State Lawsuits Against VW Don't Look Good

Wyoming lawsuit against VW dismissed, a bad sign for other state emissions lawsuits against VW.

Posted in News

— State and local government lawsuits against Volkswagen over its emissions fraud are out of the question as a California federal judge blocked a lawsuit filed by the state of Wyoming.

VW has already racked up more than $20 billion in losses after admitting it cheated emissions tests for years, selling vehicles that should have never been legally sold.

In addition to $10 billion spent to buy back about 600,000 diesel vehicles in the U.S., VW also agreed to pay $2.7 billion to support environmental programs throughout the country to reduce nitrogen oxide emissions.

Wyoming received about $7.5 million to fund mitigation projects in the state and another $470,000 for the diesel cars purchased and leased in the state. However, Wyoming wasn't happy with the amount it received, so the state sued Volkswagen by claiming the automaker should pay even more in penalties for violating state emissions laws.

Filed by Wyoming Attorney General Peter Michael, the lawsuit alleges about 1,200 Audi, Porsche and VW diesel cars in Wyoming were affected by the emissions scandal. According to the complaint, VW should be forced to pay Wyoming civil penalties up to $13.6 million per vehicle, per year.

But the ruling by U.S. District Judge Charles Breyer blew those ideas out of the water when the judge dismissed Wyoming's lawsuit. The judge ruled state and local governments don't have the right to sue Volkswagen because Congress said the Environmental Protection Agency (EPA) should regulate emissions violations.

The judge said the illegal emissions activities started during manufacturing, which makes the issue a federal matter best handled by the EPA.

According to the ruling, the judge pointed to a section of the federal Clean Air Act that blocks states from trying to enforce standards related to the control of vehicle emissions, at least not when the emission systems were created at the factories.

The judge ruled that Volkswagen has been held accountable for its actions considering the automaker has spent about $20 million to cover settlements and penalties.

The judge pointed to a section of the federal Clean Air Act that blocks states from trying to enforce standards related to the control of vehicle emissions, at least when the emission systems were created and installed at the factories.

In support of Wyoming's lawsuits, other states and local governments filed briefs trying to convince the judge not to dismiss the Wyoming lawsuit, knowing full well that a dismissal in that case will leave all state cases worthless.