Volkswagen’s Emission Defeat Devices are subjecting the Automaker Giant to Class Action Litigation

Volkswagen has recently been hit by a wave of skepticism as news of the company’s emissions scandal shocked the United States. Volkswagen Group, also known as Volkswagen Aktiengasellschaft, is the second largest car manufacturer in the world. In addition to the well-known Volkswagen brand, the company also sells cars under its subsidiary brands such as Bentley, Bugatti, Lamborghini, Audi, and Porsche. As of May 2015, Volkswagen Group was valued at a substantial $126 billion, ranking 67th on Forbes’ list of the World’s Most Valuable Brands.

What cars are affected by the emissions scandal?

In early 2014, two students and two professors at West Virginia University received a $50,000 grant to study the emissions tests on three diesel cars: the VW Passat, the VW Jetta, and the BMW X5. The studies revealed that the BMW X5 performed at or below federal emissions standards. However, the Volkswagen test subjects did not fare so well. The VW Passat exceeded U.S. emissions standards by a factor of 5 to 20, while the VW Jetta exceeded U.S. emissions standards by a factor of 15 to 35. In May of 2014, the West Virginia scientists reported their findings to the EPA.

The EPA immediately began looking into the emissions tests for Volkswagen’s 2.0-liter turbodiesel (TDI) engines sold in the U.S. since 2009. To date the EPA has determined that 482,000 cars in the U.S. were affected, and almost 11 million vehicles worldwide. U.S. cars that were affected by the faulty emission standards include: the 2009 to 2015 Volkswagen Jetta TDI, 2009 to 2014 Volkswagen Jetta SportWagen TDI, 2012 to 2015 Volkswagen Beetle TDI, 2013 to 2015 Volkswagen Beetle convertible TDI, 2010 to 2015 Audi A3 TDI, 2010 to 2015 Volkswagen Golf TDI, 2012 to 2015 Volkswagen Passat TDI and 2015 Volkswagen Golf SportWagen TDI.

How did Volkswagen evade emissions standards?

Every car sold in the United States must pass rigorous environmental testing. In order for a car to pass the emissions standards in the U.S. the car’s nitrogen oxide emissions must not exceed .07 grams per mile. Emissions regulators test a car’s nitrogen oxide emissions levels by hooking the car up to a dynamometer, which is more or less like a treadmill for vehicles.

Volkswagen developed what is called a “defeat device” which is software that is embedded in the vehicle that senses when the car is being tested for emissions and simply adjusts the vehicle’s engine performance and emissions to pass the test. However, when the car is driven under normal conditions and not running the defeat device, the vehicle operates at up to 40 times more than the allowed emissions standards.

“Defeat devices” are not new to the EPA and the rules do not ban the use of wholesale defeat devices. A Defeat device is defined as an “”auxiliary emission control device (AECD) that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use.” US Code of Federal Regulations (40 CFR 86.1803.-01). The EPA can approve the use of defeat devices; however, the EPA has to know that they are being used. In the case of Volkswagen, they never told the EPA that their cars were using a defeat device to evade emissions testing.

What are Volkswagen’s next steps?

Volkswagen has already set aside approximately $7 billion to handle potential fines and recalls. However, the EPA has recently stated that fines could reach as high as $18 billion, almost $37,500 per recalled vehicle. In addition to paying EPA’s fines, Volkswagen will also have to recall all the affected vehicles and modify their emissions systems, likely drastically diminishing the vehicle’s driving dynamics and slashing the vehicle’s fuel economy. Volkswagen stated publicly that recalls are planned to begin in January 2016 and should be completed by the end of the year.

What lawsuits are currently being filed?

Class action lawsuits stemming from the emissions scandal have already begun to be filed. Causes of action vary but most are citing fraud, breach of contract, loss due to diminished value, false advertising, and violation of consumer protection laws. In Alabama, lawsuits have been filed against Volkswagen of America, Inc. by dealers and consumers alike. On September 23, 2015, buyers of the Volkswagen Jetta “clean diesel” brought a class action fraud suit in the Northern District of Alabama alleging that Volkswagen had fraudulently installed software in the car to turn off the emissions control system when not undergoing emissions testing. Then, on October 2, 2015, Serra Nissan/Oldsmobile Inc. brought an anticipatory suit alleging fraud against Volkswagen for causing them to unknowingly sell cars that did not comply with emissions standards.  On that same day a class action was filed in Northern District of Alabama alleging that Volkswagen fraudulently installed a “defeat device” in their clean diesel cars that only turns on the emissions control while the car is undergoing emissions testing. Another class action was filed in the Northern District alleging violation of the Racketeer Influenced and Corrupt Organizations (“RICO”) Act for falsely marketing diesel cars as being “green” and environmentally friendly.

The law firm of Hollis Wright is not currently representing any individuals affected by the Volkswagen scandal. However, our law firm has extensive litigation experience in Motor Vehicle Accidents and Defective Vehicle and Components cases. If you or someone you know has been harmed in an automotive related accident please do not hesitate to contact the firm of Hollis Wright for more information and an evaluation.