Policy & Politics Volkswagen clean diesel FTC lawsuit

Published on March 30th, 2016 | by Tina Casey

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Now FTC Piles On, Sticks Volkswagen With New “Clean Diesel” Lawsuit

March 30th, 2016 by  

Note to auto manufacturers (we mean you, Volkswagen): if the US Environmental Protection Agency can’t get you, the Federal Trade Commission will. Volkswagen has been fighting EPA over a recall strategy for US auto buyers who bought into its phony “clean diesel” promotions for VWs and Audis, and now the company is getting double-teamed. Yesterday the FTC filed a federal complaint seeking compensation for 550,000 US consumers who bought or leased what they thought was a low-emission diesel car.

Clean Diesel Woes For Volkswagen

For those of you new to the topic, Volkswagen’s “clean diesel” woes began last fall, when researchers with the University of West Virginia discovered evidence that the company had deliberately installed software to deceive the federal emissions tests required for US sales. An EPA investigation backed that up, resulting in recall negotiations. Volkswagen dug in its heels and the recall talks soon stalled, so in January 2016 EPA teamed with the Justice Department to file a federal lawsuit claiming Clean Air Act violations.

That brought Volkswagen back to the recall table — or maybe not. Last week a federal judge agreed to extend the EPA deadline and Volkswagen cited good progress on the talks, but yesterday’s FTC clean diesel announcement indicates that the company is in need of some additional prodding.

Volkswagen clean diesel FTC lawsuit

More Clean Diesel Woes

Citing ads such as those in the screenshot from the “Three Old Wives Talk Dirty” TV spot above, the FTC Volkswagen lawsuit alleges that Volkswagen deceived customers between 2008 and 2015 on a number of diesel models including Jettas, Passats, Touareg SUVs, and TDI Audis.

…during this seven-year period Volkswagen deceived consumers by selling or leasing more than 550,000 diesel cars based on false claims that the cars were low-emission, environmentally friendly, met emissions standards and would maintain a high resale value…

The lawsuit also notes that Volkswagen’s campaign was particularly aggressive, including high profile Super Bowl ads and a social media component that provided technical details of particular interest to knowledgeable, environmentally conscious consumers:

…Volkswagen promotional materials repeatedly claimed that its “Clean Diesel” vehicles have low emissions, including that they reduce nitrogen oxides (NOx) emissions by 90 percent and have fewer such emissions than gasoline cars…

That sort of talk is designed to attract more consumers to the diesel market, with a promise of both higher performance and lower emissions that typical gasmobiles. In a blog post yesterday, the FTC affirmed that the clean diesel campaign appeared to be a great success, resulting in a substantial increase in sales.

However, as is now known, the supposedly low-emission diesel cars were “rigged” to perform up to par during lab tests. According to the FTC, under real life driving conditions the pollute-mobiles actually clocked in at up to 4,000 percent above the legal limit for NOx emissions.

FTC Is Coming For You…

The FTC has some other bones to pick with Volkswagen’s promotional material. For example, the company claimed that its “clean diesel” cars were street legal in every state, which could not be the case given the rigged software.

The agency also charged that Volkswagen’s deception ensnared dealers and other unwitting allies along the marketing chain, and that it put other auto manufacturers at an unfair competitive disadvantage.

The FTC complaint was filed in federal court in the District of California, San Francisco Division. The agency argues for “permanent injunctive relief, rescission, restitution, the refund of monies paid, disgorgement of ill- gotten monies, and other equitable relief,” paying particular attention to the NOx issue:

….After testing, the software resumes its default mode: calibrating the emission control sy stem to allow NOx emissions at as much as 4,000 percent above the legal limit, which enables more powerful and durable engine performance…

For those in court unfamiliar with the impacts of NOx, FTC offers this observation on the adoption of emissions restrictions on NOx by EPA back in 2007:

Nitrogen oxides (“NOx”) are a group of dangerous atmospheric pollutants that contribute to a host of harms to the environment and human health, including smog, acid rain, water quality deterioration, childhood asthma, other respiratory ailments, and premature death.

Yikes! Way to make a case for zero emission vehicles. Volkswagen has put the blame on EPA for enforcing emissions regulations that are too strict for compliance, but it looks like some auto manufacturers have gotten the message sooner than others.

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Image (screenshot): via US Federal Trade Commission.





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About the Author

specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Tina’s articles are reposted frequently on Reuters, Scientific American, and many other sites. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.



  • Andy

    Why haven’t we seen other car manufacturers sue VW over this? You would think they would do so considering the sales they lost because of VW’s “better” diesel tech.

    • Joe Viocoe

      Kinda hard to prove that in court. Who can be sure what other automakers were being cross shopped, and what factors were at play.

  • neroden

    Remember, VW deliberately committed *fraud*. Get a clue.

    • Clear cut

      Why should I trust EPA more than WV. It is one word agains another. They can provide any test results they need and so can VW.

      • Knetter

        Um maybe because VW admitted to systematically cheating U.S. air pollution tests. So there goes that argument.
        EPA 1
        VW 0

        • Clear cut

          Who did? VW America boss? Why would not he. He admitted, resigned, probably got paid.

          • Knetter

            Try again:
            Volkswagen chief executive Matthias Müller has apologized for cheating diesel car emissions tests on his first official US visit since the scandal broke in September.
            Got any other stupid excuses?

          • Harry Johnson

            Willful ignorance should also be criminal.

          • JamesWimberley

            This was a German company. Everything must have been perfectly documented. Winterkorn knew: he had a reputation as a brilliant engineer and came to VW from Bosch, the supplier of the engine control module.

          • Ivor O’Connor

            racial stereotyping?

          • JamesWimberley

            If that were applied to blogs, we’d lose a good share of the commenters.
            Reminds me of an anecdote of de Gaulle during the May 1968 protests. Spotting a protestor waving a placard with the message “Mort aux cons!”, he austerely remarked to a companion, “Vaste programme …”

          • Joe Viocoe

            Umm… they were discovered first by independent testers IN GERMANY… who then called a counterpart independent tester in the U.S., at which point VW admitted guilt.

            You are so set on blaming the government for all problems in this world.

      • Bob_Wallace

        VW’s cheating was discovered by non-EPA investigators.

      • Radical Ignorant

        How can you know that Earth is round. It’s just a word. How can you know that there are other people commenting here? Maybe we are all the same person paid to make some noise?

        Sorry, but this question is just so hard to treat seriously. You know – VW has few bucks to prowe EPA is wrong. And like in science you can reprodyce the results.

  • Ivor O’Connor

    If government agencies are going to set mandates then they need to enforce the mandates via tests. If they don’t have the money there are many solutions. For instance they can mandate the car companies pay for the testing facilities and third party testing personnel. These government agencies, like the FTC, doing the suing should be dismantled and replaced with outside private companies that earn their pay based on performance.

    Here is an analogy. You don’t let kids say they learned the subject material. You test. And if the teachers want to sue the kids for saying they learned the material the teachers should be fired. The teachers are obviously incompetent for not having tested. The teachers should be replaced with an education system that actually is paid based on the performance of the kids.

    Of course it is so much more gratifying to fight the symptom. Knee jerk reactions are after all politically expedient. Especially when the public does not have time to think about a subject.

    • neroden

      Remember, VW deliberately committed *fraud*.

      • Ivor O’Connor

        And the parents says “remember, the kid purposely lied” to the teacher…

        • Knetter

          Not at all equivalent, come on Ivor. They cheated, lied to the very customers who enable their profitability not just our government in an effort to enrich themselves. On a massive scale and comparing it to some kid lying is kinda underhanded. When they make the claim that their product falls within certain parameters when in fact they have to cheat to attain them the blame doesn’t fall on our government it’s their own damn fault for cheating. The whole blame the government is getting old.

          • Ivor O’Connor

            Last I knew VW did admit to it. However VW did not know who all knew about the cheating. Apparently it may have been a department within. Maybe localized to a few individuals. It would be great to know if this is just spin. Did the top brass know? This may be similar to the Space Shuttle explosion. A few engineers knew but it was kept localized due to pressures.

            Either way it does not matter. If our government mandates something it is up to our government to verify. Trusting without verification is so stupid only our government would try to get away with it and then point the finger somewhere else.

          • Bob_Wallace

            Perhaps if libertarians and their right-wing buddies were not attempting to shrink our government enough to drown it in a bathtub our agencies would have the money it takes to do the testing we need.

            BTW, I just want to pass on a “screw you” to all you tax-cutting fiends who have cut the budget for the BLM so much that they can no longer afford to maintain their roads.

          • RobertM

            I am sorry but what part of the monster known as the US federal government is shrinking. Maybe if Liberal spent less time increasing the duties of government they could go back to do a few well and spend less time wasting money.

          • Ivor O’Connor

            Exactly.

          • Bob_Wallace

            As of January 2015 the federal government had shed about 67,000 jobs.

            Non-military budgets have been frozen or cut.

            If we didn’t waste so damn much money on an overinflated military and required the wealthy to pay a fair share would be able to afford a few nice things. Like affordable education and other investments in our future.

          • RobertM

            I am sorry but something like 80% of the budget comes from the wealthy I think that pay more then there fair share. Just because we have a really crappy education system has nothing to do with money. We spend a huge percentage of our GDP on education. If we cut our education spending in half we might actually have an affordable education system.

          • Knetter

            How old are you? Is there anything in that skull? If we cut education we might have an affordable system? Ya we cut the system anymore we definitely end up with Heir Drumpf. No thanks, I’d rather take all our proxy wars keep the cash, spend a 1/3 on defense and use all that cash for education, and to fund abortions and renewables.

          • Ivor O’Connor

            Well I like most of your ideas on abortions and renewables. Though I’d go much further and cut the defense down to something proportionate to other nations based on GDP or something.

            But our education system has severe problems. It is like our medical system. The most expensive and near the worst at the same time. Clearly there is something more that is needed. Maybe we need Elon Musk’s solution. He made his own school where he sends his own kids and some company employees. The school is far different than normal schools in that the kids go at their own pace.

          • eveee

            We would have a cheaper system. And an even more ignorant electorate. All depends on what your goal is. And values, eh?

          • marcus

            Well since the rich actually make most of the money made in America its normal that they pay most of the taxes. If i mad 1billion and you 1million i should pay 1000 times more than you that normal, its not even an issues of fair or just.

          • Bob_Wallace

            Heard an interesting interview with the head of the IRS this afternoon. Turns out that due to budget cuts the IRS has been losing staff and is less and less able to investigate tax fraud.

            Really smart move, Republicans.

          • eveee

            You could cut your transportation budget in half and have a really great skate board.

          • eveee

            Sorry. Not buying it. Which is more wasteful. Spending a little more checking to see if food is safe, or spending less and allowing more people to get sick?
            Whats the effect of laissez faire government? More deaths. Lower standards.
            There might be places to cut effectively. This isn’t a good example.

          • nitpicker357

            It was VW’s responsibility to meet the standards. The U.S. government should have done a better job testing, which would have saved many lives and a lot of money. In order to encourage others to actually comply with standards, it is important that fines actually be levied. All of the FTCs claims appear valid.

          • Ivor O’Connor

            For sure they need to pay. However let them pay for testing centers and such to prevent this from happening elsewhere.

          • Steve Grinwis

            The government did test these cars. And they did pass those tests. The problem is that VW nefariously designed the car to defraud the standard test.

          • Knetter

            BS some department within were the only ones to know about it, I’m not buying that excuse for a second. And even if that is the unlikely case does it change anything? No it just means they are completely inept and not committing premeditated manslaughter. The Challenger Shuttle is much more understandable and is rather laughable to compare. If you want a comparison I would’ve said it’s closer to the CIA importing crack cocaine to the inner city, that’s how fucked up VW’s position is. Our government mandated it and tested it and VW cheated.

          • Ivor O’Connor

            I assume they are messed up unless tested. As history has proved time and time again.

          • JamesWimberley

            Are you suggesting that when the FDA examines an application to licence a new drug it should replicate all the trials the drug company has appended to that application? Or that the US government shouldn’t trust the reports of jobs and sales that millions of companies file every month with statistical agencies? Government simply can’t double-check everything, even in Stalin’s USSR. For a great deal, society runs on mutual trust, reinforced by punishment for those who abuse it. Like Volkswagen.

          • Ivor O’Connor

            I believe the drug tests are performed by third parties to verify the drug company claims. If our government actually forced the car manufacturers to do the same thing, pay for test centers and personnel to do third party testing, our pathetic government would not have a chance to look so stupid.

            Then again our government wants to look stupid so it can ask for more money and trip over itself in even more ways.

          • eveee

            Better check on that Ivor.

            “Drug companies seeking to sell a drug in the United States must first test it. The company then sends CDER the evidence from these tests to prove the drug is safe and effective for its intended use. A team of CDER physicians, statisticians, chemists, pharmacologists, and other scientists reviews the company’s data and proposed labeling. If this independent and unbiased review establishes that a drug’s health benefits outweigh its known risks, the drug is approved for sale. The center doesn’t actually test drugs itself, although it does conduct limited research in the areas of drug quality, safety, and effectiveness standards.

            Before a drug can be tested in people, the drug company or sponsor performs laboratory and animal tests to discover how the drug works and whether it’s likely to be safe and work well in humans. Next, a series of tests in people is begun to determine whether the drug is safe when used to treat a disease and whether it provides a real health benefit.

            For more information about the drug development and approval process, see How Drugs Are Developed and Approved.”

            http://www.fda.gov/Drugs/DevelopmentApprovalProcess/default.htm

            http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/default.htm

            Drug testing is done by the manufacturers submitting applications. The tests are reviewed. Don’t see any third party testing described.

            This is just like the EPA. EPA doesn’t do the full tests the mfrs do. They review mfrs tests. Thats one reason EPA got fooled.
            The fooling was intentional. VW deserves a kick in the pants.

          • Ivor O’Connor

            Damn, looks like you are right eveee. Good catch. Thanks.

          • eveee

            Its a t disconcerting that the manufacturers are testing their own stuff, isn’t it? I didn’t realize until recently, too. Same with EPA testing. There is a limited amount of gov checking. There just are not enough facilities, people, and money to keep track of what the mfrs are doing.
            I sure hope they keep up with things like food safety. Really.

          • Ivor O’Connor

            Third party testing, where the manufacturers foot the bill, could easily take care of this. A pay to play scenario. And the third party testing centers could then be spot checked by other third party test centers. Where the EPA is responsible for setting up the system and can then step back and monitor the system is running while they then get to work setting up systems in other areas. I’m getting the impression the EPA just wants to grow itself rather than help the planet.

    • Matt

      The clean air rules were passed by congress. The lack of testing can also be traced to a lack of funding, GOP know if they don’t fund a agency it can’t enforce it’s rules. Of course they could take the “whistle blower” approach. Any person, lab, or school that can prove a car maker didn’t meet the requirements gets 10% of final fines the company pays.

      • Ivor O’Connor

        There are three sides of whistle blower rules. The stated idealistic goals and benefits. The backlash from the people affected. And the de-facto imprisonment of your person along with the vilification of your character followed by unreasonable animal hatred of all republicans and most democrats. Don’t go blowing any whistles!

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