Harvey Strosberg is one of Canada’s leading class-action lawyers. He’s co-lead counsel in the country’s bundled class-action lawsuit against Volkswagen over its diesel emissions-rigging. Mr. Strosberg’s firm, Sutts, Strosberg of Windsor, Canada, is representing 135,000 affected VW diesel car owners. In early June in Toronto, the Superior Court of Ontario will decide whether to certify the owners in their class-action suit against VW, permitting the case to move forward. Mr. Strosberg spoke this week with Kevin O’Brien, editor in chief of Handelsblatt Global Edition, while attending a legal conference in Berlin. The Canadian suit against VW, which his firm filed days after the automaker admitted to emissions-rigging last September, is asking the court to award owners at least 3 billion Canadian dollars (USD 2.3 billion). Mr. Strosberg said the court will ultimately set the damages, which could be record-breaking in Canada.
Handelsblatt Global Edition: Mr. Strosberg, why are you involved in the Canadian class-action case against VW?
Harvey Strosberg: I am the lead counsel in the Canadian class-action suit against Takata, a Japanese maker of airbags. Naturally I gravitated toward the diesel problem. There is a consortium of eight law firms across Canada involved in the VW case. I am one of two co-lead counsels on the case.
How high are the damages from the VW affair in Canada?
No one has an idea of the real damages. We are suing for CAD 3 billion (USD 2.3 billion). We don’t know what the real value of the damages are. A judge will determine liability and then will have a system, will have a plan, to ask the court to set the damages.
The problem with the damages is: Is there a technical fix for the affected cars? Everyone wants to know whether or not Volkswagen has a fix. Truth is, I don’t think Volkswagen knows whether or not they have a fix. My expert told me: You can’t fix those small engines. On the larger engines, they may be able to install something, a catalytic converter or whatever, that will be attached to the engine. But I’m told with the smaller engine, they can’t be fixed. So what will be done? Does Volkswagen have to buy back every one of those cars?
A lot of people say they wouldn’t have dreamed of buying a diesel from VW if they knew it was poisonous. A lot of people who buy diesel cars, they’re very environmentally conscious. Because they paid a premium for diesel, and then they were deceived by Volkswagen.
Volkswagen maintains that the emissions-rigging was the work of a few rogue engineers and was not ordered by top management. What are your thoughts?
First of all, the engineers are employees of Volkswagen. It doesn’t matter if the engineer or the board of directors or the CEO knew about it, they are responsible. They are collectively responsible for the damages. So it doesn’t matter whether or not a few engineers knew. Maybe it will be interesting from a criminal context. From a civil context, it doesn’t matter. The company says: We did it. It was wrong. Therefore, they’re liable for damages. The quantum, the amount of damages, is up in the air now. We don’t know what that number will be. Whether or not in addition to damages, there will be punitive damages or aggravated damages. But the liability to me is not in dispute. The damages are in dispute.
At what stage is this proceeding in Superior Court?
On June 3 and 4 in Toronto, we’re having our certification motion. The judge will decide whether or not the class will be certified as a class action. I think at the end of the day Volkswagen knows there will be a certification order. In my opinion, it’s not a slam dunk, but it is a terrific case for certification.
So in your case you won’t have to establish who knew what, when. That is basically a given, right?
I think so. We have to prove that the company – not who – but the company – programmed these vehicles to have a defeat mechanism that didn’t properly record the nitrous oxide.
“I remember when I was a kid. There was a very interesting song that went: “You cheated, you lied, you said that you loved me!’’ Volkswagen cheated and lied and said that they loved me! ”
Didn’t the company itself admit that last September when the scandal became public?
In Canada, do you think VW has hurt its reputation with consumers?
For sure. Absolutely. I remember when I was a kid. There was a very interesting song that went: “You cheated, you lied, you said that you loved me!’’ Volkswagen cheated and lied and said that they loved me! ( Editors note: The song “You Cheated, You Lied’’ was recorded in the 1960s by the band The Shields.)
So as far as the facts of the case go, it’s not a slam dunk but it won’t be difficult to prove. Then it will be up to the judge to decide the damages, right?
The interesting aspect of this case is the damages. Sooner or later, a judge will say: Did Volkswagen breach the EPA standards and therefore breach the Canadian standards. The EPA and Canadian standards are the same. Canada and the U.S. have the same regulations. It’s an integrated system in the U.S. and Canada.
The U.S. cases have been bundled in a court in San Francisco. Will the outcome of the U.S. cases affect your case in Canada?
Sure, they’ll be the same. The judge was just told in San Francisco that he can get in touch with the judge in Ontario.
To what purpose?
Sometimes we don’t know. We can only speculate. So damages are the nub of this case. Does Volkswagen have a fix or not? That is the question.
The U.S. Environmental Protection Agency rejected VW’s first offer for a recall and fix, saying it lacked critical detail. The same just happened in South Korea. Your hunch is that VW really doesn’t have a technical fix for most of these cars, right?
I think not.
But that would mean they would have to replace the cars.
They would have to buy the cars. Not replace the cars, buy the cars.
That I would assume would be the most costly solution for VW.
In what month did you file your class-action suit?
In September 2015.
Was it difficult to find Canadians to be in your class-action suit?
Everybody was just overwhelming. Everybody was calling me like crazy. I was the most popular person in Ontario.
In your proceeding, will there be an evidentiary phase, where you call and question VW executives in court?
We already filed our affidavit evidence two months ago and we’ll get all of the documents that will be produced in the U.S., all of the emails, production documents, engineers’ documents, we’ll get that. We’re not interested in establishing what the president of VW knew. It’s not like Richard Nixon: What did he know and when? It’s not the same thing. It doesn’t matter.
It’s about the compensation for the VW car owners.
That’s right. It’s just about the money.
In the Canadian system, how reasonable is it to expect a quick resolution to this case?
I think there will not be a trial. You can move for summary judgment in Ontario. And that is our plan.
“We’re not interested in establishing what the president of VW knew. It’s not like Richard Nixon: What did he know and when? It’s about compensation for VW car owners in Canada. It’s just about the money.”
Does that mean: You will forego a trial; the court finds in your favor; and awards monetary damages?
No. Usually someone will say no trial. Then someone from Volkswagen, Audi or Porsche will say: Mea culpa (and admit liability). Then the court finds liability and puts the damages thereafter. Sometimes people will stall and it will take a year or two years before the court says: Yes, you’re liable and then we’ll talk about the damages. In Ontario, you have a mechanism. You can make a motion for summary judgment. Just not damages, but liability. And I know our plan is to move for summary judgment very shortly.
Shortly being in a matter of months?
Yes. And I think we’ll get a motion for certification and after we are certified, there will be a motion for summary judgment.
Does this case have the potential to be a record damage award in Canada or is it small potatoes?
This case is not small potatoes. This is a very big case. I think the damages will be in the billions.
Has VW responded to your suit to dispute their liability or offer a defense?
No. I think the lawyers for VW are very professional and frankly, they think that the U.S. cases are more important than the Canadian case. Therefore they think that we should hold off. We were told in the U.S. they have a mediator. Lawyers are working assiduously to get a settlement. The problem is it’s very complex because they’re dealing with the U.S. federal government, the class actions, the state governments. The attorneys general in the States are weighing in too. So it’s very complicated in the U.S. It’s just not damages, the judge said in his transcript it was important to get these cars off the road. They’re spewing nitrous oxide and it’s unsafe for the population. That is the first thing he’s thinking about, the safety of the population.
Here in Germany, there has been criticism of the U.S. and Canadian legal systems which permit class-action suits, saying that excessive legal fees and awards will bring down the company. What do you say to this criticism?
I think that’s really unfair. The damages will be paid to the class members. In Canada, 15 years ago, every person would have to sue Volkswagen by themselves. Access to justice is very important in Canada and the United States. Access to justice and behavioral modification of a company are very important. If there’s a certification, people can opt out if they don’t want to be part of a class action. When there’s a settlement, the class members pay us, not Volkswagen. Volkswagen, they’re saying, if our system was different, only 50 percent of the people would sue us. But here in Canada this is precisely the system to deal with Volkswagen. If you cheat, you can’t complain that the lawyers say: “I got you. And I am suing on behalf of a whole host of people who are really angry with you. And you have to pony up.’’ And then to say: I am the bad guy? I say: Volkswagen is the bad guy. Like in that song: Volkswagen cheated and lied. You said you loved your customers and they didn’t love them. They wanted to cheat them. They wanted to cheat them very badly.
Last question: What kind of car do you drive in Canada? A Volkswagen?
No, I have a 16 year old Jaguar and I have a Mustang convertible too.
Mr. Strosberg, thank you for your time.