Volkswagen AG prevailed in an April 6 ruling from a New York state court that will make it more difficult for shareholders to sue non-U.S. companies in New York. This ruling builds on a similar decision obtained by S&C on behalf of UBS in 2021 that prevented investors from suing the Swiss company in New York. Here, the S&C team thwarted the plaintiffs’ attempt to bypass two recent New York Court of Appeals decisions, with the court rejecting this workaround.
In his decision, Justice Joel M. Cohen of the Commercial Division of the New York Supreme Court dismissed a shareholder derivative action seeking to hold current and former Volkswagen Supervisory Board members and executives of Volkswagen AG liable for the company’s diesel emissions crisis. The decision held that shareholder derivative claims against non-U.S. directors and officers of non-U.S. companies, such as Volkswagen AG, may not be asserted under New York law in New York courts.
Since January 2016, S&C has served as National Coordinating Counsel for Volkswagen in responding to an onslaught of federal and state regulatory and civil litigation. This case was the last of those cases. As a result of S&C’s global settlement strategy, Volkswagen was able to resolve a significant majority of its litigation in the first year of its diesel crisis.
The S&C team representing Volkswagen in defending against this New York derivative action included Robert Giuffra Jr. (who argued the motion), David Rein, Suhana Han, Jon Sedlak, Frank Orlich, Adler Pierce and Madeline Killen.