FRT Insights


Case Spotlight: Volkswagen Shareholder Class Action


Based in Germany, Volkswagen (“VW”) is the largest car maker in the world. In recent years, VW’s strategy focused on marketing cars with advanced diesel technologies that complied with the strictest emissions standards while boasting high fuel economy.

On September 18, 2015, U.S. regulators announced that VW had illegally installed software in its diesel-powered vehicles to cheat emissions tests in the U.S. Millions of VW cars globally have been impacted by this scandal, including nearly 600,000 in the U.S.

During 2016, hundreds of institutions with material investments in VW securities filed suit directly against the company in Germany, where it is domiciled.  Germany is an opt-in jurisdiction and by year end, there were more than eleven separate litigation and settlement efforts underway to recover losses on VW investments. To date, these efforts have taken place in three primary countries: U.S., Germany, and the Netherlands.

United States:

The U.S. class action against VW only covers American Depository Shares (“ADRs”) trading on the New York Stock Exchange (“NYSE”). The company has lost an estimated $63 billion in market value in the wake of this scandal. The price of its ADRs dropped from $38.03 on September 17, 2015 (the day before the regulator announcement) to $26.16 on January 5, 2016.

  • August 1, 2016: VW asked a U.S. federal judge in California to dismiss the shareholder class action. Investors claimed the company’s actions artificially inflated its security prices from November 2010 to January 2016.
  • January 4, 2017: A federal judge rejected VW’s request to dismiss its claim that VW was exempt from U.S. securities laws because it sold a certain type of security to American investors.

Germany and Europe:

Losses for many investors involve VW shares traded on the DB Xetra Exchange in Frankfurt.  In order to be eligible to participate in any future settlements or damages awards for these securities, investors must proactively opt-in to organized group litigations (coalitions) in Europe.

Filings in Germany and Europe illustrate an ongoing trend: of overseas investors who previously looked only to the U.S. court system for relief must now navigate the risks of various jurisdictions where the defendant company’s reside.

GERMANY: At least seven direct action efforts have been organized on behalf of VW investors.

At this point, all organizers have filed complaints in German courts, with some considering additional filings in the coming months. These litigations will proceed in two stages. First, the parties have petitioned the court to have the actions certified under model case procedures, called a KapMuG. Certification allows the appointment of a lead or model claimant who will act on behalf of all claimants to resolve common issues – essentially a determination of liability. After and assuming liability is established, proceedings will move to a second, damages phase where issues related to each claimants’ losses will be addressed by the court.

Earlier this year, the Court selected DRRT’s client Deka Investment GmbH as the model case lead plaintiff. The court will now set hearings and briefing schedules. The court has not scheduled an oral hearing but should do so within the next three months. Further, the parties have 6-9 months to submit briefs before a hearing on the merits. In the meantime, the lawyers expect hearings and decisions on procedural issues and formalities in the pending cases, combined with a deadline to produce further documents evidencing the plaintiffs’ standing. The model case proceeds independent of the procedural issues and formalities, and will not be concluded before 2018, followed by a potential appeal to Germany’s highest court.

Under the KapMuG process, investors now have six months to register their claims with the court if they wish to participate in any settlement reached. Investors who fail to register their claims before this time period expires will be precluded from participating in any resulting settlement and will have to actively litigate their individual case directly against Volkswagen.

DUTCH FOUNDATION: A number of firms took a more pan-European approach to recovery by setting up Foundations in the Netherlands under the Dutch Collective Settlements Act. The goal of these Foundations is to pressure Volkswagen toward a settlement that will be binding across Europe and in non-US countries.

For investors, Dutch Foundations are attractive vehicles because they have a successful recent track record of achieving settlements, participation is anonymous, and they do not involve actually serving as named plaintiff.

Typically, Foundations first attempt to settle with defendants out-of-court. If unsuccessful, they may initiate litigation in their own name and at their own expense. Proceedings resemble declaratory judgment actions in the U.S., focusing on proving the defendants’ alleged wrongdoing. If they prevail on liability, the litigation then proceeds to a second damages phase whereby registered Foundation members have an opportunity to submit claims in order to recoup their losses. In addition, to preserve timeliness, some Foundations may file in the KapMuG or register member claims in Germany after the court accepts the KapMuG.


FRT Global is designed to meet the growing demand for research and analysis of non-U.S. settlement and recovery opportunities. FRT’s team of professionals possesses the necessary insight, relationships and expertise to assist you in successful international claims recovery. The company’s FRT Global suite of services include analyzing trading history for relevant transactions, coordinating with litigation organizers in different countries, supporting the processing and submitting of transactions, and researching specific case and jurisdiction requirements.

For more information on this case or other securities, global and antitrust class action litigations, please contact Financial Recovery Technologies at

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