For automobile manufacturers, maintaining compliance with numerous regulations—while burdensome—is a necessary consequence of participating in an industry that is kept in check by environmental concerns. Among the many regulations automakers have to work with are limitations on emissions. Manufacturers are accountable for meeting emissions standards and can face civil and even criminal prosecution if they do not.
German automaker Volkswagen is currently embroiled in legal concerns over the fact that the company sold hundreds of thousands of diesel cars in the United States along with software that allowed the company to avoid abiding by emissions standards. In response to the incident and to announcements that regulators in other countries would be looking into Volkswagen imports, the company has apologized and admitted that roughly 11 million vehicles sold worldwide are estimated to have irregularities in diesel-emission readings.
Needless to say, the whole fiasco is bound to cost the company a lot of money, and the company’s CEO has expressed regret over the scandal and committed to cooperating in settling the matter. According to sources, it is difficult to estimate at this time how costly the scandal will be for the company, because in addition to civil and criminal liability, the company is also going to be facing litigation from private plaintiffs.
The criminal investigation, which is being handled by the Environment and Natural Resources Division of the Department of Justice, is naturally aimed at turning up evidence that Volkswagen knowingly defrauded the government and consumers by intentionally evading emissions standards. As commentators note, given that the company has admitted wrongdoing, it is quite likely that the investigation will turn up such evidence, though it remains to be seen how clear that evidence will be.
In our next post, we’ll continue looking at the corporate criminal case, focusing especially on the how the element of knowledge is dealt with in such cases and why it is important for companies facing federal criminal charges to work with experienced legal counsel.