3G Telematics Case vs. Audi, VW Deletes Claims vs. Their German Parents

The consolidated class action amended complaint, filed Friday, alleging Volkswagen Group of America (VWGoA) declined to upgrade the telematics equipment in Audi and VW vehicles they distributed in the U.S. for the shutdown of 3G wireless services deletes the Audi and VW German parent companies as defendants. The German parents never were “validly served,” so a Rule 41(a) dismissal notice “is not required,” plaintiffs’ attorney Lee Squitieri of Squitieri & Fearon wrote U.S. Magistrate Judge Edward Kiel for U.S. District Court for New Jersey in a letter Friday (docket 2:22-cv-05896).

Squitieri was weighing several options for serving Audi and VW in Germany, including through diplomatic channels under The Hague Convention, he told U.S. District Judge Esther Salas last month (see 2302240001). He was also considering dismissing the German defendants voluntarily without prejudice, he said then, and that’s a form of the option he ultimately picked.

Lawyers for seven plaintiffs in an unrelated antitrust class action in Chicago that seeks to vacate T-Mobile’s 2020 Sprint buy have been trying unsuccessfully for months to serve T-Mobile’s German parent Deutsche Telekom. The parties in that case told the court last week that personal service of DT in Germany was expected to drag on for at least two to three more months due to the intricate demands of the German court (see 2303240028). Their quest to serve DT in Germany began in August.

The newly consolidated complaint against VWGoA names nine plaintiffs who brought the action on behalf of themselves and members of their proposed class who bought or leased any Audi or VW model whose telematics “were rendered wholly or partially inoperable” when the major cellphone carriers phased out 3G beginning in early 2022, said the class action. The plaintiffs include Eileen Raposa and Michael Raffo, who sued VWGoA individually in the two complaints that are now consolidated.

Some of the Audi models with newly incapacitated roadside services or other functions that were 3G-dependent date to the 2012 model year and run through 2019, said the complaint. The oldest affected VW models date to 2014 and also run through 2019, it said. There could be more than a million members of the class based on VW’s “own public sales figures of vehicles sold with 3G telematics,” it said.

All manufacturers of 3G devices “have long known” that 3G was spectrally inefficient, “and would be phased out as early as possible," said the complaint. Defendant VWGoA “knew of the imminent obsolescence of 3G and that industry standards were rapidly advancing,” but it did nothing to adapt its legacy vehicles for the evolution to 4G, the complaint said.

There was “no disclosure or even suggestion” that roadside services “would be rendered obsolete once 3G was phased out” or that the services “were only temporary or had only a limited life,” said the complaint. For vehicles offered for sale in more recent model years “after 4G became prevalent,” VWGoA “never disclosed that its equipment was one generation behind the standard,” it said.

Audi and VW “knew of imminent new generations of wireless technology and could have manufactured telematics adaptable to the next generation,” said the complaint. They were founding members in September 2016 with Daimler and five major 5G patent holders of the 5G Automatic Association, created to connect the telecom industry to vehicle manufacturers to develop end-to-end solutions for future mobility and transportation services, it said.

VWGoA “could have but chose not to design, build or install telematics with downloadable software or physical spare parts,” said the complaint. Those fixes would have enabled the obsolete telematics equipment built into many Audi and VW vehicles “to continue to connect” to wireless generations following 3G, it said. VWGoA “had the capability to retrofit its 3G telematics and did so once 3G became the prevalent technology, but refused to design the 3G telematics to be retrofitted,” it said.

The 3G phaseout won't "necessarily automatically disable all devices working on that protocol” as it has with telematics equipment in cars, said the complaint. The iPhone 3GS, for example, can connect to Wi-Fi to access internet applications even after the 3G phaseout, it said. Google’s Pixel 2 was released in October 2017 with hardware and software that could support 4G and had been “pre-armed” with 4G compatibility as early as March 2017, the complaint said. While Audi and VW continued to install, promote and sell the 3G only devices, “the major cellular providers have been preparing for years” for the evolution to 4G and 5G, it said.