DOJ sues Volkswagen for billions in emissions scandal

Source: Ariel Wittenberg, E&E reporter • Posted: Tuesday, January 5, 2016

The Justice Department yesterday filed a lawsuit seeking billions of dollars in penalties from Volkswagen, Audi and Porsche for violations of vehicle emissions standards.

The complaint, filed on behalf of U.S. EPA in U.S. District Court in Detroit, alleges that Volkswagen installed illegal devices in nearly 600,000 diesel-engine vehicles since 2009, resulting in emissions exceeding federal standards.

DOJ also alleges that the company violated the Clean Air Act by putting cars on the market that were different from those EPA had cleared for sale. The carmaker did not include the so-called defeat devices in vehicle design descriptions submitted to EPA for certification.

“Car manufacturers that fail to properly certify their cars and that defeat emission control systems breach the public trust, endanger public health and disadvantage competitors,” Assistant Attorney General John Cruden for the Justice Department’s Environment and Natural Resources Division said in a statement. “The United States will pursue all appropriate remedies against Volkswagen to redress the violations of our nation’s clean air laws alleged in the complaint.”

Claims of defeat devices first came to light this fall when EPA issued multiple violation notices to Volkswagen, Audi and Porsche after it was discovered that Volkswagen had installed software that would skirt federal emissions tests (Greenwire, Sept. 18, 2015). The software was programmed to determine when the vehicles were undergoing federal emissions tests, only turning on the cars’ full pollution controls when government regulators were examining them. Without the full controls when the cars were not being tested, the vehicles emitted nitrogen oxides at levels of up to 40 times EPA standards, according to the agency.

“With today’s filing, we take an important step to protect public health by seeking to hold Volkswagen accountable for any unlawful air pollution, setting us on a path to resolution,” Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance, said in a statement.

After first denying the claims, Volkswagen officials admitted in September that the company had installed the software on some 11 million vehicles worldwide.

In a statement, Volkswagen spokesman John Schilling said today that the company “will continue to work with the EPA on developing remedies to bring the … vehicles into full compliance with regulations as soon as possible.”

He also noted that Volkswagen has hired attorney Kenneth Feinberg to assess customers’ legal claims.

“We will continue to cooperate with all government agencies investigating these matters,” Schilling said.

The civil suit does not preclude the federal government from seeking criminal charges against the company. EPA and the California Air Resources Board, which was involved in the investigation, are still in talks with Volkswagen over potential remedies and recalls.

Giles said the talks will continue, but added, “So far, recall discussions with the company have not produced an acceptable way forward.”

The lawsuit filed today asks the court to order Volkswagen, Audi and Porsche to pay up to $116,250 for each vehicle that violated the Clean Air Act.

Those fines would include penalties for installing the defeat devices, misrepresenting vehicles on EPA documents, and lying to EPA investigators about the cause of emissions violations once the agency discovered that vehicles had different pollution levels during in-lab and on-road testing.

“The United States’ efforts to learn the truth about the emission exceedances and other irregularities … including whether VW had committed the violations of federal law alleged herein, were impeded and obstructed by material omissions and misleading information provided by VW entities,” the complaint says. Further, it states, “VW entities … knowingly concealed facts that would have revealed the existence of the dual-calibration strategy … to regulators when they had a duty to share such information, and also engaged in affirmative misrepresentations and took affirmative actions designed to conceal these facts.”