The owner of three Illinois car dealerships is accusing Volkswagen of fraud for tampering with the emission devices in vehicles, and is filing a class action lawsuit against the automaker.
The lawsuit, which is the first one brought against the automaker by a car dealership, was filed Wednesday in a Chicago federal court by three dealerships in Florida and Illinois owned by Ed Napleton. He hopes to represent all VW dealerships in the U.S.
VW acknowledged in September it affixed so-called defeat devices in nearly 600,000 diesel vehicles, as well as several of their popular brands — vehicles such as Beetle and Porsche Cayenne — expressly to curb smog-producing nitrous oxide emissions.
The “defeat devices” switched on only during the carbon emission-testing phase, but kicked off when a vehicle was running a road test.
The scandal “caused great harm to franchise dealers like plaintiffs whose profits have been erased and whose dealerships have plummeted in value due to the inability to sell tens of thousands of affected vehicles,” according to the lawsuit.
“A car maker cannot use its immense power in the marketplace to subjugate and take advantage of much smaller franchise dealers,” the lawsuit continues. “In all their dealings, car makers must be honest, forthright, and transparent, and they cannot discriminate against some dealers in favor of others, or force dealers to use their own affiliates for related business.”
The German-based automaker is wallowing in fines, fees and litigation all across the world, including a $5.6 billion euro lawsuit in Europe, as well as one issued by the U.S. Department of Justice in January amounting to $46 billion.
Despite the legal claims by retirement funds, shareholders, and customers, the biggest victim of VW’s action are car dealerships, according to a statement from Steve Berman, Napleton’s attorney.
The device scandal came at an inopportune moment for Napleton, as he had purchased a VW dealership in Urban, Illinois, at a mountain peak price just prior to the admissions scandal being made public.
“Two weeks after VW admitted to regulators that it had installed illegal defeat devices in hundreds of thousands of U.S. cars, and three days before those admissions were made public, VW pushed through Ed Napleton’s purchase of a Volkswagen franchise in Urbana, Illinois, at top dollar, as if the dieselgate scandal was not about to toss the Volkswagen brand value off a proverbial cliff,’’ the plaintiffs said in the complaint.
The lawsuit is seeking appropriate compensation for the damages.
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