Volkswagen cheatd on diesel emissions, faces $ 18 billion fine

[Ideologue]

This is an unusual case - in most cases, recalls and the like are for products that will harm the consumer, not for products which, because of an intentional defect, the consumer will harm others (via the environment). Why should the consumer (who is presumably, en mass at least, a self-interested beast  ) bring their car in for "fixing"?

To avoid beatings by the EPA's enforcement arm.  Well, ideally.

[Malthus]

This is an unusual case - in most cases, recalls and the like are for products that will harm the consumer, not for products which, because of an intentional defect, the consumer will harm others (via the environment). Why should the consumer (who is presumably, en mass at least, a self-interested beast  ) bring their car in for "fixing"?

To avoid beatings by the EPA's enforcement arm.  Well, ideally.

Ah, you have the heart of a regulator. In the nicest possible way. 




Edit: I have the heart of a regulator, too.

I keep it in a jar of alcohol on my desk to remind me of past victories. 

[Syt]

If you guys own WVs you've been ripped off by the care salesman. Did he also sell MBWs?

The dealership I got mine from also sells Audis. 

Then I guess they sold VWs not WVs.

[Eddie Teach]

Ah, you have the heart of a regulator. In the nicest possible way. 

But is he handy with the steel, or just a geek off the street?

[lustindarkness]

Only VW I would like to own would be a 1963 to 1966 Beetle.

[Zanza]

I would like to have a well renovated T1 or T2,  that's the hippie bus.

[lustindarkness]

Yeah, I could deal with a good T1 splitwindow.

[garbon]

This is an unusual case - in most cases, recalls and the like are for products that will harm the consumer, not for products which, because of an intentional defect, the consumer will harm others (via the environment). Why should the consumer (who is presumably, en mass at least, a self-interested beast  ) bring their car in for "fixing"?

To avoid beatings by the EPA's enforcement arm.  Well, ideally.

Ah, you have the heart of a regulator. In the nicest possible way. 




Edit: I have the heart of a regulator, too.

I keep it in a jar of alcohol on my desk to remind me of past victories. 

Having a heart? Pfft. Weaklings.

[grumbler]

This is an unusual case - in most cases, recalls and the like are for products that will harm the consumer, not for products which, because of an intentional defect, the consumer will harm others (via the environment). Why should the consumer (who is presumably, en mass at least, a self-interested beast  ) bring their car in for "fixing"?

I suspect the answer will be "to collect the class action pay-out". That is, as class action settlements must be approved by the courts, who tend to at least attempt to take the moral high road (as do plaintiff side class action counsel - at least, in paying lip service  ), no doubt it will be a condition of any settlement that each car owner "patch" his or her car, to get their mitts on the settlement money.

I think that this is likely true.

[crazy canuck]

Maybe but unlikely.  It would be very unusual for a Court to impose a positive obligation on a Plaintiff. The normal course is simply to award damages.

A much more likely outcome is that the defence will argue that the plaintiff class can mitigate their damage by taking advantage of the recall and the court will reduce damages accordingly.  Plaintiffs in the class will then have an economic incentive to get the work done.  Also this avoids the administrative burden of keeping track of who has had the work done.

[Malthus]

Maybe but unlikely.  It would be very unusual for a Court to impose a positive obligation on a Plaintiff. The normal course is simply to award damages.

A much more likely outcome is that the defence will argue that the plaintiff class can mitigate their damage by taking advantage of the recall and the court will reduce damages accordingly.  Plaintiffs in the class will then have an economic incentive to get the work done.  Also this avoids the administrative burden of keeping track of who has had the work done.

The problem is that this recall exacerbates  their damages - it doesn't mitigate them.

The argument would be "with this recall patch, the engine will obtain less performance and/or less fuel efficiency that it does, if it is allowed to pollute freely (as the manufacturer intended)".

Thus, if the "damages" are "the difference between how the engine performes with the recall software patch, and how it performed before", then part of the proof of claim for each claimant would be presenting proof that the recall software was installed.

It wouldn't be a "positve obligation", but rather, a "necessary evidentiary element to making a claim". 

[crazy canuck]

Maybe but unlikely.  It would be very unusual for a Court to impose a positive obligation on a Plaintiff. The normal course is simply to award damages.

A much more likely outcome is that the defence will argue that the plaintiff class can mitigate their damage by taking advantage of the recall and the court will reduce damages accordingly.  Plaintiffs in the class will then have an economic incentive to get the work done.  Also this avoids the administrative burden of keeping track of who has had the work done.

The problem is that this recall exacerbates  their damages - it doesn't mitigate them.

The argument would be "with this recall patch, the engine will obtain less performance and/or less fuel efficiency that it does, if it is allowed to pollute freely (as the manufacturer intended)".

Thus, if the "damages" are "the difference between how the engine performes with the recall software patch, and how it performed before", then part of the proof of claim for each claimant would be presenting proof that the recall software was installed.

It wouldn't be a "positve obligation", but rather, a "necessary evidentiary element to making a claim".

There are number of problems with this analysis.

First, and most fundamentally, a court order needs to be final.  Not contingent.  Courts award damages based on the evidence before them.  Not evidence after the fact that someone might be entitled to X amount of money if they can prove that they have done Y.  In other words the "necessary evidentiary element to making a claim" needs to be established at trial not after.  It is possible to set up a court ordered adjudication process after the fact.  As was done in the residential school class action settlement.  But that is very rare.

Second, if there is a settlement here (which is likely) the class is not likely to want the cost of invigilating the scheme you have proposed to cut into the award of the damages they might get.  It is much more likely they would rather see the money which would otherwise be attributed to that cost to be paid in aggravated or punitive damages directly to them.  Plaintiffs counsel will also have an interest in structuring it this way since there fees are a percentage of the damages awarded not the cost of administering the award.

Third, the main heads of damage pled are damages for false advertising related to the emissions claim.  The recall is intended to fix that problem and so that head of damage can be mitigated to some extent.  Admittedly there will not be full mitigation and of course that is why the damages will be extensive as a class.  But they also wont be getting 100 cents on the dollar either.

[KRonn]

I haven't read all of this to get the latest but what a colossal scandal and mess VW made! It would be almost comical if not so expensive and serious. They used a software cheat to trick emissions tests to pass the car at inspections. They can change/remove that software cheat but then the car can't pass inspections, so that tells me the fixes would be very costly for each car, and it involves millions of cars around the world. This is a mess for owners but so, so bad for VW. Ah well, now that Gitmo is being emptied out there's more room there for these auto terrorists.   

[Malthus]

Maybe but unlikely.  It would be very unusual for a Court to impose a positive obligation on a Plaintiff. The normal course is simply to award damages.

A much more likely outcome is that the defence will argue that the plaintiff class can mitigate their damage by taking advantage of the recall and the court will reduce damages accordingly.  Plaintiffs in the class will then have an economic incentive to get the work done.  Also this avoids the administrative burden of keeping track of who has had the work done.

The problem is that this recall exacerbates  their damages - it doesn't mitigate them.

The argument would be "with this recall patch, the engine will obtain less performance and/or less fuel efficiency that it does, if it is allowed to pollute freely (as the manufacturer intended)".

Thus, if the "damages" are "the difference between how the engine performes with the recall software patch, and how it performed before", then part of the proof of claim for each claimant would be presenting proof that the recall software was installed.

It wouldn't be a "positve obligation", but rather, a "necessary evidentiary element to making a claim".

There are number of problems with this analysis.

First, and most fundamentally, a court order needs to be final.  Not contingent.  Courts award damages based on the evidence before them.  Not evidence after the fact that someone might be entitled to X amount of money if they can prove that they have done Y.  In other words the "necessary evidentiary element to making a claim" needs to be established at trial not after.  It is possible to set up a court ordered adjudication process after the fact.  As was done in the residential school class action settlement.  But that is very rare.

Second, if there is a settlement here (which is likely) the class is not likely to want the cost of invigilating the scheme you have proposed to cut into the award of the damages they might get.  It is much more likely they would rather see the money which would otherwise be attributed to that cost to be paid in aggravated or punitive damages directly to them.  Plaintiffs counsel will also have an interest in structuring it this way since there fees are a percentage of the damages awarded not the cost of administering the award.

Third, the main heads of damage pled are damages for false advertising related to the emissions claim.  The recall is intended to fix that problem and so that head of damage can be mitigated to some extent.  Admittedly there will not be full mitigation and of course that is why the damages will be extensive as a class.  But they also wont be getting 100 cents on the dollar either.

I disagree - the major element of the damages will not stem simply from the emissions, but from the reduction to the performance of the engine after it is patched. Just how does the fact that the cars are polluting cause damage to the car owners? Those damages are to the environment at large. They are not specfic to car owners. The fact that the car owners are inadvertant polluters isn't a major source of quantifiable damages. 

The cost of invigilating the sceme would be borne, as a seperate head, by the company, not cut out of the global award. Class action judges have plenty of discretion to craft an award (or, far more likey, to approve a settlement) on terms that are just. 

As for "the necessary part of the claim must be established at trial", I don't agree - people have to prove that they are members of the class (or sub-class) to obtain relief. In this case, there would presumably be a class (or sub-class) of persons who had their engines patched with the software. If you want to be a member of this class/subclass, and so be entitled to the award of damages suitable to this class or subclass, you have to have your engine patched. Those without patched engines would be a seperate class/subclass, entitled to lesser damages - thus incentivizing obtaining the patch.

[crazy canuck]

I disagree - the major element of the damages will not stem simply from the emissions, but from the reduction to the performance of the engine after it is patched. Just how does the fact that the cars are polluting cause damage to the car owners? Those damages are to the environment at large. They are not specfic to car owners. The fact that the car owners are inadvertant polluters isn't a major source of quantifiable damages. 

The cost of invigilating the sceme would be borne, as a seperate head, by the company, not cut out of the global award. Class action judges have plenty of discretion to craft an award (or, far more likey, to approve a settlement) on terms that are just. 

As for "the necessary part of the claim must be established at trial", I don't agree - people have to prove that they are members of the class (or sub-class) to obtain relief. In this case, there would presumably be a class (or sub-class) of persons who had their engines patched with the software. If you want to be a member of this class/subclass, and so be entitled to the award of damages suitable to this class or subclass, you have to have your engine patched. Those without patched engines would be a seperate class/subclass, entitled to lesser damages - thus incentivizing obtaining the patch.
[/quote]

The cause of action is that the damage is caused by the false advertising regarding the emissions.  If, as you seem to claim, there is no damage which results from a car that pollutes more then there is no cause of action and the company need not recall the vehicles at all.  In relation to the second point typically all a class member need to is establish they are a member of a the class.

But your last point makes more sense.  If there is another class proposed containing only those who have gotten the fix (which I dont think there is at this point) then that would provide an incentive for owners to take advantage of the recall in order to be part of the class.  But classes are normally set as at the time the court pronounces the order or the settlement is made.  Not after so as to avoid contingent awards.