LEWISTON — Volkswagen is in big trouble. The world’s second largest automaker got caught selling more than 11 million vehicles worldwide with cheating emissions devices. The German company was forced to admit that it intentionally and purposely lied about how much their diesel cars pollute. Now, in every country where its diesels are sold, VW faces enormous fines and maybe even criminal charges.

But what if you’re one of the 11 million consumers worldwide who bought into the VW “clean diesel” myth? Unless you’re in America, you’re probably out of luck.

Soon, 475,000 Volkswagen diesel owners in the U.S. – including 3,600 Mainers – will face a decision. With much fanfare, on June 28, Volkswagen of America announced that it will spend over $10 billion to either fix or buy back every cheating vehicle sold in the United States. American VW owners get to decide which.

This announcement is a huge victory for American consumers – not just VW diesel owners, but also everyone who buys anything on good faith that the product was built with integrity. It is a victory thanks to American law allowing class action lawsuits.

What is a class action lawsuit? It is a lawsuit that brings together consumers who are affected by corporate fraud like Volkswagen’s but cannot afford to pursue a single claim by themselves.

We’ve all heard the negative stories about class actions, that lawyers get paid while affected consumers get little. Sometimes it’s true, particularly where the product involved costs very little, making an individual suit impractical. What you don’t often hear is that corporations fear class action lawsuits. Even the threat of a class action can shape corporate behavior for the better.

Volkswagen’s self-imposed predicament provides a great opportunity to see how class action lawsuits protect American consumers. You need only examine how European VW diesel owners will fare, compared with their American counterparts.

After VW’s class action settlement with American consumers was announced, Europeans reacted quickly, demanding equal treatment. The European Union’s industry commissioner, Elzbieta Bienkowska, told Reuters: “European consumers have been cheated in the same way as U.S. customers, so it is only fair to offer comparable compensation.”

In the face of demands that European VW owners be compensated like the Americans, VW’s chief executive officer, Matthias Müller, responded, unequivocally, “Nein.” The reason is obvious. EU consumers are not protected the way Americans are.

As explained by Karin Matussek, German legal affairs correspondent for Bloomberg News, “the lack of class action lawsuits is a major disadvantage for European consumers.” Unlike American law, in Europe there are few mechanisms to bundle consumer complaints together to give force to a legitimate grievance.

The EU’s lack of American-style class action laws is why European VW diesel owners are out of luck. “U.S. legal principles are very different from ours,” Laurent Mercie, a French lawyer who has filed individual civil claims against VW, told Bloomberg’s Matussek. “There’s a natural tendency to want to transpose what happens there to here. Unfortunately, it’s not possible.” Thus, he says, European consumers cheated by corporate malfeasance must go it alone.

VW CEO Müller knows that an unhappy VW diesel owner in Europe, forced to accept a recall and modification that will reduce fuel economy and vehicle performance, has no recourse other than an individual lawsuit. Would you want to take on the world’s second largest automaker in court, alone?

Volkswagen’s proposed settlement is in a public comment period. It is expected to be finalized by October. Then, Maine’s 3,600 VW diesel owners will have a choice. Sell the vehicle back to VW for a premium price? Or keep the vehicle and allow VW to modify it, at VW’s expense, and be paid by VW for the inconvenience?

There are details to worked out. For example: How much is the buyback? What will the “fix” entail? How will it be warrantied? But European VW owners would love to have that choice to make.

So VW’s predicament reflects a victory for American consumers. Worldwide, VW advertised itself as the smartest kids on the block, accomplishing what no other carmaker could do – put high-performance clean diesels in an entire line of cars. Americans, including 3,600 Mainers, bought them in droves, but it was a sham. Thanks to American class action law, Maine consumers will not remain victims of this deliberate corporate fraud.

 

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