NEW YORK -- Volkswagen Group faces further legal fights on several fronts in the U.S. despite its announcement on Thursday it reached a preliminary deal to resolve consumers' and regulators' claims over vehicles fitted with software to cheat on diesel-emissions tests.
The U.S. Department of Justice said its criminal investigation into VW's conduct remained ongoing, and a multi-state probe into consumer and environmental violations will continue, according to New York Attorney General Eric Schneiderman, whose office is among those leading the investigation.
It also remains unclear whether the consumers behind the 600 class actions filed over the scandal will ultimately accept Volkswagen's offer, or choose to keep litigating.
A lawyer for Volkswagen, Robert Giuffra, said that the agreement represented "an important step forward on the road to making things right" as the company attempts to fully compensate customers and win back public trust.
The proposal would give customers the options to have Volkswagen buy back or fix their vehicles, or cancel their leases and return the cars. Consumers will be eligible for additional compensation in addition to those options.
The proposal encompasses about 480,000 vehicles with 2.0-liter engines, and does not address about 90,000 additional vehicles with 3.0-liter engines, according to U.S. District Judge Charles Breyer, who is overseeing consolidated litigation over the vehicles in federal court in California.
Breyer said during a court hearing on Thursday that he expected the parties would work together "expeditiously" to reach an agreement on those vehicles, as well as other fines and penalties.
For vehicles covered by the deal, it will take time to hammer out the details, said Elizabeth Cabraser, who was appointed to lead litigation on behalf of plaintiffs. "We have a ways to go" on issues like notifying class members and filing formal court documents, Cabraser said during Thursday's hearing, "but we are now able to start on that way."
Breyer has asked the parties to submit a motion outlining the deal and formally requesting his preliminary approval by June 21, and has scheduled a July 26 hearing on the motion.
If it is preliminarily approved, plaintiffs' lawyers will then notify consumers about their legal options and set a deadline for their response. Once that process is complete, Breyer will decide whether to grant final approval.
'Settlement better be enough'
Michael Hausfeld, a Washington, D.C., lawyer who is on the plaintiffs' leadership committee, said he believed the combination of vehicle buybacks, repairs and lease terminations, along with additional compensation, was "as complete a package as would be feasible" for plaintiffs.
If consumers are unhappy with their offers, they may choose to pursue individual cases, said David Vendler, a lawyer at Morris Polich & Purdy in Los Angeles who represents some Volkswagen plaintiffs. He noted the amount of compensation offered may prove a sticking point if plaintiffs feel the amount is inadequate.
"The settlement better be enough - there are a lot of attorneys out there, and so if thousands of people decide to just continue with litigation, which they have every right to do, it could tank," Vendler said.
Elizabeth Pritzker of Pritzker Levine in San Francisco, another lawyer representing Volkswagen plaintiffs, said the deal seemed like a strong one but that speed was of the essence.
"Obviously promising to buy back the vehicle months from now, or years from now isn't going to work for people." she said. "It's going to have to be a program that can be implemented very quickly."