Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES NEWS: West Virginia sues Volkswagen for using “defeat device” to dodge emissions testing, (Oct 7, 2015)

By Michael Menzhuber, J.D., LL.M.

The West Virginia Attorney General has filed a complaint in the Circuit Court of Kanawha County, West Virginia, alleging that Volkswagen of America Inc. violated the state’s Consumer Credit and Protection Act (CCPA) by fraudulently manufacturing, advertising, and selling a line of “clean diesel” vehicles with turbo-charged direct injection (TDI) engines (State of West Virginia v. Volkswagen of America, Inc., October 2, 2015).

The complaint further alleges that West Virginia consumers did not receive vehicles that would perform as represented to them by Volkswagen because: (1) they were not environmentally friendly; and (2) their gain in performance, fuel efficiency, and their Environmental Protection Agency (EPA) certification was the result of Volkswagen’s circumventing required environmental controls.

According to the complaint, Volkswagen’s TDI “clean diesel” vehicles, introduced in 2008, were advertised as being “environmentally friendly” and the “most clean vehicles in the U.S.” Volkswagen sold these vehicles at a premium above the cost of standard gasoline engines. According to the complaint, Volkswagen purposely engineered these vehicles with software (defeat device) that: (1) allowed emissions controls to operate normally when a vehicle was undergoing emission testing; and (2) suppressed emissions controls to increase performance and fuel economy when the vehicle was operating normally. The West Virginia Division of Motor Vehicles (DMV) identified 2,684 Volkswagen TDI vehicles, from model years 2009 to 2015, registered in the state.

A study released by the Center for Alternative Fuels, Engines & Emissions (CAFEE) at West Virginia University in May 2014 produced evidence that Volkswagen was cheating U.S. emissions testing on at least two of its TDI clean diesel vehicles. On September 18, 2015, the EPA issued a Notice of Violation (NOV) to Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc. for failure to comply with the Clean Air Act regulations in 482,000 diesel vehicles sold in the United States since 2008. According to the EPA NOV, Volkswagen installed its defeat device on the following vehicles: 2009-2015 VW Jetta; 2009-2015 VW Beetle; 2009-2015 VW Golf; 2012-2015 VW Passat; and 2009-2015 Audi A3 (collectively, “affected vehicles”).

The complaint against Volkswagen seeks orders that: (1) permanently enjoin and restrain Volkswagen from engaging in unfair or deceptive acts, practices, and advertising, in violation of West Virginia’s CCPA; (2) require Volkswagen to pay appropriate restitution and refund excess charges to West Virginia consumers who purchased affected vehicles; and (3) pay civil penalties, attorneys’ fees and all other costs associated with matter.

The case is No. 15-C-1833.

Attorneys: Patrick Morrisey, Office of the West Virginia Attorney General, for the State of West Virginia.

Companies: Volkswagen of America, Inc.

News: StateUnfairTradePractices WestVirginiaNews