CalSTRS to Sue Volkswagen Over Emissions Scandal

The $179 billion pension will take part in a suit accusing the firm of threatening long-term shareholder value.

The California State Teachers’ Retirement System (CalSTRS) is suing Volkswagen for the loss in shareholder value following the automaker’s “heinous” and “deceitful” actions.

The $179.4 billion retirement system announced Friday it would take part in a German securities litigation that aims to recover losses resulting from Volkswagen’s “illegal and intentional wrongdoing to manipulate emissions testing.”

The German automaker admitted last fall to having installed software that would misrepresent air quality and emissions information on vehicles billed as “clean diesel.”

“Volkswagen’s actions are particularly heinous, since the company marketed itself as a forward thinking steward of the environment,” said CalSTRS CEO Jack Ehnes in a statement. “Its deceitful and hypocritical actions ultimately caused great harm to the atmosphere and the emissions cheating scandal has badly hurt the company’s value.”

Volkswagen said Wednesday it considers German shareholder lawsuits to be “without merit,” as the company “promptly” disclosed information regarding the risks to its stock price after its violation of US environmental regulations was announced.

CalSTRS, which owns $52 million in common and preferred Volkswagen stock, said the automaker’s “purposeful deception” threatened long-term shareholder value. 

“As an actively involved, long-term shareholder, CalSTRS places utmost importance on our fiduciary duty to our members to attempt to recover losses due to such wrongful conduct, while also communicating a clear message to Volkswagen, as well as the entire automotive industry, that we will not tolerate these illegal actions,” Ehnes said.

International law firm Quinn Emanuel and foreign litigation finance group Bentham Europe will represent CalSTRS in the case. Additional plaintiffs will be announced in the near future.

Other pension funds have also filed suits against Volkswagen, including the St. Clair Shores Police and Fire Retirement System in Michigan and the Arkansas State Highway Employees Retirement System.

Related: Investors Demand Answers over Emissions Lobbying

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