Volkswagen sued by US justice for environment violations
Jan 04, 2016 09:11 PM EST
The U.S. Justice Department has filed a civil lawsuit against Volkswagen AG over the allegations that the German carmaker installed illegal special software in vehicles to cheat emissions tests.
The lawsuit was filed in federal court in Detroit, with the Department of Justice acting on behalf of the Environmental Protection Agency (EPA). The civil complaint claims that Volkswagen violated the Clean Air Act by installing illegal devices in almost 600,000 diesel vehicles in the U.S.
According to NPR News, the EPA's assistant administrator for enforcement and compliance assurance Cynthia Giles says in a press release that the lawsuit is an important step to protect public health by seeking to hold Volkswagen accountable for any unlawful air pollution.
Giles added that the EPA has not yet reached an acceptable agreement with the German company over how to handle a recall. She said that the recall discussions will continue in parallel with the federal court action.
In September last year, Volkswagen admitted installing "defeat device" on 11 million vehicles globally, after an investigations by the U.S. regulators. Volkswagen's vehicles were actually putting up to 40 times more pollution into the air than is allowable under U.S. standards.
The scandal hit Volkswagen's sales worldwide, according to BBC News. The company has set aside $7.25 billion to deal with the scandal. Volkswagen will begin recalling millions of cars worldwide soon. The company had its first quarterly loss for 15 years, of $2.71 billion in October 2015. The company's CEO, Martin Winterkorn, resigned weeks after the EPA released the scandal.
According to Reuters, a senior Justice Department official said that Volkswagen could face fines more than $90 billion for the allegations, or as much as $37,500 per vehicle per violation of the law. The official said that Volkswagen had intentionally violated the law and the consequences were significant to health.
Volkswagen will also face criminal charges for misleading U.S. consumers and regulators. The criminal fraud investigation is still ongoing, and it may demand more fee and also pursue criminal charges against Volkswagen staff, depending on what the Justice Department finds.
The civil lawsuit also alleges that Volkswagen installed "defeat device" in many of its 3.0 diesel models. It reflects the expanding number of allegations since the company first admitted last year to installing cheat device in several of its 2.0 liter diesel models.
Volkswagen's earlier admissions eliminate almost any possibility to defend itself in court. Instead, the company will seek to negotiate a lower penalty by arguing that the maximum would lead to massive layoffs.
Volkswagen did not immediately respond to requests for comment about the lawsuit, but in a previous statement the company said it will continue to cooperate with all government agencies investigating the emissions scandal.