Dealerships Sue Volkswagen

Illinois-based Napleton Automotive Group (which owns three Volkswagen dealerships) filed suit against Volkswagen Wednesday, alleging that the automaker defrauded dealers and accused the company of engaging in a “criminal racketeering enterprise” related to its diesel emissions violations.

The complaint lays out a laundry list of the effects of the diesel scandal: that dealer profits have been “erased,” due to their inability to sell the thousands of diesel Volkswagens (which are still under a stop-sale order, until the company finds a fix which is agreed on by the Environmental Protection Agency and the California Air Resources Board), a decline in the value of those vehicles, the loss of brand value for all Volkswagen vehicles, not just the diesel-powered models, and artificially high costs of franchising due to the formerly very successful Clean Diesel campaign.

The complaint alleges that not only did Volkswagen violate the Clean Air Act and state environmental regulations, but they also “breached state franchisee protection laws, breached its franchise dealer agreements, defrauded its franchise dealers, and engaged in unfair competition under state and federal law.” In addition to malfeasance relating to the diesel fraud, the suit alleges that the company engaged in “unfair pricing and allocation schemes.”

The suit names Volkswagen Group America, Volkswagen AG, and Bosch (an automotive supplier which the suit states supplied the “defeat device”) as defendants.

This is the third time in the past few years that a Napleton-owned dealership has sued an automaker; in January the group filed suit against Fiat Chrysler alleging (among other things) that the company incentivized dealers to report false sales. In 2014, Napleton sued Jaguar Land Rover after the automaker blocked the sale of five of its dealerships to the automotive dealership group.

The full complaint by Napleton Automotive Group may be found here.

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