DOJ Sues VW Over Emissions-Cheating Scandal

Encryption Debate: 8 Things CIOs Should Know

The US Department of Justice on Monday filed a civil lawsuit in Detroit against Volkswagen for allegedly using illegal defeat devices to cheat on emissions tests, in violation of the Clean Air Act.

The agency's complaint, filed on behalf of the Environmental Protection Agency, alleges that almost 600,000 diesel vehicles from Volkswagen and its subsidiaries Audi and Porsche employed defeat devices to misrepresent compliance with emissions requirements.

"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 John C. Cruden, Assistant Attorney General for the Justice Department's Environment and Natural Resources Division, in a statement.

In September, after the EPA and the California Air Resources Board (CARB) charged that VW and its subsidiaries had used software to manipulate emissions tests, VW acknowledged the deception. CEO Martin Winterkorn resigned as the scandal widened beyond the US. In September, the company's board appointed Matthias Müller, chairman of Porsche AG, to help restore trust in the organization.

The DOJ complaint claims that the company's electronic control module in affected vehicles contains software designed to make engines meet emissions requirements only during test conditions. The software "tracks the parameters of the [federal test procedure] and causes emission control systems to underperform (or fail to perform) when the software determines that the vehicle is not undergoing the [emissions test]," the complaint says.

The list of affected vehicles includes the following models with 2.0 liter or 3.0 liter diesel engines: Jetta (2009-2015), Jetta Sportwagen (2009-2014), Beetle (2013-2015), Beetle Convertible (2013-2015), Audi A3 (2010-2015), Golf (2010-2015), Golf Sportwagen (2015), Passat (2012-2015), Volkswagen Touareg (2009-2016), Porsche Cayenne (2013-2016), Audi A6 Quattro (2014-2016), Audi A7 Quattro (2014-2016), Audi A8 (2014-2016), Audi A8L (2014-2016), Audi Q5 (2014-2016), and Audi Q7 (2009-2015).

The DOJ notes that the nitrogen oxides (NOx) emitted by combustion engines create pollution linked to respiratory problems and cardiovascular problems that can lead to premature death.

In October, Harvard and MIT researchers published a study in the journal Environmental Research Letters that estimated 59 people will die prematurely as a result of the extra pollution emitted by VW's noncompliant engines. The study also put a price on VW's defeat devices -- health and social costs amounting to $450 million through the end of 2015.

[Too little, too late? Volkswagen CEO: Using Deceptive Software Was Wrong.]

According to the suit, the DOJ may seek penalties of $32,500-$37,500 per affected car sold in the US, which could amount to more than $18 billion. Credit Suisse has reportedly estimated that the scandal could cost VW as much as $87 billion, though VW has dismissed that estimate. As a point of comparison, BP's Deepwater Horizon disaster ended up costing $53.8 billion.

VW has pledged to work with the EPA and CARB to offer a remedy for the emissions scandal and has created a website to keep customers informed about the issue.

**Elite 100 2016: DEADLINE EXTENDED TO JAN. 15, 2016** There's still time to be a part of the prestigious InformationWeek Elite 100! Submit your company's application by Jan. 15, 2016. You'll find instructions and a submission form here: InformationWeek's Elite 100 2016.