Client Highlight: Volkswagen

Client Highlight: Volkswagen

S&C steers Volkswagen to a landmark settlement.

Sullivan & Cromwell serves as national coordinating counsel for Volkswagen in multinational litigation and investigations stemming from “clean-diesel”-related developments. The Firm’s pioneering counsel to Volkswagen demonstrates that corporate crisis resolution in today’s world requires a generalist lawyer with the skill to consider legal and business implications, and the professional agility to pivot quickly and expertly from one area of law to another.
 
The S&C team, led by partners Bob Giuffra and Sharon Nelles, achieved a $14.7 billion resolution with the Department of Justice, Environmental Protection Agency (EPA), California Air Resources Board (CARB) and California Attorney General, the Federal Trade Commission and private plaintiffs represented by the Plaintiffs’ Steering Committee. Volkswagen simultaneously resolved consumer protection claims with 44 U.S. states, the District of Columbia and Puerto Rico in separate negotiations. The settlement was granted final approval by Judge Charles R. Breyer of the U.S. District Court for the Northern District of California on October 25. Heralded by both the Court and the public for its speed, scope and practicality, the settlement puts to bed a huge swath of Volkswagen’s civil, regulatory, consumer and environmental exposure.
 
The settlement was not only unprecedented in size, but in nature. Unlike typical settlement negotiations, Volkswagen and its counsel undertook a “hub-and-spoke” negotiation, with S&C managing multiple negotiations with parties whose interests did not align. The S&C team brought them all together for a global resolution that allowed Volkswagen to return its focus to its future. Volkswagen has since reached additional settlements with the DOJ, EPA, Customs & Border Patrol at the U.S. Department of Homeland Security, CARB, franchise dealers and consumers.
 
The AmLaw Litigation Daily recognized Bob for obtaining the settlement as “Litigator of the Week” in what it called “[o]ne for the history books” and has described the settlement as a “win” for Volkswagen and S&C that is “without parallel in speed and scope.” Citing Stanford Law School professor and organizer of the Global Class Actions Exchange Deborah R. Hensler, The Daily Journal wrote that “[g]etting a case this big and this complex involving international corporations from clerk’s office to the brink of settlement in four months is ‘stunning … It really is the poster child for class action lawsuits.’”
 
Most recently, S&C secured a dismissal with prejudice of a pivotal test case by the State of Wyoming in the Volkswagen diesel-emissions matters. This victory has been recognized by global media as potentially eliminating billions of dollars of exposure for Volkswagen. The Wall Street Journal reported that the decision “could put to rest a sizable risk the German auto maker faced,” and in Germany press agency Deutsche Presse-Agentur describes the decision as “a victory which could save the German automotive giant billions of dollars in payouts.” Nine other states, as well as counties, have filed similar suits, and the decision is important precedent that may lead to dismissals of those actions and limit the ability of states to regulate auto manufacturing.