- The Energy Mix - https://www.theenergymix.com -

U.S. Sues VW While Congress Mulls Class Action Bailout

Simon / Pixabay

The United States Department of Justice is suing Volkswagen AG for illegally installing devices that blocked emissions testing on about 580,000 vehicles sold between 2009 and 2016.

“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,” said Assistant Attorney General John Cruden.

Under the Clean Air Act, each violation could lead to a penalty of up to US$32,500 to US$37,500, and a Justice Department official said VW could face up to four separate penalties for each vehicle. “Judges rarely impose the maximum penalty, and some of the alleged violations could be considered to be overlapping, bringing down any final amount,” Bloomberg reports, citing Justice officials. “Nevertheless, the penalties requested against the company would clearly be in the billions of dollars.”

The lawsuit also names units of Audi AG, Porsche AG, and Porsche Cars North America.

In September, VW acknowledged it had falsified emission controls in 11 million vehicles, amid reports that it faced US$18 billion in fines from the U.S. Environmental Protection Agency. This week, the EPA said negotiations with the company had failed to deliver a solution. “So far, recall discussions with the company have not produced an acceptable way forward,” said EPA Assistant Administrator Cynthia Giles.

“The Justice Department is seeking an order requiring Volkswagen to take ‘appropriate steps,’ including mitigating nitrogen oxide emissions,” write Schoenberg and Katz. “Such steps might include forcing Volkswagen to install equipment to reduce pollution or buy back vehicles from owners.”

Meanwhile, the U.S. Congress is considering just over 100 words of legislative language to shut down hundreds of class action lawsuits that VW faces from outraged owners. “It’s known as the ‘Fairness in Class Action Litigation Act,’ but lawyers and advocates call it the ‘VW Bailout Bill,’” The Fiscal Times reported this week.

“Proponents like the U.S. Chamber of Commerce, the bill’s leading lobbyist, say they merely want to get rid of ‘non-injury’ class-action cases, based on potential damages from defective consumer products or corporate actions that have yet to result in harm,” the Times reports. “Lawyers for class-action litigants argue that defective products deserve compensation even if the consumer hasn’t yet been injured.”

Columnist David Dayen says the proposed legislation “goes much further, stating that courts may not certify class-action suits unless the plaintiff ‘affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative or representatives.’” That provision “sets up all class-actions to fail,” according to Lori Andrus, a lawyer for several VW plaintiffs, forcing each member of a class into a full-blown trial of their own.