The U.S. Department of Justice recently filed a civil suit against Volkswagen concerning its use of software in over 500,000 of its vehicles to defeat government emissions tests and is seeking billion in fines. The U.S. Department of Justice is not waiving its right to seek criminal charges as well and has a separate ongoing criminal fraud investigation into this scandal. This is an aggressive legal action by the government to let not only Volkswagen but other automakers as well know that it will not tolerate hidden defeat mechanisms being installed in vehicles.
Why Volkswagen Could Owe Billions
Volkswagen is also in negotiations with the government over a recall plan, but the two sides have not made satisfactory progress on how Volkswagen will fix the problem. Volkswagen has not yet proposed a solution to the problem. This may be one reason the Department of Justice sued Volkswagen.
Important information about the lawsuit includes the following:
- The lawsuit claims VW violated the Clean Air Act by making and selling vehicles that were different from what was represented to the Environmental Protection Agency (EPA) in certification documents, and by failing to report violations.
- The lawsuit covers almost 600,000 2-liter and 3-liter engine Jetta, Beetle, Golf, Passat, Audi, and Porsche models.
- The government is asking for between $32,500 and $37,500 in fines for each vehicle, for a total fine in excess of $18 billion.
It is hoped the threat of such huge fines will put pressure on Volkswagen to determine how to fix the problem and to develop a recall program to resolve the problem quickly for consumers.
Volkswagen Hires Kenneth Feinberg to Settle Claims
In other recent news, Volkswagen has appointed Kenneth Feinberg to settle claims for compensation in this scandal. Feinberg has administered the BP oil spill and General Motor’s ignition switch claims processes as well. He is working out the details of how consumers can file claims, but there could be compensation for loss of gas mileage, buybacks of vehicles, and cash payments. He hopes to have a plan in place within the next 90 days.
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