Total Restitution To Indiana Customers Could Reach $66 Million

INDIANAPOLIS, Ind. – Indiana Attorney General Greg Zoeller today announced that an estimated 6,638 Volkswagen customers in Indiana will be eligible for monetary compensation and the option to have their vehicles bought back or modified to reduce emissions, as part of a joint state and federal agreement reached with the company over allegations of emissions fraud in its diesel engine vehicles.

In total, restitution to Indiana customers could reach $66 million.

This agreement is part of a series of state and federal settlements that will provide cash payments to affected consumers, require Volkswagen to buy back or modify certain VW and Audi 2.0-liter diesel vehicles, and prohibit Volkswagen from engaging in future unfair or deceptive acts and practices in its dealings with consumers and regulators.

The agreement also requires Volkswagen to pay almost $570 million for violating states’ law prohibiting unfair or deceptive trade practices when it marketed, sold and leased diesel vehicles equipped with “defeat device” software. This illegal and undisclosed software was intended to circumvent air pollution emissions standards.

“Volkswagen deceived customers by misrepresenting its diesel vehicles’ emissions and advertising its cars as meeting ‘green’ and ‘environmentally friendly’ standards,” Zoeller said. “People paid a premium for a benefit they simply did not receive. In our efforts to protect consumers, attorneys general have ensured Volkswagen will pay for its misrepresentations and compensate its customers to right this wrong.”

Today’s coordinated settlements resolve consumer protection claims raised against Volkswagen by a multistate coalition of 37 state attorneys general, the United States Environmental Protection Agency (EPA), the Department of Justice (DOJ), the Federal Trade Commission (FTC) and car owners in private class action lawsuits.

The attorneys generals’ investigation confirmed that Volkswagen sold more than 570,000 2.0- and 3.0-liter diesel vehicles in the United States equipped with “defeat device” software and actively concealed the existence of the defeat device from regulators and the public. Volkswagen made false statements to consumers in their marketing and advertising, misrepresenting the cars as being environmentally friendly or “green” and that the cars were compliant with federal and state emissions standards, when in fact Volkswagen knew the vehicles emitted harmful oxides of nitrogen (NOx) at rates many times higher than the law permitted.

Under the settlements, Volkswagen is required to implement a restitution and recall program for more than 475,000 owners and lessees of 2.0-liter diesel vehicles, of the model year 2009 through 2015 listed in the chart below, at a maximum cost of just over $10 billion. This includes 6,638 vehicles in Indiana.

Once the consumer program is approved by the court, affected Volkswagen owners will receive a restitution payment of at least $5,100 and a choice between:

• A buy back of the vehicle (based on pre-scandal NADA value); or
• A modification to reduce NOx emissions provided that Volkswagen can develop a modification acceptable to regulators. Owners will still be eligible to choose a buyback in the event regulators do not approve a pollution-control fix. Owners who choose the modification option would also receive an Extended Emission Warranty; and a Lemon Law-type remedy to protect against the possibility that the modification causes subsequent problems.

Based on 6,638 total eligible Indiana vehicles, Indiana consumer restitution will total between $34 million and $66 million, depending on the value of the respective vehicles. VW will pay this amount in addition to any buyback payments it makes to consumers.

The consumer program also provides benefits and restitution for lessees (restitution and a no-penalty lease termination option) and for consumers who sold their vehicles after September 18, 2015 when the emissions-cheating scandal was disclosed (50 percent of the restitution available to consumers who still own their vehicle).

Volkswagen will contact customers who are eligible for these settlement offerings by mail.

The consumer restitution and recall program only covers the 2.0 models at this time. Litigation over the 3.0 models will continue, and the settlement website and the Attorney General’s Office will provide updates going forward regarding remedies available to 3.0 owners.

Additional components of today’s settlements include:

• Environmental Mitigation Fund: Volkswagen will pay $2.7 billion into a trust to support environmental programs throughout the country to reduce emissions of NOx. This fund, also subject to court approval, is intended to mitigate the total, lifetime excess NOx emissions from the 2.0-liter diesel vehicles identified below. Under the terms of the mitigation trust, Indiana is eligible to receive $38,920,039 to fund mitigation projects.
• Additional Payment to the States: In addition to consumer restitution, Volkswagen will pay to the states more than $1,000 per car for repeated violations of state consumer protection laws, amounting to $520 million nationwide.  This amount includes $6,571,620 paid for affected vehicles Volkswagen sold and leased in Indiana.
• Zero Emission Vehicles: Volkswagen has committed to investing $2 billion over the next 10 years for the development of non-polluting cars, or Zero Emission Vehicles (ZEV), and supporting infrastructure.

Volkswagen will also pay $20 million to the states for their costs in investigating this matter and to establish a fund that state attorneys general can utilize for future training and initiatives, including investigations concerning emissions violations, automobile compliance, and consumer protection.

The full details of the consumer program will be available online at www.vwcourtsettlement.com and www.ftc.gov/VWSettlement.

Zoeller thanked Deputy Attorney General Mark Snodgrass for his work on this case.

Below is a list of VW models eligible for the restitution and recall program:

Scott Roberts for www.theindianalawyer.com

The Indiana Court of Appeals ruled a medical malpractice lawsuit filed by minor children can continue after it found the suit was not untimely filed. The children were in the correct age range to trigger an exception in the Medical Malpractice Act.

Traci Leach died from lung cancer after a radiologist failed to diagnose a tumor on a CT scan. Multiple medical malpractice suits followed, but the hospital the doctor worked for was granted summary judgment in all but the children’s cases because they were untimely filed. Leach had three children with Kenneth Lockridge, Lily Lockridge, Rose Lockridge and Kenneth Lockridge Jr., and two other children from another relationship. The Lockridges and the two other children filed separate suits.

The Lockridges did not have their case dismissed because they were under six years old at the time of the alleged negligence and under eight years old before they field suit, which is allowed by the Medical Malpractice Act. The hospital filed an interlocutory appeal.

The CT scan was performed July 6, 2011, and this is the date when the alleged negligence occurred. The parties in the case didn’t file their complaint until Aug. 27, 2014, and according to the Medical Malpractice Act, lawsuits must be filed within two years of the malpractice taking place. The judges decided the trigger date is Aug. 30, 2012, when Traci learned she had cancer.

The COA held the children’s suit can take place because of the MMA exception on minor children. Judge John Baker wrote the Act does not qualify whether suits filed by minor children have to be injured by alleged negligence or can be a non-injured party bringing a derivative claim, and therefore both are acceptable under the Act.

“Our legislature could have drafted the definition of patients to exclude derivative claimants, but it elected not to do so. We are bound by the language it selected, which clearly includes derivative claimants as patients,” Baker wrote.

He also wrote that just because the rest of the suit was denied doesn’t mean the children’s suit can continue because to rule otherwise would “make an end-run around the purposes of the MMA.”

The case is Anonymous M.D. and Anonymous Hospital v. Kenneth Lockridge, on behalf of Lily Lockridge, Rose Lockridge, and Kenneth Lockridge, Jr., Minors, 39A01-1509-CT-149