Glaser Weil Represents CNCDA in High-Stakes Lawsuit Against Volkswagen and Scout Motors Over Franchise Law Violations

Glaser Weil is proud to represent the California New Car Dealers Association (CNCDA) in a major lawsuit filed in San Diego County Superior Court against Volkswagen Group of America and its affiliate Scout Motors, Inc. The complaint alleges that Volkswagen is violating California’s franchise laws by using Scout Motors to bypass its franchised dealer network and sell vehicles directly to consumers in California.

Filed on April 22, 2025, the lawsuit asserts that Volkswagen’s actions are in direct violation of Assembly Bill 473—a landmark 2023 law prohibiting automakers from using affiliated brands to compete with their own franchised dealers. Despite acknowledging to legislators that AB 473 would prohibit such conduct, Volkswagen, through Scout Motors, has accepted deposits and marketed Scout-branded vehicles to California consumers, effectively excluding its 45 franchised Volkswagen dealers from the opportunity to participate in the sale of the new Scout line.

The complaint seeks to halt Scout Motors’ unlawful direct-to-consumer sales and recover civil penalties that could exceed $35 million. It also includes causes of action for unfair competition and false advertising.

The Glaser Weil team representing CNCDA includes Litigation Partners Michael Cypers and Julie Gerchik and Associate Wogai Mohmand.

For more information, read the press release, which has a link to the complaint filed by Glaser Weil.