US sues VW over emissions-cheating software in diesel cars

The United States government has gone after Volkswagen, following revelations that the company had modified its cars to cheat diesel emission tests.

The Department of Justice filed a complaint in federal court in Detroit on behalf of the Environmental Protection Agency, alleging that Volkswagen installed software in 600,000 so-called “clean diesel” cars that sensed when an emissions test was being performed.

It is the first case brought against the company by the Department of Justice.

But given the cascade of revelations, the civil complaint, which does not involve criminal charges or auto executives facing charges, is something of a blow to the Obama administration’s highly promoted new strategy for getting tough on corporate crime.

Volkswagen’s earlier admissions eliminate nearly any possibility that the automaker could defend itself in court, Daniel Riesel of Sive, Paget & Riesel P.C, who defends companies accused of environmental crimes, said. The complaint filed by the Department of Justice suggests that the software to defeat the emissions control system in 2.0 and 3.0 liter cars was slightly different, however.

“So far, recall discussions with the company have not produced an acceptable way forward”, aid Assistant Administrator Cynthia Giles for EPA’s Office of Enforcement and Compliance Assurance.

Volkswagen AG, Audi AG, Volkswagen Group of America Inc., Volkswagen Group of America Chattanooga Operations LLC, Porsche AG and Porsche Cars North America Inc, were named in the Justice Department lawsuit. The CEO of Volkswagen, Martin Winterkorn, resigned shortly after that.

According to a senior officer from Justice Department, the allegations in the lawsuit carry penalties that could cost Volkswagen billions of dollars.

The federal government says it has reached an impasse in talks with Volkswagen over penalties for emissions cheating. Motor vehicles equipped with illegal defeat devices can not be certified.

The problems continue to mount for troubled German automaker Volkswagen.

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

The EPA’s claims shocked and angered many Volkswagen owners; the case also led a House committee to call Michael Horn, the CEO of Volkswagen’s US business, to testify on Capitol Hill.