A Bailout for Volkswagen? Congress Wants to Do Something Absolutely Crazy

The Fiscal Times
Monday, January 4, 2016

When Volkswagen admitted to cheating on air pollution standards tests in September, it opened itself up not only to government punishment, but lawsuits from 500,000 U.S. purchasers of its “clean” diesel vehicles. Volkswagen has yet to fix the vehicles to bring them into emissions compliance, and even if it does, that will likely create a lower-performance car than consumers paid for.

“Throughout these years, Volkswagen has been lying to us,” says Rebecca Kaplan, an at-large member of the Oakland City Council, who has been active in reducing carbon emissions in her city. “They’ve been undermining the very things that I have been fighting for.” Kaplan, who has stopped driving her non-compliant VW Golf TDI and rejected a lowball trade-in offer from the dealer, has joined one of hundreds of class-action suits against the automaker, likely to be consolidated into a large multi-district case.

The combination of regulatory oversight and class-action litigation can keep companies in line. But a bill in Congress consisting of a little more than 100 words would not only prevent Kaplan from seeking justice but also cripple virtually all class-action lawsuits against corporations. It’s known as the “Fairness in Class Action Litigation Act,” but lawyers and advocates call it the “VW Bailout Bill.”

The bill, which will get a vote on the House floor in the first week of January, follows a series of steps by the judiciary to block the courthouse door on behalf of corporations. “There's no question the Supreme Court has ben moving in that direction to limit access to courts,” said Joanne Doroshow, executive director of the Center for Justice and Democracy. “But Congress has never done something like this, trying to step in and wipe out class-actions.”


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