The U.S. Department of Justice, on behalf of the U.S. Environmental Protection Agency, has filed a far-reaching civil complaint in federal court in Detroit, Michigan, against Volkswagen AG.
The lawsuit is aimed at forcing Volkswagen AG, and its various subsidiaries including Audi, Porsche and the Volkswagen brand, to recall more than 600,000 vehicles equipped with 2.0- and 3.0-liter diesel engines. The maker has admitted it installed a so-called defeat device in the smaller engines to rig emissions tests. It also violated federal law with the larger turbodiesels.
While the government did not set a specific figure, the Clean Air Act spells out penalties that could top $18 billion for the smaller engine, $3 billion more for the 3.0-liter diesel. Meanwhile, the Justice Department could take further action as part of an ongoing criminal investigation. And hundreds of civil suits filed by owners, dealers and others have been consolidated into a case that will be heard by a federal court in California.
“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,” said Assistant Attorney General John C. Cruden for the Justice Department’s Environment and Natural Resources Division. “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.”
The complaint not only charges VW with surreptitiously cheating on emissions tests, but also further alleges the German maker violated the Clean Air Act by selling, introducing into commerce, or importing into the United States motor vehicles that are designed differently from what Volkswagen had stated in applications for certification to EPA and the California Air Resources Board, or CARB.
VW acknowledges using the defeat device software in 11 million vehicles sold around the world. It was planning to introduce a fix in other countries, starting this month. The maker has been in negotiations with the EPA for months trying to come up with an acceptable solution for the U.S. market, which has some of the world’s most stringent diesel emissions standards. So far, however, the two sides have not been able to come to an agreement, something that apparently led to the filing of the lawsuit by the Justice Dept.
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“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,” said Cynthia Giles, assistant administrator for enforcement and compliance assurance at EPA. “So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action.”
The complaint alleges that the defeat devices cause emissions to exceed EPA’s standards during normal driving conditions. At times, the diesels can produce as much as 40 times more smog-causing oxides of nitrogen than the standard permits. The Clean Air Act requires vehicle manufacturers to certify to EPA that their products will meet applicable federal emission standards to control air pollution. Motor vehicles equipped with illegal defeat devices cannot be certified.
“VW’s illegal defeat devices have resulted in thousands of tons of excess NOx emissions in California, a state where more than 12 million people live in areas that exceed air quality standards set to protect public health,” said CARB Chair Mary D. Nichols. “The California Air Resources Board is fully coordinating its investigation with the federal EPA and DOJ to address the environmental harm VW has caused.”
In total, approximately 499,000 2.0 liter diesel vehicles using the illegal software were sold in the United States since the 2009 model year, according to the EPA. The complaint further alleges that Volkswagen also equipped 85,000 3.0- liter vehicles with software that senses when the vehicle is undergoing federal emissions testing.
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Though somewhat different from the approach used with the smaller engine, this system was designed to trim emissions during testing, while otherwise producing about nine times the permissible level of NOx.
NOx pollution contributes to harmful ground-level ozone and fine particulate matter. These pollutants are linked with asthma and other serious respiratory illnesses that can lead to premature death. Children, the elderly, and people with pre-existing respiratory disease are particularly at risk.
A civil complaint does not preclude the government from seeking other legal remedies. And there is a strong possibility the Justice Department will yet take criminal action. Who might be charged is uncertain. Reporting on a preliminary internal investigation, VW’s new CEO Herbert Dies has said the problem was largely limited to a handful of rogue engineers. That position has been greeted with widespread skepticism, however.
The financial burden facing VW could be yet more severe. The company has been hit by more than 450 different civil lawsuits, including those claiming loss of value for vehicles equipped with the suspect diesel engines. A multi-judicial panel recently decided to have most of those cases consolidated and then heart by a federal judge in San Francisco.
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VW has so far set aside more than $7 billion to cover the cost of the diesel scandal. It has also lined up a $20 billion credit line. Some analysts have put the eventual price tag at $50 billion or more, raising serious questions about the maker’s long-term health.
Paul A. Eisenstein contributed to this article.
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