Class action accuses VW of skirting legal responsibilities as 150,000+ vehicles have been reserved for purchase already
MCLEAN, Va.–(BUSINESS WIRE)–#EV—Two Volkswagen dealerships lodged a class-action lawsuit at VW accusing the automaker of attempting to skirt its legal obligations by selling its new Scout-brand electric vehicles directly to consumers, according to Hagens Berman.
The lawsuit was filed March 3, 2026, in the U.S. District Court for the Eastern District of Virginia and states, “To avoid these obligations, VW formed separate companies (defendants Scout Motors, Inc. and Scout Motor Sales LLC) to effectively act as shell corporations for distribution. In truth, Scout is simply an offshoot of Volkswagen, and Volkswagen’s decision to sell the Scout EVs is a blatant breach of its contract with the dealers.”
Sunrise Imports LLC of Long Island, New York and Curran Volkswagen Inc. of Stratford, Connecticut bring claims on behalf of a proposed class of all US persons and entities who own or operate a Volkswagen dealership via a Volkswagen Dealer Agreement. Dealership owners may contact the firm for more information about their rights.
The firm has brought prior successful litigation against Volkswagen on behalf of dealership owners when it achieved a $1.2 billion settlement in the aftermath of the Dieselgate emissions-cheating litigation, in which the firm also played a leadership role, culminating in a separate $14.7 billion settlement, the largest ever achieved against an automaker. Additionally, the firm represented FCA dealership owners against the automaker for practices that allegedly harmed dealers.
“We believe Volkswagen was fully aware of its legal responsibilities to dealership owners when it chose to sell Scout vehicles directly to consumers online,” said Steve W. Berman, managing partner and co-founder of Hagens Berman. “It appears that VW has violated its own contract with its dealerships, the very businesses that serve its brand, and we intend to uphold the contractual rights of these small businesses.”
Scout’s Direct Sales Campaign
Scout’s website offers would-be buyers the chance to purchase EVs by paying to “reserve your spot in line” pre-production, prompting users to select their vehicles from available models and features. According to the lawsuit, over 150,000 individuals have already paid for reservations to purchase Scout vehicles.
“VW dealerships are accordingly being deprived of their right and ability to sell these cutting-edge vehicles, at significant financial cost to the dealers,” the lawsuit states.
Per the standard Dealer Agreement, and accompanying “Standard Provisions” document, Volkswagen is prohibited from selling directly to consumers.
“Not only are the dealers losing their opportunity to collect $100 from every purchaser and make a profit from the vehicle’s sale, they are also injured by lost opportunities to finance, service and repair the vehicles, and to cross-sale these and other VW vehicles, both now and in the future,” according to the lawsuit.
Volkswagen’s Speedbump
The lawsuit cites contractual language from the Volkswagen Dealer Agreement stating plainly, “VWoA will sell and deliver Authorized Products to Dealer in accordance with this Agreement,” and “In the conduct of its business, VWoA will: …Avoid all discourteous, deceptive, misleading, unprofessional or unethical practices.” By refusing to sell “Authorized Products” to dealers, Volkswagen has breached its agreement, the lawsuit states.
According to the lawsuit, Volkswagen sought to shirk its legal responsibilities “based on the fiction that Scout is separate from Volkswagen,” when in fact the brand was wholly obtained by Volkswagen AG when it acquired American truck manufacturer International Motors (Navistar) in 2021.
As cited in the lawsuit, Scout’s CEO, Scott Keogh, stated publicly in a recent podcast, “100% Scout Motors is part of the Volkswagen Group… Scout Motors is a [sic] LLC, and reports into the Volkswagen Group directly in Germany.”
The lawsuit brings claims of breach of contract, tortious interference with business relations and conspiracy to injure a business relationship and seeks damages (including punitive and treble damages) and injunctive relief ending the behavior in question.
Find out more about the firm’s lawsuit against Volkswagen and Scout Motors.
Hagens Berman is a global plaintiffs’ rights complex litigation law firm with a tenacious drive for achieving real results for those harmed by corporate negligence and fraud. Since its founding in 1993, the firm’s determination has earned it numerous national accolades, awards and titles of “Most Feared Plaintiff’s Firm,” MVPs and Trailblazers of class-action law. More about the law firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
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