In September 2015, the EPA found that the automobile company Volkswagen had been in violation of the federal Clean Air Act. The automaker had allegedly programmed cars using a TDI system to meet emissions standards, but only while conducting tests in a laboratory. In reality, some 500,000 cars between 2009-2015 were creating emissions 40 times higher than allowed by law. What were some of the legal repercussions of this violation?
Volkswagen Stopped Making the Cars in Question
As a result of the EPA investigation, Volkswagen stopped making any vehicle that had a turbocharged diesel injection (TDI) system. The government says that a variety of models with 2.0 and 3.0 liter engines had software installed on them that manipulated the results of the test. Although the EPA and other agencies believe that they can prove that VW broke the law, it has so far been unable to get access to documents because of German laws.
The Automaker Faces Large Fines in the United States
It is possible that Volkswagen could be fined by the EPA $37,500 for each car it sold that violated the Clean Air Act standards. All told, that could result in a total fine of $18 billion. Furthermore, the government may pursue up to $48 billion in additional fines for violating standards outlined in the Clean Air Act.
Company Leaders Could Face Criminal Charges
New York Attorney General Eric Schneiderman is leading an investigation against Volkswagen claiming that they sold customers a false bill of goods. In addition the FBI and attorney generals in 25 other states are conducting investigations of their own. As part of the investigation, the company is accused of creating an ongoing endangerment to the health and safety of customers.
Private Citizens Have Also Filed Suit Against the Company
In addition to state governments and government agencies filing suit against the company, it is also facing a variety of class action lawsuits. These cases center around the fact that the cars are worth less, as they cannot meet regulatory standards. Investors have also taken legal action because Volkswagen’s stock has dropped significantly because of this scandal.
It may be months or years before the legal cases against Volkswagen are settled. If the allegations against the company are found to be true, it could cost the company billions of dollars, in addition to the loss of prestige that the brand may experience. While it may not bankrupt the company, the fallout from the scandal could be felt for a long time to come.