Law360: VW settles suspension defect class action for $57M

Posted on July 29, 2019

By Mike Curley

Law360 (July 29, 2019, 2:18 PM EDT) — Volkswagen will offer free tire rotations and reimbursement for previous rotations for certain vehicles as part of a $57 million settlement to end a proposed class action in Florida federal court that claimed the company knowingly sold cars with defective suspensions.

Volkswagen Group of America Inc. and the proposed class of car buyers on Friday asked U.S. District Judge Robert N. Scola Jr. to give preliminary approval to the settlement, which includes up to $7.7 million in attorney fees and expenses, plus $2,500 in incentive awards for each of the class representatives.

Class members who own 2009 to 2017 Volkswagen CC model vehicles are eligible for either free tire rotations or reimbursement of past tire replacements or rotations, according to the settlement. Vehicles with less than 110,000 miles on them will be eligible for up to two free tire rotations in any authorized dealership in the U.S. or Puerto Rico.

Class members with OE Continental ContiProContact Tires in sizes 235/45R17 and 235/40R18 are eligible for up to $209 and $254, respectively, to reimburse out-of-pocket expenses per tire if the tires had to be replaced within 35,000 miles of use. The provision also applies to tires with the same relevant specifications. Tires that had to be replaced because of outside damage, such as a puncture or laceration, do not qualify.

Finally, class members who paid out of pocket to have their tires rotated less than 9,000 miles after a previous tire rotation are eligible for up to $56 for each qualifying rotation.

According to the settlement, Volkswagen does not admit the validity of any of the proposed class’ claims or any wrongdoing, and the agreement releases the company from claims by the proposed class.

Francesco P. Trapani of Kreher & Trapani LLP, representing the proposed class, said they were very happy to reach the settlement and get good compensation for the consumers. Matthew P. Weinshall of Podhurst Orseck PA, also representing the class, added they look forward to pushing for a final approval.

“After two years of hard-fought litigation, we believe that the proposed settlement is a great result for the class,” Weinshall told Law360 on Monday. “It will make substantial benefits available to eligible class members — in the form of free tire rotations and reimbursements for tire replacements and tire rotations — that are tied to the alleged defect giving rise to the lawsuit.”

Consumers first brought the proposed class action against VW in August 2017 and filed an amended complaint in November 2017 that named 15 plaintiffs from 14 states who claimed to have owned or leased Volkswagen CC model cars made from 2009 to the present. They said the cars featured an allegedly defective suspension system that cannot be readjusted when the tires naturally creep out of alignment, causing the tires to quickly and unevenly wear down, an effect described as “cupping” or “feathering.”

Despite allegedly knowing about the problem, Volkswagen ignored it and told dealerships and repair shops to simply replace the vehicles’ tires, which quickly wore down again, the drivers claimed. They also claimed that VW actively concealed the faulty suspension systems, including intentionally misleading owners and not disclosing the defects in the owners’ manuals and warranty language.

Judge Scola trimmed the case against VW in September, dismissing 10 of the 29 counts against the automaker. He found that express warranty claims from plaintiffs in Ohio, Texas, Arizona and Virginia were filed outside of those states’ four-year statutes of limitations on breach of warranty claims. In December, Judge Scola also denied a bid to revive the express warranty claims in the suit.

An attorney for Volkswagen declined to comment.

The consumers are represented by Peter Prieto, Matthew P. Weinshall and Alissa Del Riego of Podhurst Orseck PA and Francesco P. Trapani of Kreher & Trapani.

Volkswagen is represented by Stanley H. Wakshlag of Kenny Nachwalter PA and Michael B. Gallub and Homer B. Ramsey of Herzfeld & Rubin PC.

The case is Wilson et al. v. Volkswagen Group of America Inc. et al., case number 1:17-cv-23033, in the U.S. District Court for the Southern District of Florida.

–Additional reporting by Reenat Sinay, Linda Chiem and Nathan Hale. Editing by Abbie Sarfo.

Update: This story has been updated with additional comment from attorneys for the proposed class.