WASHINGTON -- The hundreds of frustrated Volkswagen dealers who turned up at the National Automobile Dealers Association convention in March in Las Vegas faced a difficult decision.
Charge ahead with a class-action lawsuit against the automaker for damages related to the diesel emissions scandal, or roll the dice on an out-of-court deal.
At the last minute, retailers decided to go for a settlement -- wishing to avoid a contentious court battle that would further damage a franchise already under siege. But that choice may prove to be a costly miscalculation.
Last week, VW agreed to pay out piles of cash to diesel owners and government agencies as part of a record $15 billion in settlements of class-action claims. VW dealers -- faced with plunging sales and decreasing franchise values -- received nothing.
"I hate to say "I told you so,' but I think they realize the train may have left the station," said dealer lawyer Leonard Bellavia of Bellavia Blatt & Crossett in Mineola, N.Y.
He said retailers "would've done better and gotten a faster result if they had taken the advice of dealer counsel to file a class action while the pressure was on. It would've been a lot easier to get a lot more money at an earlier stage."
Retailers were reluctant to "jump into the attack on VW," said dealer lawyer Aaron Jacoby of Arent Fox in Los Angeles.
"The dealers missed the boat on this one, but with intent," Jacoby wrote in an email. "None of the prominent dealers wanted to lead on a class action. I think it felt too distasteful to most of them."
Now the hopes of VW's 652 U.S. dealers rest with a six-man committee negotiating a deal with the manufacturer.