New York, New York

HomeNew YorkNew York

Email Eric T. Chaffin Eric T. Chaffin on Twitter Eric T. Chaffin on Facebook Eric T. Chaffin on Avvo
Eric T. Chaffin
Eric T. Chaffin
Attorney • (888) 480-1123

U.S. DOJ Files Lawsuit Against VW, Seeks Billions in Damages

Comments Off

The U.S. Department of Justice (DOJ) has filed a civil lawsuit against Volkswagen, after the company was found to have violated the Clean Air Act.

The case was filed on January 4, 2016, in the U.S. District Court for the Eastern District of Michigan. The DOJ seeks up to $48 billion in damages.

U.S. Describes VW’s Cheating Devices

In the complaint, the DOJ explains that VW installed “cheating devices” on its vehicles that allowed the vehicles to pass environmental emissions tests, but that also enabled the diesel-powered vehicles to reach fuel economy and performance standards when on the road, while emitting some toxins at levels higher than allowed by U.S. law.

The DOJ states that all the subject vehicles contain software that senses “when the vehicle is being tested for compliance with applicable emission standards,” and that during testing, the vehicle runs software logic and/or calibrations “that produce compliant emission results.” At other times of operation, however, the software runs a separate “road calibration” that “reduces the effectiveness of the emission control system.”

In other words, the DOJ states, the software causes “emission control systems to underperform (or fail to perform) when the software determines that the vehicle is not undergoing FTP [federal test procedure].”

Auto manufacturers are required to obtain “certificates of conformity (COCs)” for each vehicle sold in the U.S. To obtain these certificates, they must submit an application to the EPA, after which the EPA determines whether the vehicles comply with U.S. emission standards. VW’s COC applications described their vehicles as in compliance with U.S. regulations, and did not disclose the so-called “cheat devices.”

The complaint also notes that when the software changed to “road calibration,” nitric oxide emissions rose by a factor of up to 40 times above EPA-compliant levels, depending on the type of vehicle and where it was being driven (city, highway).

VW Admits to Intentionally Cheating on Emissions Tests

The DOJ goes on to state that VW was aware of the software devices, and how they were being used, yet repeatedly blamed the emissions issue on various technical problems and in-use conditions that could explain the higher emission test results obtained by the California Air Resources Board (CARB).

It wasn’t until September 2015 that the company admitted that the subject vehicles contained a “defeat device” in the “form of a software algorithm or algorithms that detect when the vehicle is undergoing emission testing.” The DOJ adds that their efforts to learn the truth about the emissions irregularities “were imposed and obstructed by” misleading information provided by VW.

The automaker allegedly repeatedly concealed facts that would have shed light on the real issue, even when it had a duty to share the information. It wasn’t until October 2015 that a VW representative admitted that the company’s statements blaming the issue on technical issues were false. At that time, the representative also admitted that the defeat devices were intentionally meant to deceive emissions testing.

VW Faces Billions in Fines/Penalties

This new lawsuit is one of many filed against VW since it was revealed that the “environmentally friendly” diesel-powered vehicles were fraudulently advertised. According to the complaint, the defeat devices affect about 500,000 2.0L vehicles and about 80,000 3.0L vehicles in the U.S.

VW could face penalties of:

  • up to $32,500 per vehicle for each violation occurring before January 13, 2009
  • up to $37,500 per vehicle for each violation occurring after January 13, 2009
  • up to $2,750 per “defeat device” for each violation occurring before January 13, 2009
  • up to $3,750 per “defeat device” for each violation occurring after January 13, 2009

Legal experts believe the resulting fines will be much lower than the estimated total ($48 billion), but it looks likely that the automaker may end up paying billions of dollars to remedy the situation.

Because all federally filed lawsuits against VW were recently consolidated in the Northern District of California, it is expected that this case will soon be transferred there.