Environmental Law

DOJ launches criminal probe as Volkswagen admits being 'dishonest' with EPA

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The U.S. Justice Department has begun a criminal investigation into allegations that Volkswagen used software to cheat on emissions standards, the Associated Press reports.

The probe is yet another significant blow to the company’s reputation in the fast-growing scandal stemming from the Environmental Protection Agency’s announcement Friday that the company designed software intended to give false readings when the vehicles were being tested for emissions.

The ensuing flurry of events has included a dive in the price of Volkswagen’s stock on Monday; the company’s immediate halt of sales of some vehicles in the U.S.; and lawsuits seeking class action status for owners of nearly half a million cars. Local governments may also make claims concerning impact on public health.

Volkswagen’s chief in the U.S., Michael Horn, addressed the problem at an event in New York City on Monday evening: “Let’s be clear about this: Our company was dishonest with the EPA and the California Air Resources Board and with all of you. In my German words, we have totally screwed up.”

The “defeat device” software was installed in about 482,000 cars in the model years 2009 through 2015. The EPA and California regulators began looking into it in May 2014 after researchers at West Virginia University found lab results which varied significantly from road tests. Volkswagen told regulators the discrepancy was due to “various technical issues and unexpected in-use conditions,” according to the EPA letter to the company Friday. The regulators say Volkswagen diesel engines emitted nitrogen oxide in amounts 40 times greater than federal standards.

Volkswagen’s chief executive, Martin Winterkorn, issued a statement Sunday saying, “We at Volkswagen will do everything that must be done in order to re-establish the trust that so many people have placed in us, and we will do everything necessary in order to reverse the damage this has caused.”

The company could be fined $37,500 for each vehicle, a potential $18 billion. And the reverberations are affecting Volkswagen’s already weak U.S. sales, as well as causing anger and worry in Germany, which is Europe’s economic anchor and holds fast to its international reputation for quality and integrity in manufacturing.

The Seattle law firm Hagens Berman filed a suit against Volkswagen seeking class action status just hours after the EPA’s Friday news conference, and filed another Monday that includes clients in 20 states. The firm says it expects to have clients in all 50 states by the end of the week, USA Today reports.

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