Roberto Martinez of Colson Hicks Eidson (Photo: J. Albert Diaz/ALM)
Braman Audi dealerships are joining the glut of litigation against Volkswagen over its emissions scandal.
Two dealerships owned by South Florida billionaire Norman Braman sued the German automaker in West Palm Beach federal court on Sept. 5. The dealers allege they had trouble selling vehicles because of the widespread knowledge of Audi parent company Volkswagen’s scheme to use software to allow cars to pass emissions tests when they were polluting above legal levels.
Braman Audi of West Palm Beach and Prestige Audi in Lakewood, Colorado, also claim they suffered reputational damage because of the scandal.
Volkswagen admitted in 2015 it installed “defeat device” software in 11 million diesel cars globally to cheat emissions tests. The company agreed to a $4.3 billion criminal settlement with the U.S. government in January.
Lead counsel for the Braman dealerships is former U.S. Attorney Bob Martinez, now a partner at Colson Hicks Eidson in Coral Gables, and Russell McRory, a partner at the Washington-based firm Arent Fox.
They filed one lawsuit focused on the emissions scandal and a second alleging violations of the Florida Dealer Act, claiming Volkswagen “unlawfully enhanced its control over dealer operations by unilaterally changing its contractual relationship with the dealers by imposing arbitrary business practices that reduced dealer trading margin.”
“We hope these lawsuits bring an end to Audi’s unlawful behavior and send a message to other manufacturers/distributors that they have an obligation to their dealers to act fairly and in good faith,” Martinez said in a statement.
The second lawsuit adds as a plaintiff Terry Rhodes, the executive director of Florida’s Department of Highway Safety and Motor Vehicles. The complaint claims Volkswagen reduced the dealer trading margin through programs that required dealers to earn lower new-car wholesale pricing by meeting performance targets and other “arbitrary” conditions.
“Audi’s business practices are unfair to dealers and are part of an intentional strategy to put more coercive power in the hands of the vehicle manufacturer to the detriment of the dealer body,” McRory said in a statement.
A Volkswagen representative did not immediately respond to a request for comment. Claims by auto dealers over the emissions scandal have had success in the past: Volkswagen-branded franchise dealers reached a $1.2 billion settlement with the company in September 2016.