Oregonians who purchased the VW diesel TDI vehicles. Volkswagen also has agreed to buy back or fix certain VW and Audi diesel vehicles. Other states will receive similarly funded emission reductions programs.

In a separate multistate settlement reached by Oregon Attorney General Ellen Rosenblum and 37 other attorneys general, Volkswagen has agreed to pay $570 million for violating state laws prohibiting unfair or deceptive trade practices. Oregon receives $17 million of that payment.

Oregon was among six states that led the investigation into the company’s deceptive trade practices, in part because Oregon has the highest per-capita ownership of the affected VW vehicles in the nation, Rosenblum said.

The attorneys general investigation confirmed that Volkswagen and Porsche sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States, concealing the existence of “defeat device” software installed in the vehicles. VW and Porsche misrepresented the cars as environmentally friendly and compliant with federal and state emissions standards, Rosenblum said. In fact, the vehicles emitted harmful amounts of nitrogen oxides, she said.

"Many Oregonians purchased these vehicles because VW advertised the cars as legitimate green vehicles, when in reality they were some of the dirtiest cars on the road," Rosenblum said.

Tuesday’s settlements resolve consumer claims raised by 38 states, the federal government and car owners in private class action suits.

Rosenblum and Gov. Kate Brown made the settlement announcements Tuesday morning at the World Trade Center in Portland.

Hearing on proposal in July

Officials with Volkswagen of America filed Tuesday, June 28, a proposal in federal court for the Northern District of California that includes a plan to buy back or modify engines on each of the affected 570,000 2.0-liter engine “clean diesel” vehicles sold or leased in the United States since 2009. About 11 million of VW’s “clean diesel” vehicles were sold worldwide.

Volkswagen’s troubles began in mid-September 2015, when researchers at West Virginia University working with the International Council on Clean Transportation discovered the software device that allowed VW “clean diesel” vehicles to defeat emissions tests across the nation. The device clicked on when emissions were being tested, and turned off after the tests, meaning vehicles spewed high levels of nitrogen oxide into the air at rates many times higher than allowed under U.S. Environmental Protection Agency rules.

On Sept. 18, 2015, EPA issued a notice of violation to VW. On Jan. 4, 2016, the U.S. Department of Justice sued Volkswagen for using the software trick to violate the clean air standards.

Volkswagen also faces legal action by the state of California, which has tough emissions standards for all vehicles.

The legal settlement could cost Volkswagen about $10 billion, most of which will be used to buy back diesel vehicles or install devices on the engines so the vehicles meet federal and state emission standards.

Volkswagen’s plans must be approved by the court and federal environmental officials. A hearing on the proposed settlement is planned July 26 in a San Francisco courtroom.

Paris Achen is a reporter with the Pamplin Media Group/EO Media Group Capital Bureau in Salem. Kevin Harden is a reporter for the Portland Tribune.