Volkswagen approaches US Supreme Court to reverse ruling on Local Emission Claims

Volkswagen approaches US Supreme Court to reverse ruling on Local Emission Claims

Volkswagen had admitted in 2015 to rigging 11 million diesel vehicles worldwide with software that allowed them to evade government emissions tests

The Volkswagen AG and a German auto supplier on 26 January 2021 approached the US Supreme Court to reverse a lower court ruling that stated two countries could seek financial penalties over excess diesel emissions that could total billions of dollars.

The German automaker's US unit and Robert Bosch, German multinational engineering and technology company requested the US High Court to reverse a unanimous ruling by the US Court of Appeals for the Ninth Circuit that said Utah's Salt Lake County and Florida's Hillsborough County could seek 'staggering' damages over updates made to polluting diesel vehicles after they were sold.

The request made to the High Court is reportedly latest turn in litigation that had dogged Volkswagen since it admitted in 2015 to rigging 11 million diesel vehicles worldwide with software that allowed them to evade government emissions tests. The company has paid more than $30 billion in fines and settlements because of the scandal, including some $23 billion in the US.

Erstwhile in June 2020, a verdict was passed by Ninth US Circuit Court of Appeals that ruled two counties have authority alongside the federal Environmental Protection Agency to regulate the updates that car manufacturers make to emissions systems in vehicles after they are sold. Florida's Hillsborough County and Salt Lake County in Utah were said to be seeking daily penalties of $5,000 per rigged diesel car for the local pollution they caused, with potential yearly damages of $11.2 billion.

Volkswagen argued that it should not pay those fines because the court decision misinterprets the federal Clean Air Act, which stated that it gives sole regulatory authority over manufacturer changes to car emissions to the Environmental Protection Agency (EPA). The company argued that the EPA approved a software update Volkswagen made to the cars before the diesel-emissions scandal broke and that its move was not akin to something a county could regulate, such as a local mechanic tampering with emissions.

In September 2020 the EPA had announced a US $1.5 billion settlement with Daimler to resolve allegations it engaged in emissions cheating.

Volkswagen Group of America expressed to the High Court that the Appeals Court decision threatens to throw one of America's largest industries into regulatory chaos, to the detriment of manufacturers, dealers, consumers, and the environment.

The Ohio Supreme Court on 26 January 2021 heard oral arguments in the state's lawsuit against Volkswagen over emissions damages from 14,000 Ohio-registered cars. Volkswagen said in court papers that Ohio's claims could total US $350 million per day, or more than the US $127 billion per year, over a multi-year period.

However, the Ohio Supreme Court stated that Volkswagen engaged in 'deceptive recalls' after vehicles were sold and it "seeks to hold Volkswagen responsible for modifying its customers' cars - cars that the customers had already purchased and used - to evade emissions laws."

The Court added it was "due to conduct that could not have been anticipated by Congress; Volkswagen's intentional tampering with post-sale vehicles to increase air pollution."