German law firm seeking VW investor class action says company files counter-motion

Latest twist in ‘KapMu’ lawsuit in wake of emissions crisis

Nieding + Barth, a German law firm that aims to prepare the German equivalent of the class-action lawsuit against Volkswagen over the diesel emissions scandal, says it is being undermined in the effort by the automaker.

Last month, Nieding + Barth filed a lawsuit on behalf of a US institutional investor seeking compensation for the almost 40% drop in VW’s share price since the scandal broke last September. According to Nieding + Barth, up to 65 other institutional investors could join the claim, which seeks so-called ‘KapMu’ status – or the equivalent of the US class-action lawsuit.

To achieve KapMu, Nieding + Barth filed a motion with a district court in the city of Braunschweig – near VW’s home base of Wolfsburg – to find out how many lawsuits have been filed against the automaker. One requirement of KapMu is that 10 lawsuits like Nieding + Barth’s must be filed.

The court then decides whether the claims are justified and which of them will serve as a model for the rest. In its case against VW, Nieding + Barth is working with Müller Seidel Vos (MSV), a fellow German firm, and Robbins Geller Rudman & Dowd in the US.

But Nieding + Barth says VW has filed a counter-motion in Braunschweig seeking to squash its request for information.

“It appears as though Volkswagen is trying to keep that information under wraps for as long as possible to weaken the plaintiffs’ case,” said Klaus Nieding, Managing Partner at Nieding + Barth. Daniel Vos, Nieding’s counterpart at MSV, added that should VW’s attempt prove successful, the plaintiffs would resort to other means to get the information needed for KapMU.Meanwhile, a German press report says former VW Chief Executive Martin Winterkorn may have known as early as May 2014 that the automaker was cheating on emissions tests of its diesel engines in the US.

Citing an internal memo, the Bild Zeitung reports that during that month, Winterkorn was made aware that nitrous oxide (NOx) emissions from VW’s diesel engines were 35 times above the legal limit in the US. As this finding did not turn up in tests but instead when the cars were driven, Winterkorn was told that “US authorities will likely investigate whether a defeat device has been installed in the engines,” Bild reported. The defeat device enabled the engines to meet US emissions standards during the tests.

The report could strengthen the case of investors represented by Nieding and Vos as well as those by another law firm called TILP. They are suing VW on the grounds that the automaker violated German securities law by waiting too long to disclose the cheating.

VW declined to comment on the latest events, saying only that the full results of an investigation conducted by US law firm Jones Day would be announced in April. On top of this, it hasn’t announced a new date for its shareholder meeting, which was due to be held that same month.

In related news, the Wall Street Journal (WSJ) reports that yet another lawsuit was filed against VW with a District Court in northern California. According to the WSJ, the complaint alleges that Volkswagen, its units Audi and Porsche, and company executives including Winterkorn, his successor Matthias Müller, as well as the auto supplier Bosch, violated US statutes against racketeering.