Dieselgate: US government sues Volkswagen

Volkswagen’s hopes of putting a bad news prone 2015 behind it have been dashed with the US government suing it in court over the Dieselgate scandal.

A Detroit court yesterday received a civil lawsuit filing from the US Department of Justice over Volkswagen AG’s alleged intentional violations of the Clean Air Act in its four-cylinder diesel emissions scandal.

With almost 600,000 cars sold in the US with the defeat device, which turned off full emissions controls in real-world conditions, Volkswagen is staring down the barrel of a potential $US90 billion ($A125b) in fines, with US law allowing for up to $37,500 ($A52,300) per affected vehicle.

It’s unlikely Volkswagen would be hit that hard in the official DOJ prosecution, though, because US government law-makers suggested in September that the fine would be in the region of $US18 billion ($A25b).

“The United States will pursue all appropriate remedies against Volkswagen to redress the violations of our nation’s clean air laws,” Assistant Attorney General John Cruden said.

Cruden, the head of the Environment and Natural Resources division of the Attorney General’s office, sued Volkswagen in the Eastern District of Michigan over four counts of violating the Clean Air Act, ranging from the defeat devices in the Dieselgate software to not voluntarily reporting its violations.

“We're alleging that they knew what they were doing, they intentionally violated the law and that the consequences were significant to health,” he insisted.

It could get worse for Volkswagen, though, with the Department of Justice still investigating the company over allegations of criminal fraud for falsely promising customers a standard of cleanliness and efficiency their cars couldn’t deliver.

The lawsuit will be heard in Detroit before being moved to California, where Volkswagen is also the subject of a number of civil class action law suits.

“Volkswagen will continue to work cooperatively with the Environmental Protection Agency on developing remedies to bring the TDI vehicles into full compliance with regulations as soon as possible,” Volkswagen said in a statement yesterday.

“In addition, we are working with Kenneth Feinberg to develop an independent, fair and swift process for resolving private consumer claims relating to these issues.

“We will continue to cooperate with all government agencies investigating these matters.”