Volkswagen Sued By US Dealerships' Owner Over Diesel Emissions Scandal

The owner of three Volkswagen franchise dealerships, two in Illinois and one in Florida, filed a case Wednesday against the automaker over losses the dealerships suffered due to diesel emissions scandal in which the German company is embroiled. The lawsuit, filed in the United States District Court for the Northern District of Illinois, also seeks to become a class action suit, representing all Volkswagen franchise dealers in the U.S.

The lawsuit was filed by the three Volkswagen dealerships owned by the family of Ed Napleton, which runs an 85-year-old business operating 56 franchise dealerships of various automakers in 30 different locations across Florida, Georgia, Illinois, Missouri and Pennsylvania.

While some independent dealers have already filed lawsuits against the German company, this is the first lawsuit brought on by a Volkswagen dealer over the automaker’s use of software in about 600,000 diesel cars that allowed the vehicles to cheat in emissions tests.

The complaint also accuses Volkswagen of imposing “unlevel allocation and pricing” on its dealers.

The lawsuit alleges that due to “Volkswagen’s monumental fraud” — which it also calls “one of the most significant environmental crimes in history” — its “dealers have been harmed in their business in the form of reduced sales, lost profits, cars sitting on their lots which cannot be sold, and investments in dealerships that are worth substantially less than their purchase, investment, and carrying costs.”

Apart from the German automaker and its U.S. subsidiary, the lawsuit also names Robert Bosch — another German company that supplied Volkswagen with the “cheating device” — and its U.S. business as defendants.

The complaint also asks for a jury trial and an unspecified amount in damages, to be determined during the course of the trial.

At a dealer conference in Las Vegas over the weekend, Volkswagen had reached something of a compromise with dealers. After meeting company executives, dealers had nominated five franchise owners to work with Volkswagen to work out a compensation mechanism for the dealers, according to the New York Times.