Fiat Chrysler Agrees to $110M Settlement in Investors' Class Action Over Cars' Emissions and Safety
The international automaker faced litigation from investors over costly settlements with regulators over safety and emissions problems, despite public assurance to the contrary from company executives.
April 08, 2019 at 03:31 PM
3 minute read
International car maker Fiat Chrysler has agreed to a tentative $110 million settlement in an investor class-action suit over the company's failure to comply with federal emission and safety standards that cost the company in massive fines and costly recalls, according to court documents.
The suit was first filed in the Southern District of New York in 2015, following a record $105 million levying of fines against the company by the National Highway Traffic Safety Administration that year, according to the complaint. Additionally, in an amended set of claims, the company faced regulatory concerns over its diesel fuel emissions standards. The company would go on to settle these claims for $800 million.
Throughout the class period from October 2014 to May 2017, the plaintiffs claimed company executives were aware of the issues facing the manufacturer, despite public assurances that the company wasn't facing the kinds of similar safety issues faced by General Motors and the emissions issues faced by Volkswagen just prior to Chrysler's own respective issues.
The class was certified in the suit in June 2018. Discovery produced more than 3.5 million pages of documents, and included 36 total depositions, along with reports from 11 expert witnesses, according to court documents.
Beginning in September 2018, the parties entered into mediation discussions with former San Francisco Superior Court Judge Daniel Weinstein. Following a second meeting in January, Weinstein issued a mediator's proposal to settle the action for $110 million. The parties accepted the proposal in February.
The suit was an example of an event-driven class action, brought against the company following allegations of wrongdoing or negligence. Legal observers have seen a rise in these kinds of suits, and anticipated 2019 would see more of them.
The settlement now requires the approval of U.S. District Judge Jesse Furman of the Southern District of New York.
In a statement sent by a Fiat Chrysler Automobiles spokesman, the company said it was pleased to reach an “amicable solution” in the matter, even as it “continues to vigorously deny the allegations of wrongdoing made in this lawsuit.”
Fiat Chrysler was represented by Sullivan & Cromwell partners Robert Giuffra Jr. and William Monahan.
The plaintiffs were represented by co-class counsel, led by Pomerantz LLP managing partner Jeremy Lieberman and Rosen Law Firm name attorney Laurence Rosen.
In a statement, Lieberman said the plaintiffs were “very pleased” with the proposed settlement, which he said would achieve a recovery of 14 percent of recoverable damages.
“We look forward to progressing to the final stages of the settlement,” Lieberman said.
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