U.S. government sues Volkswagen over diesel scandal

The federal government sued Volkswagen on Monday over the automaker’s diesel emissions scandal, seeking billions in damages.

The long-awaited lawsuit was filed in U.S. District Court in Detroit, but the Justice Department said it will seek to have the case transferred to federal court in San Francisco. That court is already presiding over the multitude of private class-action consumer lawsuits filed against the German automaker.

In filing the suit, the federal government indicated it hadn’t made enough progress in talks with Volkswagen over the recall of the estimated 600,000 diesel cars that illegally circumvented the vehicles’ emission-control systems.

“So far, recall discussions with the company have not produced an acceptable way forward,” said Cynthia Giles, assistant administrator with the U.S. Environmental Protection Agency, in a prepared statement. “These discussions will continue in parallel with the federal court action.”

The California Air Resources Board, which was instrumental in uncovering the diesel scandal, is working with the EPA on the carmaker’s recall proposal but hasn’t determined yet if Volkswagen’s plans will work.

“We’re in an evaluation mode at this point,” said agency spokesman David Clegern.

Volkswagen said it “will continue to work cooperatively with the EPA on developing remedies to bring the (diesel) vehicles into full compliance with regulations as soon as possible.”

Last fall, Volkswagen acknowledged to the EPA and the California air board that it had equipped its diesel vehicles with “defeat device” software designed to circumvent air-pollution controls. The software turned the pollution-control systems on when the vehicles were being tested for emissions standards, and switched them off when the cars were on the road.

Experts say the emissions systems, which are aimed at curtailing nitrogen oxide, can hamper fuel mileage and vehicle performance.

Volkswagen admitted the existence of the rogue software after tests were conducted in Southern California, first by researchers from West Virginia University and later by engineers at the California air board’s laboratory in El Monte, just east of Los Angeles.

“VW’s illegal defeat devices have resulted in thousands of tons of excess NOx emissions in California, a state where more than 12 million people live in areas that exceed air-quality standards set to protect public health,” said air board Chairwoman Mary Nichols in a prepared statement. Approximately 65,000 of the Volkswagens were sold in California.

NOx, or nitrogen oxide, is a key contributor to smog. Federal officials say the Volkswagens spewed up to 40 times the allowable NOx emissions.

The case covers a variety of Volkswagen, Porsche and Audi diesel vehicles sold in the United States. The government is seeking fines of up to $37,500 per day for every car involved. That could translate into billions of dollars in damages.

This story was originally published January 4, 2016 at 11:27 AM with the headline "U.S. government sues Volkswagen over diesel scandal."