Elizabeth J. Cabraser

The Software Knew When It Was Being Tested

Volkswagen sold approximately 550,000 diesel vehicles in the United States as low-emission cars.

Software in those vehicles recognized the conditions of laboratory testing and changed engine behavior while the test was running. In normal driving, the same engines produced nitrogen-oxide emissions above the standards used to certify them.

The deception was therefore not a claim about the cars. It was built into the mechanism by which claims about cars are verified.

Public disclosure in September 2015 changed the value of every affected vehicle at once. Buyers had paid for emissions performance the cars did not deliver, and the resale market now reflected the disclosed problem.

The Date That Set Every Price

That created the central problem of the entire settlement, and it had to be solved before any formula could be written.

A conventional damages measure looks to market value at the time of the remedy. Applied here, it would have valued each car after the fraud became public — which is to say, at a price the fraud itself had depressed. Volkswagen's buyback obligation would have shrunk in proportion to the harm Volkswagen had caused. The worse the disclosure hurt owners, the less the company would owe them.

The settlements instead valued eligible vehicles as of September 2015, immediately before public disclosure changed the market.

Model, year, trim, region, mileage, ownership status, and remedy election still affected individual calculations. But the post-disclosure decline did not set the buyback baseline.

One date, chosen correctly, determined what hundreds of thousands of people received.

Ninety-Seven Firms and Twelve Million Pages

The Judicial Panel on Multidistrict Litigation sent more than one thousand federal cases to Judge Charles R. Breyer in the Northern District of California, who appointed Cabraser Plaintiffs' Lead Counsel and chair of the Plaintiffs' Steering Committee.

She coordinated shared litigation work among Class Counsel and ninety-seven additional plaintiffs' firms, while working alongside federal and California regulators on a distinct remedy for owners and lessees.

The litigation team prepared a 719-page consolidated complaint, selected class representatives, reviewed more than twelve million pages of Volkswagen records, and negotiated the settlements. The court-appointed settlement master reported at least forty meetings and in-person conferences over five months.

The formulas had to absorb an unusual number of variables: two engine sizes, several model years and brands, owners and lessees in different legal positions, outstanding loans, changing mileage, title records, and the possibility that regulators would approve a repair for some vehicles and not others.

Cabraser's team answered the shared valuation problem across both engine groups the same way — by beginning with the vehicle's retail value immediately before the deception became public.

Judge Breyer granted final approval to the 2.0-liter consumer settlement in October 2016 and the 3.0-liter consumer settlement in May 2017.

Approval fixed the rights and the formulas. Every owner still needed a usable path through documentation, lender payoff, surrender or repair, and payment — so the work continued past the headline terms into the procedures that would determine whether an election could actually be completed.

The 2.0-Liter Remedy

An eligible 2.0-liter owner could tender the vehicle for a buyback based on its September 2015 retail value, and receive a separate restitution payment. Eligible lessees could end their leases without the usual early-termination charge and receive restitution.

Owners who kept their vehicles remained eligible for compensation and a free emissions modification — but Volkswagen first had to obtain approval from the Environmental Protection Agency and the California Air Resources Board.

Not Waiting for the Engineering

That approval requirement created a risk the settlement had to allocate: what happens to an owner if the fix never comes?

The answer was that consumers could choose a buyback without waiting for an approved technical fix.

Volkswagen continued to pursue repairs, but consumer recovery did not depend on the company's engineering schedule. Regulators decided whether a modification brought a vehicle into compliance. An owner who simply wanted out could surrender the car before any approved modification existed.

A related Clean Air Act decree required Volkswagen to remove from commerce or modify at least eighty-five percent of the affected 2.0-liter vehicles, with additional mitigation payments if it missed the target. The public requirement and the consumer settlement remained legally distinct, but both depended on making buybacks and approved modifications accessible enough for owners to complete them.

Two Generations of the 3.0-Liter

The 3.0-liter agreement divided vehicles into two generations to account for genuinely different engineering paths.

Generation 1 covered older Volkswagen Touareg and Audi Q7 models. Owners could choose a buyback or keep the vehicle after an approved emissions modification, with compensation under either path.

Generation 2 covered newer Volkswagen, Audi, and Porsche vehicles for which a repair restoring the original emissions standard appeared feasible. Owners and lessees received a separate payment while those vehicles began on a repair track.

If Volkswagen did not obtain an approved Generation 2 repair by the prescribed deadline, buyback and lease-termination rights opened. An alternate approved modification could also become available, with compensation. Modified or repaired 3.0-liter vehicles received extended emissions and engine warranties.

The structure accommodated a real technical difference among engines without transferring the risk of a failed repair to the consumer. Across both generations, consumers retained an enforceable route out, and federal and California regulators — not Volkswagen — controlled whether a technical fix could be offered at all.

Restitution Was Not the Car

The buyback and the restitution payment addressed different losses, and the settlements kept them separate.

The buyback removed a vehicle whose value and legal status had changed. Restitution compensated the consumer for the deceptive sale and the related harm.

An owner who accepted an approved modification therefore did not surrender the monetary claim. A lessee who ended a contract did not have to remain through the original term before receiving payment.

The agreements also addressed consumers who had sold affected vehicles after disclosure. Defined eligibility and allocation rules divided restitution where a former owner had absorbed the disclosure loss while a later owner still held the vehicle needed for surrender or repair — two people with claims arising from the same car at different moments in its history.

The Closing Table

A remedy involving hundreds of thousands of cars could have failed at the closing table.

Some owners owed lenders more than the car was currently worth. Others had refinanced, changed title, moved, added mileage, or transferred a lease.

The program matched each claim to a vehicle identification number and ownership record, verified title and mileage, calculated lender payoff, accepted surrendered vehicles, and issued consumer payments.

Integrating lenders and lessors into the closing is what prevented a lien from turning an approved buyback into a transaction the owner could not finish. Vehicle value, debt, title transfer, and restitution were all calculated within the same supervised closing.

The alternative would have left each consumer to assemble a separate negotiation among Volkswagen, a bank, a dealer, and a regulator — which for most people is indistinguishable from having no remedy.

Volkswagen also could not certify its own solution. EPA and CARB approval was required before the company could offer a 2.0-liter modification, a Generation 1 modification, or a Generation 2 repair under the settlements, and Volkswagen had to disclose a modification's effects on emissions, fuel economy, maintenance, and performance. A court-appointed Claims Supervisor monitored compliance and deadlines for registration, document review, repair approval, surrender, and payment.

The settlements adapted title, delivery, closing, and documentation requirements for military consumers stationed overseas. Every eligible military consumer who pursued a claim received payment.

86.2 Percent

By July 2020, Volkswagen, Audi, and Porsche had returned more than $9.5 billion through completed buybacks, lease terminations, lender payoffs, modifications, restitution, and related consumer payments. A separate Bosch settlement paid more than $300 million to eligible vehicle owners and reseller dealers.

Payments were associated with more than eighty-eight percent of affected vehicles.

Among eligible consumers who completed the process and could choose between surrender and modification, 86.2 percent elected a buyback or early lease termination.

That figure is the settlement's own verdict on itself. Given a genuine choice between keeping a repaired car and returning it at a pre-disclosure price, the overwhelming majority took the exit — which is only meaningful because the structure gave them one that did not depend on the defendant's engineers.

Four Decades of Aggregate Litigation

The Volkswagen appointment followed decades of leadership in aggregate litigation.

Cabraser joined Robert Lieff's San Francisco practice in 1978, while still a law student at Berkeley, and the firm has carried her name for decades. She has served as court-appointed lead, co-lead, or class counsel in scores of federal multidistrict and state coordinated proceedings, including the multistate tobacco litigation, the Exxon Valdez disaster, silicone breast implants, Fen-Phen diet drugs, Vioxx, Toyota sudden acceleration, securities and investment-fraud cases, and Holocaust-era human-rights litigation that recovered assets for survivors half a century after the fact.

Her national leadership has also included the General Motors ignition-switch litigation, the Takata airbag litigation, the Fiat Chrysler EcoDiesel emissions litigation, the generic-drugs pricing antitrust litigation, the national prescription-opiates litigation, and the BP Gulf oil spill proceedings.

Each docket presented some version of the question Volkswagen posed: how a court system built for two-party disputes can deliver an administrable remedy to large groups while preserving material differences among individual claims.

The Rules She Practices Under

Cabraser's work spans both procedural rulemaking and the litigation conducted under those rules.

From 2010 to 2017, she served on the Advisory Committee on Civil Rules — the body that drafts amendments to the Federal Rules of Civil Procedure. Her tenure spanned the development of amendments to Rule 23, the class-action rule, addressing electronic notice, criteria for evaluating proposed settlements, and objector practice. The Volkswagen program likewise used a digital claims portal, supervised closings, and court-monitored deadlines to administer relief at scale.

She serves on the Council of the American Law Institute and has advised several of its flagship projects, including the Principles of the Law of Aggregate Litigation, the field's foundational effort to state what fair aggregation requires. She is co-editor-in-chief of the ABA Survey of Federal Class Action Law, and she teaches complex, multidistrict, and class-action litigation as a lecturer at Berkeley Law and an adjunct at Columbia Law School, while conducting seminars for judges through the Federal Judicial Center.

Her committee, institute, teaching, and litigation roles connect procedural rulemaking with the administration of large class and multidistrict proceedings.

Practice

Cabraser is a partner in Lieff Cabraser Heimann & Bernstein's San Francisco office, where her practice includes consumer protection, defective products, mass torts, and securities and financial-fraud litigation. She is a fellow of the American Academy of Arts and Sciences, and the American Bar Association's Commission on Women in the Profession has honored her with the Margaret Brent Women Lawyers of Achievement Award.

Under her leadership, the firm has grown into one of the country's largest devoted to representing plaintiffs, with the staffing and resources required for lengthy national litigation.