EPA v. Volkswagen

Case summary

This case concerns allegations by the Environmental Protection Agency (EPA), as well as the State of California that German automaker Volkswagen AG and related entities cheated on vehicle emissions tests and deceived customers by installing defeat devices on 2009 through 2015 diesel vehicles. A settlement between the United States and the State of California and Volkswagen partially resolves the defeat device claims. A related settlement between the U.S. Federal Trade Commission (FTC) and Volkswagen resolves claims by the FTC that Volkswagen violated the FTC Act through the deceptive and unfair advertising and sale of its clean diesel vehicles. The settlements do not resolve pending claims for civil penalties or any claims concerning 3.0 liter diesel vehicles. Nor do they address any potential criminal liability. The affected vehicles include 2009 through 2015 Volkswagen TDI diesel models of Jettas, Passats, Golfs and Beetles as well as the TDI Audi A3. Volkswagen allegedly equipped its 2.0 liter diesel vehicles with illegal software that detects when the car is being tested for compliance with EPA or California emissions standards and turns on full emissions controls only during that testing process. During normal driving conditions, the software renders certain emission control systems inoperative, greatly increasing emissions. This is known as a ?defeat device.? Use of the defeat device results in cars that meet emissions standards in the laboratory, but emit harmful NOx at levels up to 40 times EPA-compliant levels during normal on-road driving conditions. The Clean Air Act requires manufacturers to certify to EPA that vehicles will meet federal emission standards. Vehicles with defeat devices cannot be certified. The settlements require Volkswagen to offer owners of any affected vehicle the option to have the company buy back the car and to offer lessees a lease cancellation at no cost. Volkswagen may also propose an emissions modification plan to EPA and CARB, and if approved, may also offer owners and lessees the option of having their vehicles modified to substantially reduce emissions in lieu of a buyback. Volkswagen must set aside and could spend up to $10.03 billion to pay consumers in connection with the buy back, lease termination, and emissions modification compensation program. Volkswagen must offer to buy back any affected 2.0 liter vehicle at their retail value as of September 2015 -- just prior to the public disclosure of the emissions issue. Consumers who choose the buyback option will receive between $12,500 and $44,000. The settlements also allow Volkswagen to apply to EPA and CARB for approval of an emissions modification on the affected vehicles, and, if approved, to offer consumers the option of keeping their cars and having them modified to comply with emissions standards. Eligible consumers will receive notice from VW after the orders are entered by the court in fall 2016. Consumers will be able to see if they are eligible for compensation and if so, what options are available to them, at VWCourtSettlement.com and AudiCourtSettlement.com. Consumer payments will not be available until the settlements take effect if and when approved by the court, which may be as early as October 2016. The settlement of the company?s Clean Air Act violations also requires Volkswagen to pay $2.7 billion to fund projects across the country that will reduce emissions of NOx where the 2.0 liter vehicles were, are or will be operated. The Clean Air Act settlement also requires VW to invest $2 billion toward improving infrastructure, access and education to support and advance zero emission vehicles. For more information, visit: https://www.epa.gov/enforcement/volkswagen-clean-air-act-partial-settlement.

Defendants (6)

• Volkswagen Group of AmericaNamed in complaintNamed in settlement
• Audi AGNamed in complaintNamed in settlement
• Volkswagen AGNamed in complaintNamed in settlement
• Volkswagen Group of America Chattanooga OperationsNamed in complaintNamed in settlement
• Dr. Ing. H.c. F. Porsche AGNamed in complaintNamed in settlement
• Porsche Cars North America, Inc.Named in complaintNamed in settlement

Facilities (1)

• VOLKSWAGEN OF AMERICA

  3800 HAMLIN ROAD, AUBURN HILLS, MI, 48326

  Registry ID: 110003671919

Statutes cited

• CAA 203 — Prohibited Acts - Motor Vehicle & Motor Vehicle Engines

Enforcement conclusions (3)

• Volkswagenentered 2017-04-13

  Primary law: CAA

  Federal penalty: $1,450,000,000

• Volkswagenentered 2017-05-17

  Primary law: CAA

• Volkswagenentered 2016-10-25

  Primary law: CAA

Timeline (10 milestones)

• 2015-10-05Referred To Dept Of Justice
• 2015-11-25Supplemental Referral-Adding parties, counts
• 2016-01-04Complaint Filed With Court
• 2016-04-14Enforcement Action Data Entered
• 2016-10-07Amended Complaint
• 2017-01-11Final Order Lodged
• 2017-02-14Consent Decree Amendment
• 2017-05-17Final Order Entered
• 2018-06-01Consent Decree Amendment
• 2018-10-31Consent Decree Amendment