The Justice Department sued Volkswagen AG,
accusing the German automaker of installing illegal devices meant to defeat
emissions testing on nearly 600,000 vehicles, marking another blow against the
company which has been rocked by the pollution scandal since September.
The complaint filed Monday in federal court in
Detroit is the first case against the company brought by the Justice
Department, which is also investigating the carmaker for possible criminal
conduct related to the devices.
The biggest possible penalty under the complaint
could be against Volkswagen on all of the alleged violations for all of the
cars. However, judges rarely impose the maximum penalty and some of the alleged
violations could be considered to be overlapping, bringing down any final
amount, a senior Justice Department official said. Nevertheless, the penalties
requested against the company would clearly be in the billions of dollars,
another official said.
"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," Assistant
Attorney General John Cruden said in a statement.
Volkswagen admitted in September that it had
rigged some diesel engines so that emissions controls only came on during
testing. Those controls shut off while the car was on the road, producing
nitrogen oxide emissions well in excess of the U.S. legal standard. Since then,
the company has said that the cheating software was installed in 11 million
vehicles worldwide. The company, which has so far set aside 6.7 billion
euros for recalls of diesel cars, has gradually made progress in dealing with
the crisis. The automaker is nearing regulatory approval for a low-cost fix for
some 8.5 million cars in Europe.
The Justice Department complaint includes
additional vehicles with larger engines, including some Porsche and Audi
models, that Volkswagen admitted in November also contained modes that could be
considered defeat devices.
The Environmental Protection Agency, which in
September announced Volkswagen violated federal law by using the defeat
devices, said that talks with the company about repairing the affected vehicles
hadn’t been resolved.
“So far, recall discussions with the company
have not produced an acceptable way forward," Cynthia Giles, assistant
administrator for enforcement and compliance assurance at EPA, said in the
statement.
The Justice Department is seeking an order
requiring Volkswagen to take “appropriate steps,” including mitigating nitrogen
oxide emissions. Such steps might include forcing Volkswagen to install
equipment to reduce pollution or buy back vehicles from owners. To obtain such
an order, the government would have to spell out what it’s seeking in a
separate filing later.
The government is seeking to add the case to
consumer and investor lawsuits now before a federal judge in San Francisco for
pre-trial proceedings.
Volkswagen is working with all government
agencies investigating its diesel engines for possible violations of the Clean
Air Act, company spokeswoman Jeannine Ginivan said in an e-mailed statement.
It’s also developing an independently administered program to compensate
consumers for their economic losses, she said.
“Volkswagen will continue to work cooperatively
with the EPA on developing remedies to bring” the affected vehicles into full
compliance with regulations as soon as possible, Ginivan said. The
company has suspended sales of its diesel vehicles in the U.S. until the matter
is resolved.
The complaint includes four alleged violations
for each vehicle: selling cars without EPA emissions certifications, selling
cars with the so-called defeat devices, tampering with the engines and failing
to report the existence of the defeat devices.
Under the Clean Air Act, each of those
violations could result in a penalty of up to $32,500 or $37,500 depending on
when the violation occurred. That means that each of the approximately 580,000
cars sold by Volkswagen in the U.S. that had defeat devices could, in theory,
be hit with four separate penalties, according to the Justice Department
official.
In addition to Volkswagen, the lawsuit also
names company units Audi AG, Porsche AG and Porsche Cars North America as
defendants. The U.S. said the violations involved car models from 2009 to 2016
including some Volkswagen Jettas, Golfs and Passats, as well as the Audi A6 and
A7 Quattro.
Volkswagen presented California regulators with
a proposal to make its 2.0-liter diesel engines compliant with pollution
standards on Nov. 20. The EPA and California’s Air Resources board have been
evaluating VW’s proposed fixes. CARB has said it will formally respond to the
plan no later than Jan. 14. EPA hasn’t given any timetable for its response.
VW won approval from European regulators in
December for a plan to repair emissions controls on about 8.5 million vehicles
with 1.2-liter, 1.6-liter and 2.0-liter engines. The 2.0-liter engines in the
European Union’s 28 national markets will need only a software patch, VW said.
The case is U.S. v. Volkswagen AG, 16-cv-10006,
U.S. District Court, Eastern District of Michigan (Detroit).
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