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Volkswagen claims that it's making progress on "clean diesel" recall talks in US, but a new lawsuit indicates the company is in need of a little prodding.

Policy & Politics

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

Volkswagen claims that it’s making progress on “clean diesel” recall talks in US, but a new lawsuit indicates the company is in need of a little prodding.

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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Tina specializes in military and corporate sustainability, advanced technology, emerging materials, biofuels, and water and wastewater issues. Views expressed are her own. Follow her on Twitter @TinaMCasey and Google+.

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