The second-largest auto company in the world was sued by the U.S. Justice Department after it allegedly violated the Clean Air Act by installing illegal emissions devices on nearly 600,000 diesel cars.
Volkswagen was slapped with the lawsuit in a Michigan District Court on behalf of the Environmental Protection Agency (EPA) on Monday, and could be facing penalties of billions of dollars, Reuters reports. Previous estimates have put the number at $19 billion.
Volkswagen is accused of intentionally tampering with emissions control systems of its cars in an effort to skirt federal laws. Last September, the company admitted to installing “cheat” engine management software, also called “defeat devices,” in its 2.0 liter diesel vehicle models
The case is a step down from criminal fraud allegations—though the Justice Department is also investigating those, on the basis that the company mislead U.S. consumers and regulators about its cars’ emissions.
Meanwhile, another faction of the U.S. government is preparing an enormous corporate bailout, according to The Fiscal Times. The so-called “Fairness in Class Action Litigation Act,” also known as the “VW Bailout Bill,” introduced by House Republicans, will be voted on in the House in early January, and would nullify the thousands of “non-injury” class-action cases that have been filed by Volkswagen owners who are angry that they were lied to—and that their cars have lost nearly all trade-in or re-sell value. The bill isn’t likely to make it through the Senate, however.
The newly-filed civil complaint against Volkswagen, however, is likely to be won by the Justice Department and the EPA, given that the burden of proof isn’t very high. Luckily, Volkswagen set aside a rainy day fund of $7.2 billion last September in case of a lawsuit like this—and will probably eek out of it without a problem (unlike their cars).