Volkswagen’s TDI Recall And The Epidemic Of Corporate Secrecy

 BY MAX KENNERLY, ESQ.

As everyone knows by now, Volkswagen admitted that nearly 482,000 of its “clean diesel” cars were actually pollution monsters equipped with special software designed to evade government emissions testing. As The Guardian reported, an analysis suggests that the amount of pollution caused was “roughly the same as the UK’s combined emissions for all power stations, vehicles, industry and agriculture.”

BuzzFeed rounded up news on the many class action lawsuits that have been filed, quoting me as saying, “the car you own is not the car you thought you bought. … Whenever you sell these things, you’re going to lose some value.” At the moment, it’s hard to know where to start on that value. Certainly, the cars will lose value when the fixes imposed by the recall are installed, because they’ll likely have worse mileage and lower horsepower. But there might be even greater economic harm than that, and the answer depends on why Volkswagen embarked on such a massive fraud.

As ThinkProgress notes,

The most likely answer is that the pollution controls probably had a negative impact on the car’s overall durability — they made the engines run hotter, made the cars wear out faster, and caused the car to get worse gas mileage than it would have without the pollution controls.

If that’s the case, then the damage is even greater than just a loss in horsepower or mileage. The cars just won’t be as durable and reliable as they should be. It’s difficult to imagine what could be more harmful to the resale value of a car than a generalized loss of reliability. Nobody buys a diesel Volkswagen to race it on the track with a maintenance crew on hand; consumers buy them for everyday use.

The most incredible part of this story is just how blatant the scam was, and how Volkswagen was able to do it for six years without anyone being the wiser. The scam wasn’t even exposed by a whistleblower, but by West Virginia University’s Center for Alternative Fuels, Engines and Emissions, which discovered the problem while actually trying to show the benefits of diesel passenger vehicles by way of testing a BMW, a VW Passat, and a VW Jetta.

The EPA is now addressing the problem, but they deserve some blame for the problem happening in the first place. Volkswagen didn’t cheat the emissions tests with some sort of crafty mechanical device, but with evasive software programming. Car manufacturers have for years been using the Digital Millennium Copyright Act to prevent anyone — ranging from car owners to public interest groups — from taking a peek at the software that runs vehicles. As Mother Jones reported,

With these concerns in mind, the Electronic Frontier Foundation asked for a pair of car-related exemptions from the DMCA. One would let security researchers investigate the software in cars; the other would let car owners tinker with and repair their cars. Unsurprisingly, the Auto Alliance—a trade group including VW’s North American unit—filed extensive comments against both, arguing in large part that the black boxes need to stay sealed to keep everyone safe. It asserted that “encouraging modification will lead to more, not fewer cars on the road that are out of compliance with federal emissions and fuel economy standards.” What’s more, carmakers persuaded the EPA to write a letter to the Copyright Office opposing the exemption. The EPA argued that being able to invoke copyright law would help it enforce environmental laws against mechanics who modify cars in ways that improve performance but increase emissions.

Read that again: the EPA opposed allowing consumers to investigate how the software in their own vehicles worked because it could interfere with emissions policies. The end result is a pollution scandal far worse than anything that could have been caused by a handful of mechanics modifying vehicles.

Thankfully, at least one government agency has come to understand that the car manufacturers can’t be trusted to keep the public interest in mind. The National Highway Traffic Safety Administration published a guidance document to address an issue I’ve been complaining about for years: how large corporations (particularly car and tire manufacturers) use “confidentiality” in civil litigation to shield their malfeasance. As the new guidance document says, “To the extent protective orders, settlement agreements, or other confidentiality provisions prohibit information obtained in private litigation from being transmitted to NHTSA, such limitations are contrary to Rule 26 of the Federal Rules of Civil Procedure, its state corollaries, and sound principles of public policy.” Sean Kane, who has been beating this drum louder and longer than I have, has more on the proposal. As he says, “We all know that there are great stinking piles of corporate malfeasance moldering under seal in courtrooms all over this great nation.”

The real question is why we as a society tolerate any of this nonsense in the first place, and why we exalt the supremacy of corporate secrecy over everything else. Corporations exist to make money; we shouldn’t keep acting surprised when they end up taking the profit-incentive too far and breaking the law. The VW scandal isn’t anything new, it’s just the most recent scandal. This will happen again.

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