Two East Coast Volkswagen dealers have filed a class action lawsuit against Volkswagen Group of America (VWoA) over its planned direct-to-consumer sales model for Scout-branded vehicles. The case was filed on March 3, 2026, in the U.S. District Court for the Eastern District of Virginia.

The lawsuit focuses on Volkswagen’s standard Dealer Agreement and its incorporated “Standard Provisions.” According to the complaint, these agreements require VWoA to “sell and deliver Authorized Products to Dealer in accordance with this Agreement.” The dealers also cite a provision requiring Volkswagen to avoid deceptive, misleading, or unethical business practices. 

The plaintiffs allege that VWOA is violating its standard Dealer Agreements by attempting to sell Scout vehicles directly to consumers, and that as a result, Defendants are engaging in unfair and unethical conduct by “violating  the customary practice of OEMs in the automotive retail industry of selling new vehicles solely and exclusively through a nationwide network of duly authorized and franchised Volkswagen dealers.”

The lawsuit states that more than 150,000 consumers have already placed reservations for Scout vehicles. The plaintiffs allege that the amount in controversy exceeds $5 million.

The named plaintiffs include Volkswagen dealers in New York and Connecticut, but the case is filed as a nationwide class action on behalf of all similarly situated Volkswagen dealers.

If the court certifies the proposed class, Minnesota Volkswagen dealers would automatically become part of the case unless they opt out. That means the outcome of this litigation could directly affect their contractual rights and relationship with Volkswagen.

MADA will continue to monitor the case and report on key developments.