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Class Action Lawsuit and Settlement over 2017-2018 Audi Q7 Alleged Brake Defect

Current or former owners of who purchased or leased any model year 2017 or 2018 Audi Q7 vehicles that were distributed by Volkswagen Group of America, Inc. dba Audi of America, Inc. (“Audi”) for sale or lease in the United States or Puerto Rico need to pay close attention to their rights.

Mercado v. Volkswagen Group of America, Inc. dba Audi of America, Inc., Case No. 5:18-cv-02388-JWH-SP, was filed in the United States District Court for the Central District of California on November 9, 2018. A Fifth Amended Class Action Complaint was filed on March 2, 2021.

The complaint was filed by plaintiffs on behalf of a class of owners and lessees of certain 2017-18 Model Year Audi Q7 vehicles that were distributed by Volkswagen Group of America, Inc. dba Audi of America, Inc. for sale or lease in the United States or Puerto Rico.

The deadline to opt out of the class action settlement was March 28, 2022. This deadline has now passed, which means if the settlement is approved you may not have the ability to bring an individual lawsuit over these issues. The final approval hearing is set for June 10, 2022.

The settlement website is www.BrakeNoiseSettlement.com, or you can contact the court-appointed settlement administrator at 1-844-929-2988. The affected Audi vehicles are equipped with defective braking systems that make a high-pitched noise when the brakes are used.

Status of the Class Action Litigation

The plaintiffs filed a motion for Preliminary Approval of Class Action Settlement on May 25, 2021 in Mercado v. Volkswagen Group of America, Inc. dba Audi of America, Inc. The court granted class certification for settlement purposes and appointed interim class counsel on November 1, 2021.

On November 1, 2021 the Court also preliminarily approved a class action settlement of these claims and amended that order on November 4, 2021. The terms of the settlement include, with certain conditions, extension of New Vehicle Limited Warranties to cover one front brake squealing repair; reimbursement for past unreimbursed out-of-pocket expenses paid for covered repairs; and an application for attorney fees, costs, and expenses for class counsel of up to $1,960,000.

The Court also set the following deadlines:

  • Any Settlement Class Member who wishes to be excluded from the Settlement Class must mail a request for exclusion, by first-class mail postmarked no later than March 28, 2022. The request is to be mailed to the Claims Administrator at: Brake Claims Administrator, c/o Angeion Group, P.O. Box 58220, Philadelphia, PA 19102. The settlement website is www.BrakeNoiseSettlement.com, or you can contact the settlement administrator at 1-844-929-2988. This deadline has now passed.
  • The deadline to submit objections to the settlement is April 12, 2022.
  • The Claim Administrator shall report the names and addresses of all persons and entities that submitted timely and proper Requests for Exclusion to the Court, Settlement Class Counsel and Defendant’s Counsel no later than May 16, 2022.
  • A Final Fairness Hearing will be held by this Court in the Courtroom of The Honorable John W. Holcomb, United States District Court for the Central District of California, United States Courthouse, 3470 12th St., Riverside, California 92501 at 9:00 a.m. on June 10, 2022.

All members of the approved Settlement Class that do not submit a timely and valid written request for exclusion from the class will be bound by the releases in the Settlement Agreement and other terms and conditions set forth in that Agreement, as well as all proceedings, orders and judgments in that lawsuit.

Class Members may exclude themselves from the settlement or object to the settlement, but they may not do both.

What Are Your Options

You should have by now received a notice that the case was certified by the Court to proceed as a class action for settlement purposes and of the settlement terms, and of your right to opt out of the class. You will receive a class notice describing your options.

Those options will be: (a) do nothing, in which case you may get nothing but be bound by the settlement, (b) submit a claim form if requested and get whatever relief is made available and you are also bound by the settlement, or (c) opt out and pursue your own claims, in which case you are not bound by the settlement but cannot participate in any of the relief that is being offered to class members.

The deadline to opt out of the settlement has now passed, which means if the settlement is approved you may not have the ability to bring an individual lawsuit over these issues.

For many people, a class action settlement may provide significant benefits and does not require much effort to participate. It also comes with few risks, as the claims have been resolved.

When it comes to vehicles what to do can be a complicated decision, as it can depend on many factors.  These factors include:

  • have you had other problems in addition to brake squeal?
  • has the brake squeal occurred in your vehicle?
  • have you taken it in for brake repairs on more than one occasion?
  • are you upset being left with a vehicle with squealing brakes, rather than Audi repurchasing the vehicle?
  • does the brake issue affect the safety of your vehicle?
  • do you still own the car?
  • is the car still under warranty?
  • where do you live?

Frequently Asked Questions

What is the name and case number of the class action lawsuit filed? When and where was the class action lawsuit filed?

Mercado v. Volkswagen Group of America, Inc. dba Audi of America, Inc., Case No. 5:18-cv-02388-JWH-SP, was filed in the United States District Court for the Central District of California on November 9, 2018.  A Fifth Amended Complaint was filed on March 2, 2021.

What do Plaintiffs allege in the class action lawsuits?

The plaintiffs allege that certain 2017-18 Model Year Audi Q7 vehicles are equipped with defective braking systems that make a high-pitched noise when the brakes are used.

What are the affected vehicle models identified in the class action lawsuits?

The Court has certified for settlement purposes the following Settlement Class:

All persons and entities who purchased or leased any model year 2017 or 2018 Audi Q7 vehicle that was imported and distributed by Volkswagen Group of America, Inc. for sale or lease in the United States or Puerto Rico.

Excluded from the Settlement Class are (a) all judges who have presided over the Action and their spouses; (b) all current employees, officers, directors, agents and representatives of Defendant, and their family members; (c) any affiliate, parent or subsidiary of Defendant and any entity in which Defendant has a controlling interest; (d) anyone acting as a used car dealer; (e) anyone who purchased a Settlement Class Vehicle for the purpose of commercial resale; (f) anyone who purchased a Settlement Class Vehicle with salvaged title and/or any insurance company who acquired a Settlement Class Vehicle as a result of a total loss; (g) any insurer of a Settlement Class Vehicle; (h) issuers of extended vehicle warranties and service contracts; (i) any Settlement Class Member who, prior to the date of this Agreement, settled with and released Defendant or any Released Parties from any Released Claims, and (j) any Settlement Class Member that files a timely and proper Request for Exclusion from the Settlement Class.

How many vehicles are impacted by this defect?

According to publicly available data, approximately 76,000 Class Vehicles were sold or leased.

What do the class action lawsuits claim is the cause of the defect in the vehicles?

According to Plaintiff’s allegations in the Complaint an Audi representative stated that all 2017 Audi Q7 vehicles are too heavy for the brakes installed during manufacturing, resulting in the loud squealing noise when the brakes are applied. On other occasions, Audi representatives have stated that the cause of the Brake Defect is unknown.

How does the defect violate the vehicles’ warranty?

Audi provides its owners with a New Vehicle Limited Warranty (“NVLW”), which states that Audi will cover any repairs to correct a manufacturer’s defect in material or workmanship for 4 years or 50,000 miles, whichever occurs first. The NVLW “covers any repair or replacement to correct a defect in manufacturer’s material and workmanship (i.e., a mechanical defect). Your authorized Audi dealer will repair the defective part or replace it with a new or remanufactured Audi Genuine Part free of charge.”

According to Plaintiffs’ allegations, Audi breached these express warranties by selling and leasing Class Vehicles with brakes that were defective, requiring repair or replacement within the warranty period, and refusing to honor the express warranty by repairing or replacing, free of charge, the brakes on these vehicles without correcting the underlying issue.

According to Plaintiffs’ allegations, Audi also provides its owners with an implied warranty that the Class Vehicles and their components and parts are merchantable and fit for the ordinary purposes for which they were sold. However, the Class Vehicles are not fit for their ordinary purpose of providing reasonably reliable and safe transportation because, inter alia, the Class Vehicles and the brakes suffered from an inherent defect at the time of sale and thereafter and are not fit for their particular purpose of providing safe and reliable transportation. Contrary to the applicable implied warranties, the Class Vehicles and their brakes at the time of sale and thereafter were not fit for their ordinary and intended purpose of providing class members with reliable, durable, and safe transportation.

Has Audi offered consumers anything to resolve this issue?

To date, Audi has been unable to resolve this issue, but has now offered consumers several options under the proposed class action settlement, if that settlement is finally approved. The terms of the settlement include, with certain conditions, extension of New Vehicle Limited Warranties to cover one front brake squealing repair; and reimbursement for past unreimbursed out-of-pocket expenses paid for covered repairs.

All class members that do not submit a timely and valid written request for exclusion from the Settlement Class will be bound by the releases in the Settlement Agreement and other terms and conditions set forth herein and all proceedings, orders and judgments in that lawsuit. Class Members may exclude themselves from the Settlement or object to the Settlement, but they may not do both. This deadline has now passed, which means if the settlement is approved you may not have the ability to bring an individual lawsuit over these issues.

Are Cars with the This Issue Unsafe?

According to Plaintiffs, the Brake Defect has been documented to occur without warning during vehicle operation and poses an extreme and unreasonable safety hazard to drivers, passengers and pedestrians.

The loud, high-pitched squealing noise emitted when the brakes are applied creates a safety hazard due to the potential to startle vehicle drivers, having an adverse impact on driving decisions and habits of vehicle drivers. The Brake Defect distracts the vehicle driver and third parties, endangering their physical safety and well-being due to a loss of concentration and focus on the road. Similarly, nearby pedestrians hear the loud braking noise then pay attention to the noise rather than having their full attention on other hazards in their path.

What is the status of the class action lawsuit? Has it been settled?

In Mercado v. Volkswagen Group of America, Inc. dba Audi of America, Inc., the plaintiff filed a motion for Preliminary Approval of Class Action Settlement on May 25, 2021.  The court granted class certification and appointed interim class counsel on November 1, 2021.

On November 1, 2021 the Court also preliminarily approved a settlement of these claims and amended that order on November 4, 2021, setting the following deadlines:

  • Any Settlement Class Member who wishes to be excluded from the Settlement Class must mail a request for exclusion, by first-class mail postmarked no later than March 28, 2022.  The request is to be mailed to the Claims Administrator at: Brake Claims Administrator, c/o Angeion Group, P.O. Box 58220, Philadelphia, PA 19102. This deadline has now passed.
  • The deadline to submit objections to the settlement is April 12, 2022. The settlement website is www.BrakeNoiseSettlement.com, or you can contact the settlement administrator at 1-844-929-2988.
  • The Claim Administrator shall report the names and addresses of all persons and entities that submitted timely and proper Requests for Exclusion to the Court, Settlement Class Counsel and Defendant’s Counsel no later than May 16, 2022.
  • A Final Fairness Hearing will be held by this Court in the Courtroom of The Honorable John W. Holcomb, United States District Court for the Central District of California, United States Courthouse, 3470 12th St., Riverside, California 92501 at 9:00 a.m. on June 10, 2022.

All members of the approved Settlement Class that do not submit a timely and valid written request for exclusion from the class will be bound by the releases in the Settlement Agreement and other terms and conditions set forth in that Agreement, as well as all proceedings, orders and judgments in that lawsuit. Class Members may exclude themselves from the settlement or object to the settlement, but they may not do both.

The terms of the settlement include, with certain conditions, extension of New Vehicle Limited Warranties to cover one front brake squealing repair; reimbursement for past unreimbursed out-of-pocket expenses paid for covered repairs; and an application for attorney fees, costs, and expenses of Class Counsel up to $1,960,000.

Is there anything I need to do at this time? When do I need to decide what to do?

As the Court granted preliminary approval of the settlement, by now you should have received a summary notice of the proposed settlement. The deadline to send out this notice was February 11, 2022. If you have not received a summary notice, you should visit the Mercado v. Audi settlement website or contact the settlement administrator at www.angeiongroup.com to get information on how to confirm if you were sent the settlement notice.

The notice of this settlement lists your deadlines to take action, and March 28, 2022 was the deadline set by the Court to opt out of the settlement. This deadline has now passed, which means if the settlement is approved you may not have the ability to bring an individual lawsuit over these issues.

What Happens If I Don’t Opt Out of the Class Action Lawsuit or Settlement?

It depends on how the settlement is structured, but in general if you do not opt out of the settlement you will be bound by its terms. You will receive any benefits offered in the settlement, either automatically or by submitting a claim form.  However, you will not be able to bring any individual claim for damages caused by the defect, except possibly for personal injury claims.  If that settlement is finally approved, all class members that have not submitted a timely and valid written request for exclusion from the Settlement Class will be bound by the releases in the Settlement Agreement and other terms and conditions set forth herein and all proceedings, orders and judgments in that lawsuit.

Why Should I Opt Out of Any Settlement Class?

For many people a class action provides them significant benefits without the need to spend any money or do much other than complete a claim form.  The terms of the settlement here include, with certain conditions, extension of New Vehicle Limited Warranties to cover one front brake squealing repair; and reimbursement for past unreimbursed out-of-pocket expenses paid for covered repairs. Because the matter is settled, as long as the Court approves the settlement you will only get the relief that is described in the class notice.

However, other people may decide that the relief offered as part of the class action settlement is not adequate and would prefer a full vehicle repurchase, that they do not want to wait to get relief, or that they think they will get more if they do not participate in the class action settlement.  This depends on a variety of factors, such as whether you have had other problems (in addition to the brake problem) with the vehicle, whether you can document the defect occurred in your car, whether you have taken it in for repairs on more than one occasion, whether you still own or lease the vehicle, whether it still under warranty, and where you live.

What is the Song Beverly Warranty Act?

Song-Beverly, California Civil Code §1793.2(d)(1), is a California state law that requires manufacturers to repair defects after a reasonable number of repair attempts. What is “reasonable” is not part of hard and fast rules – safety defects should be fixed immediately, for example. The defects have to be important, and must “substantially impair the vehicle’s use, value, OR safety.” Civil Code §1793.22(e)(2).

Under Civil Code §1793.2(d)(1), manufacturers are required to promptly offer repurchase or replacement of the Vehicle they cannot fix in a reasonable time frame.  In addition, Civil Code §1794(c) and §1793.2(d) provides that customers are entitled to a civil penalty in an amount up to two times actual damages if manufacturers acted “willfully” (meaning knowingly, but not necessarily with wrongful or malicious intent) in ignoring or failing its obligation under Song-Beverly.

Finally, under Civil Code §1794(d), MANUFACTURERS must pay plaintiff’s attorney’s fees and costs as part of the settlement, as the Song-Beverly Act is a pro-consumer fee-shifting statute.

What Relief Could I Get If I Opt Out and Bring an Individual Lawsuit Over the Defect?

handing keys over to carCurrent or former owners should be aware that the California lemon law and other comparable state and federal laws may force Audi to either “buy the vehicle back,” or provide other important compensation.

Under California’s lemon law, qualifying “lemons” must be bought back, and that can mean a large cash refund and payoff of your loan or lease. The refund could be as much as everything you paid for the vehicle and everything you owe: monthly payments, down payments, tax, finance charges, license and registration, etc. In fact, you could even qualify for Two-Times your money back, depending on the circumstances.

What Audi would have to buy it for has nothing to do with how much the vehicle is currently worth. There is a formula in the law, that starts with you getting all your money back, and then taking certain deductions and exclusions away from your payment. Those refunds and exclusions are difficult to understand and can be fought against by knowledgeable consumer attorneys. March 28, 2022 was the deadline set by the court to opt out of the class action settlement.This deadline has now passed, which means if the settlement is approved you may not have the ability to bring an individual lawsuit over these issues.

May I have additional rights if I am a member of the Armed Forces?

Under Cal. Civil Code 1795.8, if a person is a member of the Armed Forces the protections of the Song Beverly Act may apply, even if you purchased your vehicle outside of California, so long as the manufacturer sells vehicles in California. The member of the Armed Forces would need to show they were stationed in or a resident of California at the time they purchased the vehicle or at the time they filed a claim against the manufacturer.

What are my options if I opted out of the class action settlement?

You might have a lemon law claim for damages if you opted out of the class action settlement. For a free consultation, call 1-855-OPT-OUT1 (855-678-6881). One of our team members can explain your rights. You must have chosen to opt-out of the settlement for his option.