Regulators circle VW, as Kenneth Feinberg stakes out his newest challenge

Monday, January 25, 2016

Nobody's been killed and beaches haven't been slathered in oil, but attorney Kenneth Feinberg still has his work cut out on his latest assignment: How to convince consumers to make a deal with Volkswagen, as regulators circle the husk of its still-smoking PR disaster.

Feinberg, who is developing a compensation program for Volkswagen's diesel woes, is no stranger to the job: Everyone from the federal government to BP and General Motors has sought out his help in making things right with the public.

But Volkswagen's case is different, made all the more challenging even for Feinberg as the company's public missteps mount and lawsuits continue stacking up.

The simple fact that VW apparently lied for years about installing emissions cheats in some diesel models would be enough to make consumers pause when considering a deal with the company to avoid court.


Feinberg has generally won high praise for his work, but some critics take issue with the independence he claims despite being hired by companies.

"That's where I think you run into some questions because, to some extent, I think as a practical matter, whether he calls himself independent or an administrator - and as independent as he tries to be - what he really is is a defense lawyer working for a defendant" that wants people to drop their lawsuits, said Stephen J. Herman, an attorney at Herman Herman & Katz LLP, who served as the co-lead of the plaintiffs' steering committee in the Deepwater Horizon lawsuits.

Volkswagen will have significant input into the details of the protocol, Feinberg said. Class action plaintiffs, their attorneys, EPA, the California Air Resources Board and others will also be able to comment on the draft, he said. But once it's finalized, he's on his own.

Joanne Doroshow, executive director of the Center for Justice and Democracy at New York Law School, said she's concerned about the precedent the funds set for future disasters and scandals that could warrant mass litigation.

"Increasingly, companies, it seems, are thinking of it that way, and ... ultimately I think it threatens our democratic system," she said.


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