Friday, February 5th, 2016
Acting Attorney General John J. Hoffman announced today that New Jersey has filed a lawsuit against Volkswagen Group of America, as well as other companies related to Volkswagen, alleging that it perpetrated a “massive” fraud on consumers and violated the State’s clean air statutes by selling diesel vehicles equipped with software that deactivated their on-board emission controls except during emissions testing.
“For the past decade Volkswagen engaged in one of the largest frauds in the history of the automobile industry,” the State’s lawsuit asserts. “It developed and distributed into the marketplace sophisticated software to evade emissions requirements, it misled regulators about the true environmental impact of its vehicles, and it misled consumers about the products that it was marketing as supposedly good for the environment.”
Filed today in Superior Court in Hudson County, the State’s two-count Complaint alleges that Volkswagen “profited greatly” from its effort – launched in 2005 – to gain a greater share of the U.S. passenger vehicle market by quietly developing, then deceptively promoting, diesel vehicles that appeared to be environmentally friendly, but in fact were equipped with pollution control systems that only functioned during emissions testing.
Specifically, the lawsuit notes, Volkswagen steadily increased its passenger vehicle sales over time and, as of 2014, accounted for approximately 70 percent of new diesel passenger car sales in the U.S.
The State’s Complaint alleges that Volkswagen fraudulently increased its sales and market share “at the expense of the unsuspecting public.” The company did so, the lawsuit alleges, by selling ostensibly superior cars at “inflated purchase prices” that, far from being more protective of the environment, spewed unlawful quantities of NOx into the air during everyday use. NOx has been linked to multiple respiratory diseases.
“Our lawsuit alleges that Volkswagen put profit ahead of honesty, integrity, fair business practices and – most disturbing of all – the well-being of people living and breathing the air here in New Jersey and across the country,” said Acting Attorney General Hoffman. “Like any other business – large or small – auto makers have an obligation to represent the products they sell honestly, and to ensure those products comply with all applicable laws. When they fail to do so, as we allege was the case with Volkswagen, we will hold them accountable.”
According to the State’s lawsuit Volkswagen, which also sells Audi and Porsche vehicles, equipped 2.0 liter diesel vehicles sold under all three brand names with a software “defeat device” capable of rendering their emission control systems inoperative except during testing. Those cars included: Jetta (2009-2015), Jetta Sportswagen (2009-2014), Beetle (2012-2015), Beetle Convertible (2012-2015), Golf (2010-2015), Golf Sportswagen (2010-2015), Passat (2012-2015) and Audi A3 (2010-2015.)
A number of 3.0 liter diesel models also were equipped with the defeat devices, including: Volkswagen Touareg (2009-2016), Porsche Cayenne (2013-2016), Audi A6 Quattro (2014-2016), Audi 7 Quattro (2014-2016), Audi A7 Quattro (2014-2016), Audi A8 (2014-2016), Audi A8L (2014-2016), Audi Q5 (2014-2016) and Audi Q7 (2009-2016).
Current estimates are that Volkswagen sold approximately 580,000 vehicles equipped with the defeat software in the United States. Based on records maintained by the State, approximately 17,420 such vehicles have been registered in New Jersey.
Regarding air quality and public health, the lawsuit notes that NOx pollution has been shown to contribute to harmful ground-level ozone (smog) and fine particulate matter (soot), and that exposure to NOx and its byproducts has been linked to such serious health problems as cardiopulmonary disease, lung cancer, chronic obstructive pulmonary disease and exacerbation of asthma.
Regarding Consumer Fraud Act violations, the lawsuit filed today alleges that Volkswagen harmed buyers in the first place by misleading them into thinking they were getting cleaner-operating, better performing cars than they actually were. It also alleges that certain Volkswagen, Audi and Porsche buyers now confront additional harm going forward, because bringing their cars into compliance with applicable emission standards will significantly reduce their economy and power.
In addition, the Complaint suggests, impacted owners are now saddled with cars stigmatized by scandal, and may find the vehicles’ resale values significantly diminished.
The Complaint alleges that Volkswagen has violated the State’s Air Pollution Control Act by purposely causing required emission control equipment not to operate in its vehicles, and by increasing “ambient concentrations of fine particles, ground level ozone and nitrogen oxides, each of which has been linked to adverse human and environmental impacts.”
Relief sought under the suit includes a finding by the court that Volkswagen acted illegally, and the imposition of maximum civil penalties for both the alleged Air Pollution Control Act and Consumer Fraud Act violations. The Complaint also asks the court to require that Volkswagen pay restitution to consumers materially harmed by its conduct.
Assistant Attorney General David C. Apy is handling the Volkswagen matter on behalf of the State, working in collaboration with outside counsel Lowenstein Sandler LLP.