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Volkswagen slapped with federal lawsuit in emissions-cheating scandal

The U.S. Justice Department filed a civil lawsuit against Volkswagen for allegedly violating the Clean Air Act by installing illegal, emissions-cheating devices (Video: Reuters, Photo: STEVE MARCUS/Reuters)
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The Obama administration stepped up its legal attack against Volkswagen on Monday, filing a lawsuit that accused the German automaker of violating U.S. air-pollution laws with its scheme to install emissions-cheating software in its diesel engines.

The civil complaint filed by Justice Department officials in Detroit seeks unspecified damages stemming from the car company’s use of “defeat devices” on more than 600,000 diesel engines sold in the United States under the Volkswagen, Audi and Porsche brands.

“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,” John C. Cruden, the attorney general for the 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.”

The suit is the latest legal salvo against Volkswagen, which acknowledged in September that some of its light-duty diesel vehicles had been equipped with software that thwarted emissions-control tests. The software allowed the engines to burn more cleanly when the vehicles’ computers detected that an emissions test was underway.

The lawsuit alleges that the defeat devices allowed Volkswagen models to emit far higher levels of nitrogen oxide than the law allows, violating the Clean Air Act and resulting in “harmful air pollution” in the United States.

Town that built Volkswagens remains defiant.

The emissions scandal, which prompted the resignation of chief executive Martin Winterkorn last fall, was initially limited to 2.0-liter diesel engines. Subsequent investigations expanded the list of affected vehicles to more than 11 million worldwide, including a number of 3.0-engine models.

The Environmental Protection Agency, which filed the initial notice of violation against Volkswagen in September, said the additional action was warranted because the car company still had not responded adequately to fix the problem.

“So far, recall discussions with the company have not produced an acceptable way forward,” said EPA assistant administrator Cynthia Giles, of the agency’s Enforcement and Compliance Assurance office. “These discussions will continue in parallel with the federal court action.”

There was no immediate response to the lawsuit from Volkswagen. Company officials have acknowledged that “misconduct” occurred, and have earmarked more than $7 billion for making repairs to affected automobiles.

The lawsuit filed on Monday seeks “injunctive relief” and unspecified civil penalties, according to a Justice Department statement. The Obama administration has stopped short of filing criminal charges against Volkswagen, although U.S. officials say additional legal measures are possible.

VW chief apologies for the emissions scandal.

Carl Tobias, a University of Richmond law professor, said it could take many more months to complete the ongoing criminal probe and sort through claims of fraud and economic loss being explored by attorneys and government officials in the United States and Europe.

“The civil case shows how seriously the government takes these defeat devices and VW’s underlying behavior,” said Tobias, who holds the university’s Williams Chair in Law. He said the penalties sought would likely be in the billions of dollars, as a “message to VW and any others in the auto industry that may be tempted to engage in similar behavior.”

“The bottom line is the U.S. wants to make clear that it will strictly enforce pollution laws and severely punish violators,” he said.

The affected vehicles include five Volkswagen models and six Audis made between the 2009 and 2016 model years, as well as Porsche Cayenne diesel models made in the last three model years. EPA officials said all the vehicles were designed to pass U.S. emissions tests, while emitting levels of nitrogen oxide up to 40 times above federal limits during normal driving. Nitrogen oxide has been shown to contribute to asthmatic attacks and respiratory diseases,  particularly among children and the elderly, and is a contributor to urban smog.

Environmental and public health groups called on the Obama administration on Monday to seek hefty penalties.

“Volkswagen endangered the health of people and our planet with deceitful marketing and toxic pollution,” said Michael Brune, executive director of the Sierra Club, an environmental nonprofit. “Now, it’s time that Volkswagen focus on building clean electric vehicles that don’t make our families sick and our air dirty. You can’t cheat on tailpipe emissions tests if there are no tailpipes.”

Volkswagen's highest-end brands are now being dragged in to the company's emissions scandal. (Video: Reuters, Photo: TOBIAS SCHWARZ/Reuters)