VW dieselgate lawyer to defend Fiat Chrysler

Michael Wayland
The Detroit News

A lead attorney involved in Volkswagen AG’s diesel emissions-cheating scandal and $14.7 billion settlement will defend Fiat Chrysler Automobiles NV against similar accusations.

New York-based attorney Robert Giuffra Jr., a partner of Sullivan & Cromwell, and two other attorneys on Tuesday submitted motions in federal court in San Francisco to appear as counsel for Fiat Chrysler to defend against a class-action lawsuit filed Dec. 1 in the U.S. District Court for the Northern District of California.

The suit accuses Fiat Chrysler of installing software made by Robert Bosch GmbH that masked excess exhaust emissions. The German-based auto supplier was behind the software tied to VW’s emissions scandal.

“The (companies) knowingly concealed the use of an emissions-cheating defeat device and illegally high emissions levels up to 10 times the legal limit in EcoDiesel vehicles, and sold them under false pretenses,” according to a release earlier this month from Hagens Berman Sobol Shapiro LLP, which filed the lawsuit.

The firm estimates that consumers paid premiums of up to $4,700 for vehicles that fail to meet federal emissions standards and are on the road illegally. The suit alleges defeat device affects 140,000 Ram 1500s and 9,000 Jeep Grand Cherokee models, selling at 3,000 per month.

Fiat Chrysler, in a statement Thursday, said the company “does not believe that these claims have merit,” and it “intends to contest this lawsuit vigorously.”

The company did not immediately have a comment on Giuffra, who is currently National Coordinating Counsel for Volkswagen in connection to its recent diesel emissions scandal, representing the company. Fiat Chrysler is a longstanding client of Sullivan & Cromwell.

Bosch on Thursday did not immediately respond for comment on the litigation.

The suit accuses Fiat Chrysler and Bosch of supporting and participating in a Racketeer Influenced and Corrupt Organizations (RICO) enterprise, and charges FCA with committing fraudulent concealment, false advertising and acting in violation of consumer-rights laws by selling vehicles equipped with an emissions system that during normal driving conditions emits many multiples of the allowed level of pollutants such as NOx (mono-nitrogen oxides). In order to appeal to environmentally conscious consumers, the lawsuit states that FCA erroneously “claims that ‘no NOx’ exits the tailpipe.”

According to the complaint, affected vehicles will "necessarily be worth less in the marketplace because of their decrease in performance and increased wear on their cars’ engines.

The lawsuit seeks reimbursement for a proposed nationwide class of consumers who purchased or leased the affected vehicles, as well as injunctive relief and equitable relief for FCA and Bosch’s misconduct related to the design, manufacture, marketing, sale and lease of affected vehicles.

Wolfsburg-based VW faces an industry-record $16.5 billion, and counting, in criminal and civil litigation fines after admitting last year that its diesel cars were outfitted with a “defeat device” that lowered emissions to legal levels only when it detected the vehicle was being tested.

Volkswagen has agreed to a settlement with U.S. regulators that calls for the company to spend about $10 billion to fix or buy back about 475,000 polluting 2.0-liter vehicles as a part of a $14.7 billion deal between regulators and the beleaguered German automakers. Under that agreement, Volkswagen will compensate owners who purchased the diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of the car.

The class-action lawsuit involving the diesel emissions allegations against Fiat Chrysler is unrelated to other litigation earlier this year involving a gear shifter on more than 1.1 million vehicles that may confuse drivers as well as investigations by federal officials into the automaker’s monthly sales reporting practices.


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Twitter: @MikeWayland