Volkswagen faces billions in penalties as U.S. sues for environment violations

Mon Jan 4, 2016 3:16pm EST
 
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By Julia Edwards and Joel Schectman

WASHINGTON (Reuters) - The U.S. Justice Department on Monday filed a civil lawsuit against Volkswagen AG (VOWG_p.DE: Quote) for allegedly violating the Clean Air Act by installing illegal devices to impair emission control systems in nearly 600,000 vehicles.

The allegations against Volkswagen, along with its Audi and Porsche units, carry penalties that could cost the automaker billions of dollars, a senior Justice Department official said. VW could face fines in theory exceeding $90 billion – or as much as $37,500 per vehicle per violation of the law, based on the complaint. In September, government regulators initially said VW could face fines in excess of $18 billion.

"The United States will pursue all appropriate remedies against Volkswagen to redress the violations of our nation's clean air laws," said Assistant Attorney General John Cruden, head of the departments environment and natural resources division.

The Justice Department lawsuit, filed on behalf of the Environmental Protection Agency, accuses Volkswagen of four counts of violating the U.S. Clean Air Act, including tampering with the emissions control system and failing to report violations.

The lawsuit is being filed in the Eastern District of Michigan and then transferred to Northern California, where class-action lawsuits against Volkswagen are pending.

"We're alleging that they knew what they were doing, they intentionally violated the law and that the consequences were significant to health," the senior Justice Department official said.

The Justice Department has also been investigating criminal fraud allegations against Volkswagen for misleading U.S. consumers and regulators. Criminal charges would require a higher burden of proof than the civil lawsuit.

The civil lawsuit reflects the expanding number of allegations against Volkswagen since the company first admitted in September to installing cheat devices in several of its 2.0 liter diesel vehicle models. The U.S. lawsuit also alleges that Volkswagen gamed emissions controls in many of its 3.0 liter diesel models, including the Audi Q7, and the Porsche Cayenne.   Continued...

 
The logo of German carmaker Volkswagen is seen at a VW dealership in the Queens borough of New York, September 21, 2015. REUTERS/Shannon Stapleton