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Brown: Praise for committee

In March, six Volkswagen retailers came together with the mission of negotiating an out-of-court settlement with the factory to compensate their fellow dealers for losses from the diesel emissions scandal, and averting what they feared would be messy litigation against their business partner.

But when such a deal finally came together last week, it was disclosed by someone else: Steve Berman, a class-action attorney representing a VW dealer who had defied the six-member committee and sued VW in April.

It’s still unclear what roles the VW dealer committee and Berman’s firm played in the run-up to the dealer agreement. For now, both parties appear pleased that a deal — any deal — is at hand.

In a hearing, Berman said the deal would “heal the wounds between the dealers and Volkswagen.”

Berman, who was unavailable for comment last week, represents Ed Napleton, an Illinois-based dealer who sued VW in April seeking class-action status, alleging that the automaker had defrauded its retailers by cheating on emissions tests. The case was later transferred to a federal court in San Francisco, where U.S. District Judge Charles Breyer is overseeing the complex web of consumer and government litigation against VW.

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Kalafer: Credits Ed Napleton

To VW dealer Steve Kalafer, who has been critical of the six-member Dealer Investment Committee’s call to forgo litigation in favor of voluntary settlement talks, Napleton ended up as the “hero” of the day.

“If it wasn’t for Napleton … this would have been another manufacturer telling their dealers, “I’ll make it up to you someday,'” Kalafer said.

Jason Kuhn, the Florida VW dealer who led the Investment Committee, said the full group met with VW executives twice in person and held many more conference calls over the last three months, totaling “hundreds” of hours of work on a settlement.

After months of discussions, Kuhn said last week, “we felt that the deal contained enough important parts that dealers would be happy.”

Alan Brown, chairman of VW’s dealer council and another member of the Investment Committee, praised the deal, saying the committee acted as the “voice of the dealer” in the talks and aimed to ensure that “we were made whole with damages” and that “VW took the American market seriously.”

Aaron Jacoby, a dealer lawyer and partner at Arent Fox in Los Angeles who counts many VW dealers among his clients, says Napleton’s suit was likely key in bringing the deal about.

“Rather than looking to the dealer committee that was established for the purpose to try to resolve this, it appears VW made a deal with class-action counsel,” he said, “which is typical to how class-action claims are resolved but different than what dealers were expecting.”