Tuesday, October 20, 2015

US States Move Quickly in VW Case

[ed. Caution: feeding frenzy. Having been involved in similar litigation, I can only imagine the legal manuevering going on behind the scenes. Greed is pretty ugly. But VW also comprises a major component of Germany's economy, so it'll be interesting to see what political influence is brought to bear on the situation going forward. The criminal case will be bad enough, the civil case could last for decades.]

With billions of dollars at stake in restitution and penalties, U.S. states are moving quickly to try to hold Volkswagen accountable for its emissions-cheating scandal.

Forty-five states and D.C. have joined a multistate investigation led by attorneys general, which is determining how VW was able to game emissions tests to hide that its "Clean Diesel" cars emitted smog-causing exhaust up to 40 times dirtier than the law allows. California and Texas are conducting their own investigations for now. At least one county, Harris County in Texas, also is going after Volkswagen with a lawsuit seeking more than $100 million.

The attorneys general are expected to seek compensation for consumers and redress for environmental harm, building their investigations under state laws that protect consumers from deceptive trade practices and set clean air standards.

"This is a really important case and it has big economic and health consequences. It's nowhere near the scale of tobacco but you are kind of in that realm," said former Wisconsin governor and attorney general Jim Doyle, who participated in the multistate investigation that ended with a landmark $200 billion, 25-year settlement with tobacco companies in 1998. "This is the kind of case that you elect an AG for, to stand up for the safety and health of the people of the state."

Volkswagen is "looking at an enormous settlement, just enormous, when you think about how many cars are out there," he said.

The case, in some respects, presents a slam dunk: Volkswagen has already admitted wrongdoing, affecting roughly a half million cars in the United States.

"This case makes me miss my AG days because there's such an opportunity to send a message, and the states can be at the forefront of sending a message," said Sen. Richard Blumenthal, D-Conn., former attorney general of his state.

Blumenthal said he was stunned by news that the world's largest carmaker had rigged its software to dupe emissions tests. "Astonishment bordering on disbelief that a company could be so absurdly arrogant and lawless that it would knowingly engage in this type of conduct," he said.

The multistate group formed unusually quickly given the company's admissions, but the investigation could last years. For comparison, a multi-state attorneys general investigation of ignition switch defects involving GM cars - a review that started shortly after GM announced a recall 20 months ago - remains active today. (...)

Volkswagen may want to deal first with any criminal charges before discussing any civil settlement, as the Justice Department investigates potential illegality by the company and its executives. The Environmental Protection Agency and Federal Trade Commission are also investigating.

"Until the criminal case clears, nobody is going to talk about civil. Volkswagen will not settle until the criminal investigations are resolved," said James E. Tierney, program director of the national state attorneys general program at Columbia Law School, and a former Maine attorney general.

by Ronnie Greene and Ryan J. Foley, AP |  Read more:
Image: Luca Bruno