Weeks ago, the Volkswagen diesel scandal, now five years in the rearview mirror, received an unexpected sequel that could expose it to further fines that the federal court itself labeled a “staggering liability.” But the case itself goes beyond Volkswagen.
In 2016 the automaker reached historic settlement with the EPA and a number of other U.S. regulators — historic due to the amounts of fines involved — over the emissions-cheating software installed in a number of its TDI models sold for several years in the U.S. The automaker ended up allocating over $20 billion to buybacks of hundreds of thousands of cars that had been sold in the U.S., in addition to paying fines and taking on other remedial projects. Following the 2016 civil settlement the German automaker had also settled with the Department of Justice in the U.S. in regards to criminal misconduct, paying another $2.8 billion in the process. Volkswagen has also faced separate criminal and civil litigation and government probes in a number of other countries, including Canada and Germany, and the diesel investigation eventually included other Volkswagen Automotive Group brands including Porsche and Audi, the offices of which had been raided by German prosecutors. By 2017 the probes has largely quieted down, even as German prosecutors continued to interview individual executives.
While the record-setting buyback process, fines and other remedial projects settled civil matters in the U.S. that involved agencies like the EPA, the California Air Resources Board and the Department of Justice, a number of lawsuits by individual state counties continued. Specifically, Florida’s Hillsborough County and Utah’s Salt Lake County.
In June of this year the lawsuits culminated in a stunning and unanimous 3-0 decision by the United States Court of Appeals for the Ninth Circuit that held that the settlements reached by Volkswagen with federal agencies did not prevent suits by local governments aimed at…