VW Face First Major German Corporate Suit In Emissions Scandal

Volkswagen faces its first major corporate suit in Europe over claims that it made to convince a firm to lease 500 diesels.

Just as Volkswagen’s diesel emissions troubles are beginning to wind up in the U.S., they are boiling over in Germany. Not only are prosecutors probing Martin Winterkorn’s involvement in the diesel scam conspiracy, but the automaker faces its first suit from a major corporate partner. As legal action against VW winds down in the U.S., it is heating up further in Germany.

Deutsche See, a fish distributor, has sued VW for misrepresentation. The company indicated in its filing that representatives of the automaker said the diesels Deutsche See leased were environmentally friendly. Apparently, on the strength of that recommendation, Deutsche See rented 500 vehicles from VW.

Hundreds Of Suits File

The latest suit comes amid the hundreds of lawsuits already filed by owners, regulators, states and dealers. Many of the suits are similar to class-action legal actions used in the U.S. The difference is implementation. In the United States, courts can bundle similar lawsuits into one suit that stands for many others. In Germany, each suit goes through its process individually. Ultimately, a court may hear what may be hundreds of lawsuits. There is one similarity with class-action suits. In Germany, one suit can act as a template for others so that 150 individual suits become 150 cloned actions so that the suits can be moved more quickly through the German court system.

Deutsche See has been in a round of frustrating talks with the automaker that has not been particularly fruitful. They have not been able to find an out-of-court agreement as the talks broke down once VW changed its negotiation team. A team of managers had been working with Deutsche See to reach a conclusion. However, the automaker replaced its team, using lawyers and public relations people instead of managers.

The German tabloid Bild am Sonntag reported Sunday that the Deutsche See was seeking $12.8 million (11.9 million euros). Deutsche See was unavailable for comment on the amount. In an earlier statement, the company said that it “only went into partnership with VW because VW promised [its diesels were] the most environmentally friendly, sustainable mobility concept.” In 2010, the prize-winning company won a sustainability award.

Volkswagen said it had not seen the paperwork and would not comment. Deutsche See filed a complaint about malicious deception in a regional court in Brunswick, near Wolfsburg, Volkswagen’s headquarters. Because the court was not open, it was unavailable for comment.

Heat Turned Up On VW

Deutsche See’s action turns up the heat in Europe for Volkswagen. An admitted emissions cheat – September 2015 – the ongoing controversy, called Dieselgate in the U.S., has already cost the carmaker $21.6 billion. VW also recently settled cases with the Justice Department and Federal Trade Commission. The fines and penalties for those cases are $4.3 billion. The latest U.S. settlement means the automaker tallies up its costs in the U.S., the emissions scandal will have cost VW more than $25 billion. German costs are still unknown.

Sources: Automotive News, Reuters