Louis Freeh. (Photo: Diego M. Radzinschi/NLJ)

SAN FRANCISCO — The federal judge overseeing civil litigation brought in the wake of Volkswagen's diesel emissions scandal has excluded expert testimony offered by former FBI Director Louis Freeh.

U.S. District Judge Charles Breyer of the Northern District of California ruled from the bench Tuesday at the conclusion of a Daubert hearing that Freeh's opinion wasn't relevant to the trial set to push off in his courtroom later this month where plaintiffs who opted out of VW's earlier civil settlement with customers will be seeking punitive damages.

Freeh was set to testify that the government settlement in the related criminal case, where VW agreed to pay $2.8 billion in 2017, should have been much higher—between $34 billion and $68 billion. Breyer, however, said Freeh's opinion could bog down the trial and require testimony from federal prosecutors as well as the judge who oversaw the criminal case, U.S. District Judge Sean Cox of the Eastern District of Michigan. Breyer said that plaintiffs counsel couldn't point to a single case where that type of testimony would be admissible.

Breyer's ruling mooted a motion to disqualify Freeh brought by VW's lawyers at Sullivan & Cromwell who contended that Freeh's primary expert conclusion—that VW hid executive-level wrongdoing from Cox and the prosecutors—was based largely on a document that the company's lawyers shared with him as he was in the running for a position on the legal team advising the company on its diesel emissions fallout. Freeh had asked for a guaranteed $15 million over three years, plus 10% of the "savings the company and its subsidiaries yield and/or the costs saved by settlements," according to a draft engagement letter the Sullivan & Cromwell lawyers filed as an attachment to their motion to disqualify.

Breyer's rulings came after Freeh had earlier taken the witness stand during Tuesday's hearing to face questioning from Sullivan & Cromwell's Robert Giuffra Jr., a VW lawyer with whom he had consulted during the period in January 2016 when the company was considering hiring him. Giuffra asked Freeh if the two had had a discussion about whether the general counsel of Volkswagen's U.S. subsidiary should continue in his role given the implications of a document they both had reviewed.

"You brought that up, yes," Freeh said.

Giuffra also elicited testimony from Freeh that he had not consulted with federal prosecutors, Cox or anyone with the company to ask what the company had disclosed to the government and the court at the time the criminal fine was approved. Freeh also testified that he was paid $50,000 for the expert report and was charging plaintiffs $1,850 an hour for court time.

Fred Heather of Glaser Weil Fink Howard Avchen & Shapiro, who represents the opt-out plaintiffs who retained Freeh as an expert, said Tuesday that he had no comment on the judge's decision. A representative of Volkswagen declined to comment.

Read more: 

VW Declined to Hire Louis Freeh for $15M. Now He's on the Other Side—and VW Is Crying Foul