NY AG Sues Audi, Porsche, Volkswagen

New York Attorney General Eric T. Schneiderman, along with Massachusetts Attorney General Maura Healey and Maryland Attorney General Brian Frosh, announced lawsuits today against Volkswagen, Audi and Porsche, alleging that the automakers sold diesel automobiles fitted with “defeat devices” that concealed illegal amounts of harmful emissions – and then allegedly attempted to cover it up.

“The allegations against Volkswagen, Audi and Porsche reveal a culture of deeply-rooted corporate arrogance, combined with a conscious disregard for the rule of law and the protection of public health and the environment,” Schneiderman said in the announcement. “These suits should serve as a siren in every corporate board room, that if any company engages in this type of calculated and systematic illegality, we will bring the full force of the law — and seek the stiffest possible sanctions — to protect our citizens.”

The company and its affiliates and subsidiaries sold more than 25,000 cars with the devices in New York, 15,000 in Massachusetts and 12,935 in Maryland, according to the attorneys general.

“These automobile manufacturers deliberately deceived the public into believing their cars met emissions standards when in fact they were excessively polluting New York’s air,” said New York DEC Commissioner Basil Seggos. “This corrupt behavior is unacceptable and it undermines our efforts to protect public health and combat climate change. I applaud Attorney Generals Schneiderman and Healy for their important efforts to uphold the integrity of our clean air regulations.”

The lawsuits follow a nine-month-long investigation by a coalition of more than 40 states and other jurisdictions. The environmental agencies in all three states provided important assistance with the investigation, the announcement said.

The complaints allege, in detail, a cover-up that Volkswagen and Audi allegedly managed for nearly 18 months.

It followed a study by researchers at West Virginia University that alerted authorities in the U.S. that these diesel cars emitted much more nitrogen oxides when driven on the road than they did when undergoing emissions testing on test equipment used by the U.S. Environmental Protection Agency and the California Air Resource Board.

The car companies partially settled claims for consumer relief and consumer deception penalties and agreed to establish a fund to mitigate the environmental damage caused by their admitted misconduct.

But, officials said, those settlements did not resolve any of the claims for civil penalties that New York, Massachusetts and other states, as well as the EPA, could bring for the companies’ violations of state and federal environmental laws and regulations, nor did the settlements cover all of the vehicles equipped with emission control "defeat devices."

The lawsuits allege that after the EPA and CARB contacted Volkswagen and Audi about the discrepancies revealed by the West Virginia University study, Audi and Volkswagen:

• Tried to cover up the problem through sham recalls that they knew would not meet the required standards;
• Repeatedly failed to disclose to regulators the true reason – the defeat devices – for the discrepancies; and
• Only confessed to the defeat devices when they knew the regulators had them pinned to the facts.

The complaints allege that Volkswagen’s response to the scandal shows that the company has not reformed its corporate behavior.

When the investigation was getting under way in late 2015, numerous employees, tipped off by a senior in-house lawyer in Germany, allegedly destroyed incriminating documents. Just last month, the AGs said, the Volkswagen Supervisory Board recommended a package of bonuses totaling more than $70 million for the management board that presided over the cover-up, which was overwhelmingly approved by the company’s shareholders.