Less than a month after federal and California regulators announced a $14.7 billion settlement with Volkswagen A, New York and two other states have filed their own civil lawsuits charging the maker with covering up the fact that it had cheated on diesel emissions tests.
The new lawsuits could add hundreds of millions of dollars in additional costs to the various settlements VW has been trying to work out. And it could make it all the more difficult for the automaker to put the embarrassing issue behind itself.
The three states contend that VW managers, including former CEO Martin Winterkorn, knowingly covered up evidence of the subterfuge. The maker last September acknowledged it had installed a so-called “defeat device” designed to illegally pass emissions tests with its 2.0-liter diesel engine. It subsequently admitted rigging a 3.0-liter turbodiesel, as well.
Though each state filed individual actions, the suits by New York, Massachusetts and Maryland were almost identical in their wording, accusing the German maker of “unlawful conduct.” Other states could follow suit, said NY Attorney General Eric Schneiderman.
The state took action to put “all auto manufacturers (on notice) that violating laws designed to protect our environment and our public health is unacceptable and will be punished with significant penalties.”
After months of negotiations, Volkswagen last month reached a settlement with the Environmental Protection Agency, the Federal Trade Commission and the U.S. Department of Justice, as well as the California Air Resources Board, or CARB. The agreement provides $10 billion to buy back the 2.0-liter turbodiesel models sold by the VW and Audi brands in the U.S. since 2009.
(VW hopes to have compensation plan for dealers within a month. Click Here for the latest.)
Another $2 billion will go to promote zero-emissions vehicles, with $2.7 billion more targeting environmental remediation. The latter fund will be used to replace older stationary and mobile diesels around the country with newer, cleaner diesel-powered technology.
The June settlement only covers the 2.0-liter engine. A separate agreement is being negotiated for the 3.0-liter VW diesel used by the Volkswagen, Audi and Porsche brands. VW has expressed its belief it will be able to bring those models into compliance with federal and California emissions laws and avoid another buyback – though CARB last week rejected one proposed fix.
(For more on the VW settlement, Click Here.)
A statement by Volkswagen said the claims made by the three new state lawsuits are “not new,” adding that, “It is regrettable that some states have decided to sue for environmental claims now, notwithstanding their prior support of this ongoing federal-state collaborative process.”
The first sign of problems with VW’s popular diesel engines came in 2014, when testing by West Virginia University found the vehicles appeared to be using software to control emissions while undergoing tests. In real-world conditions, however, they could produce as much as 35 times more smog-causing oxides of nitrogen, according to WVU researchers.
The EPA subsequently began discussing the problem with VW, though the maker only acknowledged the subterfuge last September.
Internally, there is evidence that some senior managers, including former VW CEO Winterkorn and now-ousted global marketing chief Christian Klingler, knew about the use of a defeat device, the NY lawsuit claims.
Winterkorn is one of the VW managers under investigation as part of probes in both Germany and the U.S. Despite the $14.7 billion settlement, a senior Justice Department official last month described the agency’s criminal probe as ongoing.
(Germany says it won’t fine VW for cheating on diesel emissions. Click Here for the story.)
