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Justice Department Sues VW Over Diesel Emissions Cheating

Feds want recall of 600,000 vehicles; fines could reach into the billions.

by on Jan.04, 2016

VW CEO Herbert Dies' assertion that the installation of defeat devices was the work of rogue engineers wasn't enough to fend off a lawsuit from the U.S. government.

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.

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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.

(Volkswagen scandal will kill diesel sales in affected markets, supplier predicts. For more, Click Here.)

“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.

(Click Here for details about VW’s efforts to change how its perceived by cutting “Das Auto” campaign.)

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.

(To see more about VW hiring victim compensation expert Kenneth Feinberg, Click Here.)

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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4 Responses to “Justice Department Sues VW Over Diesel Emissions Cheating”

  1. GT101 says:

    It’s pretty obvious that the talking heads are not concerned with justice they are out to crucify VW for a trivial exhaust emissions issue. The U.S. is the ONLY country in the world to suggest billion dollar fines for a minor emissions issue that was perpetuated by a small group of programmers and engineers within VW. I hope VW hires a very competent law firm to have the majority of punitive and meritless lawsuits dismissed and that sanity prevails in the end – because the U.S. and EU economies are hinged on fair and appropriate punishment for a trivial issue. I’m all for holding everyone accountable for their actions including the abuse and misuse of power by the EPA.

    The EPA has already cost VW it’s suppliers, investors, etc. billions in damages even though none of these people had any hand in the minor exhaust emissions violation that hurt no one, contrary to the grandstanding by the EPA. Wait until they have to prove their claims in court and things won’t be anything like what they are claiming in the media.

    It’s simply amazing to see the disgraceful actions by so many bottom feeders against VW yet GM gets away with killing 100+ people and there is hardly any discussion over this horrendous act. It’s quite clear that VW is unlikely to get fair treatment by the U.S. judicial system if these gold diggers can cash in.

    We’ve seen how incompetent the DOJ has been in the past. It would be nice to see justice actually prevail for a change instead of the third world so called justice we often see in the U.S. judicial system but I’m not holding my breath.

  2. Chris Holman says:

    How in the world can you continue your un-American diatribe are you German? These people are not being picked on they CHEATED! I hope the EPA finally puts an end to hitlers people car once and for all. You never address the impact on the manufacturers that did not CHEAT but suffered lost sales to a CHEATING COMPANY, these are AMERICANS losing sales and jobs to a foreign CHEATING outfit. Who are you referring to as bottom feeders ? The victims? I sure do support America’s DOJ and the AMERICAN companies and their employees, perhaps you should consider a move.

  3. GT101 says:

    Chris –

    Sorry man but you are so in DENIAL…

    You don’t even seem to be able to follow the discussion. I and other folks here can’t believe your misguided POV. You may recall Paul did a double take on your distorted view of reality and Biz/U.S. jobs? I’ve taken the time to explain to you where you were wrong and that you’re still fighting a war that ended 70+ years ago. You appear oblivious to all of it as if you are a cult member that can’t think clearly.

    I hope you’re not being held hostage by GM and being threatened with death if you don’t pen totally absurd hate toward VW for WW II. Perhaps the Japanese who bombed Pearl harbor are holding you hostage and forcing you to pen delusional hate towards VW for what Hitler did? Whatever the situation your POV is not shared by many if anyone else because it is irrational and baseless.

    What part of right and wrong do you NOT understand? Do you understand that PATRIOTISM has absolute NOTHING to do with right or wrong or the overblown political attack on VW for a minor ex. emissions issue? I have explained to you that VW actually manufactures cars in Chattanooga, TN. Tennessee is a U.S. state in the south that employs U.S. labor in it’s VW factory. VW has hundred of U.S. dealers in the U.S. that employ U.S. employees. Suppliers to VW’s Chattanooga factory are U.S. employees right here in the U.S.A. NONE of these innocent people should suffer because the EPA is out of control. Unfortunately these people’s lives are being turned upside down because the EPA is on a witch hunt. What part of this don’t you understand? Do you think it is right for U.S. workers or any workers should be punished by the EPA when they had NOTHING to do with the trivial software issue?

    What part of people’s lives being compromised by the over zealous abuse to VW by the EPA don’t you understand? What part of U.S. workers losing their jobs if VW was to go out of business, do you NOT understand? Where did you come up with the meritless belief that U.S. workers were losing there jobs because consumers bought VW diesel powered vehicles and VW Passats manufactured in Chattanooga, TN in the U.S.A.?

    You have some war time hate that is blinding you to reality. No one in the U.S. lost their job prior to the EPA attack on VW, from anyone buying a VW diesel – BUT THEY WILL NOW! You can be 100% certain that the EPA has already cost U.S. workers their jobs by the outlandish threat of billions in fines for jaywalking. The higher the EPA fine, the more people in the U.S. and around the world lives will be damaged. Think about that for a minute… Investors who held VW stock have lost 25+ percent of their investment. How would you like the EPA to steal 25% of all that you own? All the money that VW has to pay in fines will reduce the number of U.S. jobs they have already created in the U.S. and elsewhere.

    We have a world ECONOMY and consumers in the U.S. and many other places are free to buy whatever products they desire. No one held a gun to any VW buyer’s head and forced them to buy a VW. No one with a clue would get rid of their VW diesel based on a trivial exhaust emissions violation that is corrected with a minor software update – at no charge. NO ONE was truly harmed by this improper software despite the sensational claims – until people’s lives were turned upside down by the EPA’s totally inappropriate response to the illegal software. I am all for punishing the people who as you call it “cheated”. That however does not mean persecution of VW the corporation and everyone else who had absolutely nothing to do with the illegal software. The EPA’s abuse of innocent people isn’t even remotely acceptable or appropriate as these are the TRUE victims in this persecution. Punish the CRIMINALS not the victims!

    There are very few VW customers who are real victims in this matter as VW is correcting all issues with all vehicles. No one lost money unless they traded or sold their vehicle while the media is sensationalizing the matter and avoiding the GM defective lawsuit that killed 100+ people. Do you understand that VW has offered ALL VW diesel owners affected in the U.S. a free $500 cash card and an additional $500 credit for service or parts or purchase? So where are these VICTIMS that you speak about? Who are they? I’d like to know.

    Oh, I get it, you think the 100+ people KILLED by GM’s defective ignition switch, were actually driving VW diesels, right? That’s the only way your rant would make any sense. So you actually think that VW killed the 100+ U.S. commuters when in fact it was GM who KILLED the 100+ people and covered up the defective ignition switch. Do you think GM CHEATED or is it perfectly OK with you for GM to KILL 100+ people by covering up a defective ignition switch?

    BTW, no I am not German but I am ashamed of people like you who hate and who are unable to understand right from wrong. You clearly believe that it’s acceptable for the EPA to destroy the lives of millions of innocent people who had nothing to do with the small group of people at VW who installed the bogus software. This is clear abuse of power. The punishment should fit the crime. The damage already done by the EPA outweighs the crime by billions of dollars before any fines are paid and before any bottom feeder plead their cases in court. You should be ashamed to even call yourself an American, if you are one. You really need to consider those ethics, economy and English comprehension classes so you can get a grip on reality because you are really confused.

    • MrHasBean says:

      Man I couldn’t have said it any better. The EPA and the US press are also very selective about who they go after in a big way. Caterpillar, Detroit Diesel, Mack, Cummins, Ford, GM – they’ve all at various stages been caught cheating tests, yet how much negative press did they get? How much is GM getting over these deaths? How much have any of the US manufacturers been lambasted over any of their serious failures? This has been blown out of proportion purely because VAG has become a force in the automotive world and America doesn’t like it.