Is this the end of Volkswagen? Since Friday, September 18, 2015 Volkswagen has been under fire for cheating emissions tests with complex software, and being responsible for producing forty times more pollution than is allocated. Volkswagen was forced to recall roughly 482,000 cars in the US because of this. Since the scandal broke, there are numerous agencies that are holding Volkswagen accountable for its actions. The investigation of the Environment Protection Act was driven by the International Council on Clean Technology, who helped influence Volkswagen to admit its actions.
The Environment Protection Agency (EPA) asserts that Volkswagen installed defeat devices. These defeat devices cut nitrogen oxide pollution of the vehicles during certification tests that the cars had to undergo. Nitrogen oxide is a pollutant that can cause many health problems including: asthma, bronchitic and emphysema. The EPA is holding Volkswagen accountable for its use of the defeat devices, because avoiding clean air standards is not only an illegal practice, but also causes a threat to the public health. Volkswagen is continuing to be investigated further and the company could be fined per vehicle, which totals an estimated $18 billion dollars. The company can also be found to have breached the Clean Air Act. Under Federal Law, the Clean Air Act regulates air emissions from sources that can either be mobile or stationary. The EPA is given the ability to establish National Ambient Air Quality Standards in order to ensure that the health of the public is protected, and that there is an ability to regulate hazardous air pollutants, such as nitrogen oxide.
Volkswagen has now admitted to 11 million diesel cars that were equipped with the software that had the ability to cheat the emissions tests. Volkswagen has admitted that the vehicles sold within the US were programmed to sense when the emissions were being tested. There are different emissions regulations found in both Europe and the US. EU emissions regulations have set mandatory emission reduction targets for new cars. The EU uses this strategy in order to improve the fuel economy of cars that are sold throughout Europe. In 2004, the EU emissions regulations were specified in Directive 70/220/EEC, which was then replaced by Regulation 715/2007 (Euro 5/6). The European emissions standards define the acceptable exhaust emissions of new vehicles that are sold within member countries of the EU. Other emissions standards are found within the US. The California Air Resources Board (CARB) has its own emissions standards. The EPA has to certify cars under its own standards. In other words, the CARB emissions standards are not enough to pass in order for a vehicle to be approved to go into commerce. The way that the company was able to cheat these types of emissions standards was by turning on special equipment to reduce the emissions.
Volkswagen may face lawsuits and criminal prosecutions in the US and abroad. California has started its own criminal investigation, and the US Department of Justice said that prosecutors are working with the US Environmental Protection Agency investigators.
The center in Oxnard was a site where Volkswagen vehicles were put through tests to check if the vehicles were polluting as little as what was being advertised to the public, and to see if the vehicles met the emissions standards. Two law firms that are located in Southern California have cited the center in Oxnard, in lawsuits against Volkswagen. These law firms are pursuing damages for fraud and negligence in the Los Angeles Federal Court on behalf of owners of the Volkswagen diesel vehicles in California.
California is not the only state that is pursing lawsuits against Volkswagen. Florida Senator, Bill Nelson has asked the Federal Trade Commission to start looking for remedies for the owners of these Volkswagen vehicles. Attorney generals for New York, along with other states have said that they are forming groups to investigate the scandal. Several class-action lawsuits have been filed in the US and Canada and firms within the UK have also prepared cases on behalf of Volkswagen owners. Germany’s government has said that they have started an investigation within their country into the company’s conduct. The German government has also warned that this scandal that Volkswagen has created is jeopardizing the reputation of Germany’s auto industry. Italy, France and South Korea are among other nations that are looking into the matter.
This scandal has also caused the Volkswagen stock to drop. Shares in other carmakers also took a fall including: Peugot, BMW, Daimler and Mercedes-Benz. Since the scandal’s public revelation, not only has the CEO of Volkswagen resigned, but the Audi development chief Ulrich Hackenberg who was responsible for brand development in 2007 to 2013, and Wolfgang Hatz who ran the group’s powertrain development from 2007 to 2011 are said to also be leaving in the future.
Stocks have fallen, people are being forced to leave their positions in the company, future fines and the future costs of the actions against them, Volkswagen can be facing the end of their company that has been in business since 1937. It is even possible that with all of the allegations and findings that are being discovered in this scandal will cause the company to go out of business.
Alyse A. Casale is a third-year law student at Ave Maria School of Law. She did pro bono services at Income Tax Assistance (VITA) and Estate Planning and General Practice Clinic.
Suggested citation:Alyse Casale, The Downfall of Volkswagen , JURIST – Dateline, Nov. 2nd, 2015, http://jurist.org/dateline/2015/11/alyse-casale-volkswagen-downfall.php.
This article was prepared for publication by Yuxin Jiang, a Senior Editor for JURIST Commentary service. Please direct any questions or comments to her at firstname.lastname@example.org