Economy & Politics

Decision could open door to further high fines

VW wants to vigorously defend itself against the decision of the court of appeal. Photo: dpa / Sina Schuldt

Diesel scandal and no end: Volkswagen is again threatened by expensive consequences due to the earlier exhaust gas manipulations in the USA. The decision of an appeals court could open the door to further high fines. VW wants to defend itself vigorously.

Anchorage / Leipzig – Volkswagen has to fear further sensitive fines in the USA in the “Dieselgate” affair. An appeals court ruled on Monday (local time) that additional penalties from two districts of the states of Florida and Utah were permissible despite settlements that had already been closed. Although VW has already been held accountable for violations of the nationwide US Clean Air Act due to manipulated exhaust technology due to diesel cars, regional authorities may continue to impose sanctions. That could open the door to renewed high fines.

The judges said they were aware that their decision could lead to “breathtaking strains”. VW noted in a statement that the court’s line contradicts other U.S. jurisdiction. The company announced that it would vigorously defend itself and have the case reviewed again – if necessary by the Supreme Court of the United States. VW had admitted exhaust gas manipulation on a large scale in September 2015. The company has already booked costs of EUR 31.3 billion for the scandal – the majority of which related to penalties and compensation in the USA.

Admitted rule violations for years

Volkswagen had been sued in the “Dieselgate” affair for environmental violations by the Salt Lake County in Utah and Hillsborough County in Florida. Should the judge’s decision finally become final, the districts could theoretically claim billions in damages from the automaker. According to US judge Charles Breyer, who initially decided in favor of VW in 2018, the burden on the company based on the regional catalog of fines in the two districts could potentially amount to up to $ 11.2 billion a year. VW has admitted violations of the rules to the US authorities for years.

Despite the new legal anger, investors were initially unimpressed. The VW preference share rose strongly on Tuesday in line with the entire European auto sector, which was strong thanks to hopes of easing and economic aid in the corona pandemic. Likewise, investors are currently speculating on a new car purchase premium as part of an economic stimulus package that the leaders of the black-red coalition wanted to resolve on Tuesday to deal with the Corona crisis.

The lawsuits relate not only to the US subsidiary of the VW brand, but also to the manufacturers Audi and Porsche, which also have exhaust gas values ‚Äč‚Äčthat have been reduced using a special defeat device. In addition, among those accused by the US districts is the German supplier Bosch, who is said to have supplied the manipulation software and had also already agreed on expensive comparisons with US plaintiffs.

Penalty of billions for criminal offenses

For VW, the exhaust gas affair in the United States – apart from a continuing conflict with the SEC stock exchange – had actually long since been ticked off. The company made a pleading of guilt in court and was not only subject to enormous sanctions under civil law, but also paid a billion dollar fine for criminal offenses. Criminal charges and arrest warrants issued by the U.S. judicial authorities have been filed against several suspects, including ex-CEO Martin Winterkorn. Two former VW employees have already been sentenced to years in prison and high fines.

For the Wolfsburg-based company, the exhaust gas scandal is still ongoing after almost five years. Just recently, the Federal Court of Justice in Karlsruhe had ruled for the first time in the highest judicial instance that VW had improperly installed the disputed exhaust technology in its vehicles and that buyers in Germany can also claim damages. The judgment is groundbreaking for many thousands of individual lawsuits still pending. According to VW, around 60,000 procedures are still open nationwide.

VW had previously negotiated a settlement as part of a large model declaratory action with around 240,000 diesel owners, for which around 750 million euros should flow. In many individual proceedings, the company has already settled out of court with customers. In addition, VW is also facing lawsuits from numerous investors demanding billions in compensation for losses in share prices due to the scandal. VW rejects the accusation that it informed the capital markets too late about the financial extent of the fraud.

Federal Ministry of Transport must grant inspection of files

The Federal Ministry of Transport must grant the German Environmental Aid (DUH) access to files relating to the diesel scandal. This emerges from a decision of the Federal Administrative Court in Leipzig published on Tuesday ((BVerwG 10 B 18.19). The highest German administrative judges did not allow the Ministry to appeal against the appeal decision of the Higher Administrative Court Berlin-Brandenburg. The OVG had decided at the end of March last year that the information of the public is more important than the interest in confidentiality (OVG 12 B 14.18).

In the process, the association had, according to its own information, since July 2016 asked to be able to view documents from the Volkswagen investigation commission that the Ministry of Transport had used. From autumn 2015, the commission held talks with representatives of Volkswagen, among others, to investigate whether the automaker had deliberately circumvented environmental standards.

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