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HENRY B. LaTORRACA

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Volkswagen faces multi-billion dollar lawsuit from regulators

| Jan 7, 2016 | Uncategorized |

California residents may have heard about the emissions reporting scandal involving German car manufacturer Volkswagen. In September, the car maker admitted to fitting some of its diesel vehicles with devices that provided false information for emissions tests. On Jan. 4, the U.S. Justice Department announced that it had filed a multi-billion dollar lawsuit against Volkswagen.

Volkswagen is being sued by the Justice Department for allegedly violating environmental protection laws. Though the Justice Department is seeking $48 billion in damages, analysts say that the lawsuit will probably be settled for a lesser amount. However, the compensation that is being sought from Volkswagen in the business litigation is more than analysts were expecting. U.S. regulators previously told Volkswagen that it would likely face more than $18 billion in fines.

According to the complaint filed against Volkswagen, the car manufacturer installed illegal devices on almost 600,000 vehicles that were sold in the U.S. The devices allegedly impaired the emission control systems on the cars. The complaint seeks up to $3,750 for every device that was used and an additional $37,500 for each day that the devices were used. The day after the lawsuit was announced, shares in Volkswagen fell by 6 percent.

The owners of a company that is being sued may be able to work out a settlement outside of court that is much less expensive than the original amount being sought by the plaintiff. An attorney may be able to represent a business and help negotiate for the lowest possible settlement. If a business has already been ordered to make payments by the court, an attorney may be able to help the business to appeal the court’s decision.

Source: Reuters, “VW faces billions in fines as U.S. sues for environmental violations,” Julia Edwards, Georgina Prodhan, Jan. 6, 2016

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