UPDATE: Volkswagen Posts 'Goodwill Program' Details, Catch-All Causes Confusion

UPDATE: There is a clause in the ‘Program Rules’ that could allow Volkswagen to change the terms of the agreement after the fact. We’ve added statements from Volkswagen, a law firm representing TDI owners and a law professor so you can make an informed decision on whether or not to register for the Goodwill Package.

Owners who signed up for Volkswagen’s “Goodwill Program” to receive $1,000 will still be able to take the automaker to court, according to documents posted by Volkswagen on Monday.

The program outlines specific steps owners would need to take to receive the benefits offered. Including taking ownership of the 2-liter diesel cars before Nov. 9, owners would need to take their cars to Volkswagen dealers to have their gift cards activated, an action Volkswagen deems necessary to curb fraud. Cards will also be printed with the name of the goodwill package recipient.

Volkswagen said it would send one $500 black prepaid Visa card that could be used anywhere, and another $500 white prepaid card that could be redeemed at Volkswagen dealerships only.

The automaker also offered three years of roadside assistance in addition to the gift cards.

At least one dealer group is planning to use the activation procedure to its advantage, telling employees that dealer management hopes customers will spend both prepaid cards at its Volkswagen store.

Volkswagen said the goodwill program only covers 2-liter diesel cars for now. Its 3-liter diesel cars — which the EPA claimed are cheating as well — are not covered under the program.

According to a FAQ posted by the automaker, the prepaid cards can only be registered by the owner at a participating dealership. The owner would need to present a license, proof of ownership, the goodwill package and the affected vehicle to activate the cards and roadside assistance coverage. Volkswagen said the prepaid cards are not transferrable, but the roadside assistance would be if the owner sells the car.

Volkswagen will also record the mileage of the car at the dealership.

Volkswagen said owners who have registered for the goodwill program should be receiving their cards within four weeks. Owners would need to register their gift cards at a dealership before April 30, 2016. The cards are good for one year.

While the number of customers eligible for the program is likely the vast majority of owners of affected vehicles, there are some groups who are ineligible for the program. One of those groups is used car dealers.

You are not eligible for the Goodwill Package if:

1. You purchase or lease an Affected Vehicle on or after November 9, 2015; or
2. You sold, turned-in or otherwise transferred the Affected Vehicle prior to the program initiation (November 9, 2015) or prior to Goodwill Package activation; or
3. Your Affected Vehicle is owned by either Volkswagen Group of America, Inc., or VW Credit, Inc. as part of an employee/retiree lease program or other corporate fleet program; or
4. Your Affected Vehicle was reported sold as a Volkswagen corporate fleet sale; or
5. You are a new vehicle or used vehicle automotive dealership and the Affected Vehicle is in your inventory.

A source tells us that the first round of goodwill packages are expected to be mailed out November 20.

Nearly 500,000 vehicles are affected by the Volkswagen diesel emissions scandal. Those vehicles can emit up to 40 times the legal level of NOx.

While the rules themselves do not limit a Goodwill Package recipient’s right to sue, there is a clause under “Additional Program Rules” that acts as a catch-all for future rule changes:

Program Rules are void to the extent where prohibited by law. Taxes may apply where required by law, and are the responsibility of the Goodwill Package recipient. Eligibility, registration, activation and redemption of Goodwill Package are subject to present and future program rules, which are incorporated by reference and may be modified by VWoA at any time without notice.

Companies routinely include catch-all lines in agreements, similar to the one used by Volkswagen, that gives them permission to revise conditions after the fact. Changes might be required due to a legislative change that impacts the original conditions of an agreement. For example, people living in a certain geographic area may have been exempt from an agreement in the beginning, but legislative changes could allow that group to be included, necessitating a change in the rules.

A law firm that represents Volkswagen diesel owners doesn’t see it that way.

“We believe that both the current language and the ability to change the rules creates a non-trivial risk to consumers of foregoing future rights,” said Amy Williams-Derry, partner of Keller Rohrback L.L.P., a law firm that currently represents approximately 100 Volkswagen diesel owners.

“This means the rules of the program a VW TDI diesel customer agrees to today could be changed by VW tomorrow, without notice to consumers, and yet consumers would still be bound.”

However, Volkswagen of America says customers will not be required to release the automaker of liability nor give up their right to sue by taking the Goodwill Package.

“Affected customers eligible for the Goodwill Package are not required to waive their rights or release their claims against Volkswagen of America in order to receive the Package,” said a representative for the automaker.

Interpretations of the rules posted Monday have flummoxed even experienced law professionals.

University of Denver Law Professor Michael Siebecker pointed to the catch-all paragraph and said that it appears to apply to the Goodwill Program only — not future litigation — but that it contained obvious mistakes.

“It’s actually quite bizarre that they would publish something like this online. That’s normally something that people would get fired for — at least the lawyers who were supposed to be reviewing this should,” said Siebecker, who teaches corporate social responsibility at DU.

[Source: Goodwill Package FAQ, Program Rules]