VW Faces $3.57 Billion Lawsuit from Investors Worldwide

Volkswagen (VW) lawsuits are increasing in California, where they were consolidated last December in a multidistrict litigation. But the automaker’s problems don’t end in the United States. According to Money magazine, the company is facing an increasing number of lawsuits in its home country of Germany as well.

The last of about 70 lawsuits to be filed in Germany was brought by VW’s own investors, who seek 3.25 billion ($3.57 billion) euros for losses they claim they have suffered because of the company’s emissions scandal. Meanwhile, VW’s share price has fallen about a third since the news broke that VW had purposely installed so-called “cheating devices” on some of its diesel vehicles to beat emissions testing while maintaining fuel economy and performance.

Investors Claim VW Should Have Come Clean About Emissions Scandal

Investors from 14 countries—including the U.S., Germany, Australia, Canada, the Netherlands, and the U.K.—have joined together in this new VW lawsuit, seeking damages for economic losses caused by the automaker’s actions.

According to the legal firm that filed the case, VW failed to live up to its legal requirements to inform investors of problems with their diesel engines. “They should have told the markets that something was not working with their diesel technology,” Marc Shiefer, an attorney with the firm, told US News.

Apparently automakers are required by German law to inform investors when something happens that could affect share price—such as the emissions scandal. Revealing such information would have allowed the investors to make decisions about buying and selling that would have been to their benefit.

The company stated in March 2016 that it had made the proper disclosures required by law. VW added that it expected any issues related to the cheat devices would be manageable and would affect only a limited number of vehicles. It was only after the U.S. Environmental Protection Agency (EPA) stated that VW’s vehicles were in violation of the clean air act that the company realized the problem could be larger in scope.

Indeed, though evidence suggests the company was aware of the issue long before, VW admitted to having installed the cheat devices only after U.S. authorities made the scandal public. VW promised to recall and fix the vehicles. It has set aside about $7.5 billion to cover the costs, but so far the proposed plans for repairs have failed to gain U.S. approval.

Investors say that because VW refused to work with them on settlement negotiations, they had to file the lawsuit to try to recover damages.

CARB Admonishes VW for Denying the Truth

According to a press release issued in January 2016, the California Air Resources Board (CARB), rejected VW’s proposed recall plan for 2-liter diesel passenger vehicles sold in California between 2009 and 2015, stating that it contained gaps and lacked sufficient detail.

“Volkswagen made a decision to cheat on emissions tests and then tried to cover it up,” said CARB Chair Mary D. Nichols. “They continued and compounded the lie and when they were caught they tried to deny it. The result is thousands of tons of nitrogen oxide that have harmed the health of Californians. They need to make it right.”