A federal judge has excluded the testimony offered by a former FBI Director in the case of the high-profile Volkswagen diesel emissions scandal.
Volkswagen Diesel Emissions Scandal
Volkswagen installed emissions software on more than 500,000 diesel cars in the United States and about 10.5 million more globally that allowed them to sense when a car is going through an emissions test. When the cars are in test mode, they are fully compliant with the maximum emissions levels that are set by The Environmental Protection Agency (EPA). But when the cars are driving normally, the cars switch to a different mode that changes fuel pressure, injection timing, exhaust-gas recirculation, and the amount of urea fluid that is sprayed into the exhaust. The “normal driving” mode delivers higher mileage and power; however, it also emits nitrogen-oxide (NOx) at levels that are up to 40 times higher than the federally-allowed limit.
As a result of these findings, Volkswagen was sued by the Environmental Protection Agency, the Federal Trade Commission, and the Department of Justice. Volkswagen was also liable civilly to the customers who had purchased the vehicles with the emissions software installed.
Expert Witness Louis Freeh
In 2016, Volkswagen was in talks to hire former FBI Director Louis Freeh to run its diesel emissions litigation. Freeh’s resume includes stints as a special agent in the FBI, Assistant U.S. Attorney, and United States District Judge for the Southern District of New York. President Bill Clinton appointed Freeh as the 5th Director of the Federal Bureau of Investigation, where he served from 1993 to 2001. He now serves as a lawyer and consultant in the private sector.
Freeh requested 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.” In the end, VW passed over Freeh for the role.
Freeh, who is founder and chairman of consulting firm Freeh Group International Solutions and senior managing partner of the affiliated law firm Freeh Sporkin & Sullivan, is now working for the other side. Freeh was retained as an expert witness for the plaintiffs who opted out of VW’s 2016 civil settlement and chose to sue the company instead.
The Knight Law Group retained Freeh as a plaintiff’s expert witness in the case In Re: Volkswagen “Clean Diesel” Marketing, Sales Practices, and Products Liability Litigation. The Knight Group paid Freeh $50,000 to write a 21-page report and agreed to pay $1,850 per hour for any future work. In his report, Freeh concluded that Volkswagen had gotten off too cheaply in the government’s criminal case against it, which settled for $2.8 billion in 2017. In Freeh’s opinion, the proper fine should have been in the range of $34 billion to $68 billion.
Volkswagen’s defense team filed a motion to disqualify. In its motion, the team argued, “Mr. Freeh’s conflict of interest and receipt of confidential information disqualify him from serving as an expert adverse to defendants.” The motion argued that Freeh had “engaged in extensive privileged and confidential discussions with Volkswagen’s senior-most executives and counsel about the same diesel matters underlying this lawsuit, including discussing key documents and legal strategy.”
While the motion to disqualify was still pending, U.S. District Judge Charles Breyer of the Northern District of California, held a Daubert hearing on the relevance of Freeh’s opinion. Judge Breyer ruled that the admission of Freeh’s opinion could bog down the trial and would require testimony from the judge who oversaw the criminal case and federal prosecutors. Judge Breyer said that plaintiffs’ counsel could not point to a single case where that type of testimony would be admissible.
Judge Breyer’s ruling effectively mooted the pending motion to disqualify Freeh based on information that was shared with him when he was in the running for the role to run the company’s previous litigation.