3 State Attorneys General Charge that Volkswagen Scandal is 10-Year Orchestrated Fraud

NY, MD and MA AGs Sue Volkswagen
The lawsuits allege this cover-up was orchestrated at the highest levels of the company, up to and including the former CEO, Martin Winterkorn.

The Attorneys General for New York, Massachusetts and Maryland filed suit on July 19, 2016 against Volkswagen AG, Audi AG and Porsche AG, as well as their American subsidiaries, for the automakers’ sale of diesel cars that were fitted with illegal “defeat devices.”

These cars (including over 25,000 in New York, 15,000 in Massachusetts and 12,935 in Maryland) spewed illegal amounts of harmful emissions – and the companies attempting to cover-up their behavior.

Litigation against VW is consolidated in In re: Volkswagen “Clean Diesel” Litigation, MDL 2672. On August 25, 2016, attorneys may listen to a status conference by telephone using the CourtCall remote court appearance service. Advance registration for remote attendance is required; this can be done online or by calling CourtCall at (866) 582-6878.

Sample Motions and Forms are available online for subscribers of Mass Tort Nexus.

See our news story:
Shocker: EU Has Covered Up Volkswagen Emissions Cheating Since 2010
  • “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,” New York Attorney General Schneiderman said. “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.”
  • “Volkswagen, Audi and Porsche defrauded thousands of Massachusetts consumers, polluted our air, and damaged our environment and then, to make matters worse, plotted a massive cover-up to mislead environmental regulators,” Massachusetts Attorney General Healey said. “With today’s action, we want to make clear to all auto manufacturers that violating laws designed to protect our environment and our public health is unacceptable and will be punished with significant penalties.”
  • “Maryland has worked tirelessly, through Maryland’s Healthy Air Act and Clean Cars Act, as well as stringent regulations adopted by the Department of the Environment, to clean our air,” said Maryland Attorney General Frosh. “As our complaint sets out, Volkswagen, Audi and Porsche installed defeat devices in their cars to trick regulators and to deceive the public; they did so knowing that their conduct was illegal and their misconduct has hindered our efforts to clean the air and to clean the Chesapeake Bay.  Their disregard for the health of our citizens and their disregard for our environment must be punished.”

10 Year Cover-Up

These lawsuits by the New York, Massachusetts and Maryland Attorneys General offices follow a nine-month long investigation by a multistate coalition of more than 40 states and other jurisdictions, led by New York, Massachusetts, and four other states.  New York State’s Department of Environmental Conservation, Massachusetts’s Department of Environmental Protection and Maryland’s Department of the Environment provided important assistance with the investigation.

The complaints allege, in detail, a cover-up that Volkswagen and Audi allegedly managed for nearly a year-and-a-half. The cover-up followed a study by researchers at West Virginia University that alerted authorities in this country that these diesel cars emitted much more nitrogen oxides (NOx) when driven on the road than they did when undergoing emissions testing on test equipment used by the U.S. Environmental Protection Agency (EPA) and the California Air Resource Board (CARB) to test the amount of air pollutants emitted by automobiles.

These suits follow the car companies’ partial settlements of claims for consumer relief and consumer deception penalties, as well as their agreement to establish a fund to mitigate the environmental damage caused by their admitted misconduct. Those earlier settlements did not resolve any of the claims for civil penalties that New York, Massachusetts and other states, as well as the EPA, may bring for the companies’ flagrant violations of state and federal environmental laws and regulations, nor did the settlements cover all of the vehicles equipped with emission control defeat devices.

Lies, Cover-up, Confession

The lawsuits allege that, after the EPA and CARB contacted Volkswagen and Audi about the discrepancies revealed by the West Virginia University study — which the companies fully knew were caused by their defeat devices – 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 lawsuits allege this cover-up was orchestrated and approved at the highest levels of the company, up to and including the former CEO, Martin Winterkorn.

Throughout this entire course of alleged illegal conduct, where dozens of employees, officers and senior executives were involved, the investigation found no evidence that a single Volkswagen, Audi or Porsche employee came forward to blow the whistle.

As alleged in the complaints, 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 Volkswagen Supervisory Board recommended a package of bonuses for the Management Board that presided over the cover-up totaling over $70 million, including generous severance pay to Mr. Winterkorn himself. That recommendation was overwhelmingly approved by the company’s shareholders.

The Attorneys Generals’ investigation also found evidence that the misconduct of Volkswagen and its Audi and Porsche subsidiaries in the production and sale of these automobiles has few parallels in corporate history.

Larry Bodine

Attorney Larry Bodine is Editor of Mass Tort Nexus, and the Editor of The National Trial Lawyers. He is the former Editor in Chief of Lawyers.com and the American Bar Association Journal. He is a cum laude graduate of both Seton Hall University Law School and Amherst College.

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