Bosch sought VW legal cover for defeat device in 2008, plaintiffs charge

Robert Bosch GmbH demanded eight years ago that Volkswagen AG indemnify it for using the emissions-cheating defeat device that it helped the automaker create for its diesel engines, U.S. car owners said in a new version of their lawsuit against both companies.

Bosch is accused in the lawsuit of conspiring with VW to develop technology that enabled diesel vehicles to evade pollution-control tests. After seeking legal protection from VW for its use of the device in the U.S., the German auto supplier continued to participate in the conspiracy to hide the cheating from regulators, car owners said in a court filing citing a 2008 letter from Bosch to VW.

“Plaintiffs do not have a full record of what unfolded in response to Bosch’s June 2, 2008, letter,” according to the filing. “However, it is indisputable that Bosch continued to develop and sell to Volkswagen hundreds of thousands of the defeat devices for U.S. vehicles” even after it acknowledged in writing that using the software was illegal in the U.S.

Bosch previously rejected as “wild and unfounded” car owners’ claims that 38 of its employees conspired with VW. Matthew Slater, an attorney for Bosch, didn’t immediately respond to phone or e-mail messages seeking comment on the newly disclosed allegations.

U.S. settlements 

Volkswagen has already agreed to settlements that may total $16.5 billion (14.7 billion euros) to get 482,000 emissions-cheating diesel cars off U.S. roads. Those agreements cover car owners, the U.S. government and 44 states. That also includes $1.2 billion for VW dealerships, as well as a $603 million accord with states in the U.S. that isn’t part of the settlement to be considered for final approval later this year.

Volkswagen still faces criminal probes, efforts by car owners in Europe to get U.S. Justice Department documents to buttress their own civil suits and a sales ban on many VW models in South Korea. The European Union, where most of the 11 million cars with the defeat devices were sold, is also pressuring VW to compensate car owners.

Bosch, which isn’t part of any of the VW settlements, developed software to enable Volkswagen to beat emissions testing in the U.S. on its diesel vehicles, consumers claim. They’re seeking damages from Bosch beyond VW’s payments for additional compensation for owners and leasers of the vehicles.

‘Critical role’ 

Lawyers for American car owners revised an earlier lawsuit in August to enhance accusations against Bosch over its alleged role in the decade-long scheme. A copy of the lawsuit filed Friday in a San Francisco federal court removed blacked-out portions to provide a more complete picture of the allegations against Bosch.

“The evidence already proves that Bosch played a critical role in a scheme to evade U.S. emission requirements,” consumer lawyers said last month in a partially sealed filing. Among the details included in the unsealed version of the filing Friday was the demand for indemnification for anticipated liability arising from the use of the “defeat device,” as Bosch called it in the letter. 

“Volkswagen apparently refused to indemnify Bosch, but Bosch nevertheless continued to develop the so-called ‘akustikfunktion’ (the code name used for the defeat device) for Volkswagen for another seven years,” the consumer lawyers wrote.

On/off switch 

The term akustikfunktion dated back to use by Audi in the 1990s when it “devised software that could switch off certain functions when the vehicle was in test mode,” the lawyers alleged.

Bosch concealed its knowledge of the defeat device in communications with U.S. regulators when questions were raised about the emission-control system in VW vehicles and “went so far as to actively lobby lawmakers to promote Volkswagen’s ‘Clean Diesel’ system in the U.S,” they said.

Bosch maintained a “tight grip” over the engine control module software used on the VW vehicles and any modifications made to it, the lawyers claimed. Bosch “knew that Volkswagen was using Bosch’s software algorithm as an ‘on/off’ switch for emission controls when the class vehicles were undergoing testing,” they said in the filing last month.

“Written communications between and within Bosch and Volkswagen describe the ‘akustikfunktion’ in surprising detail,” according to the unsealed document. “In e-mails sent as early as July 2005 from VW AG’s Andreas Specht” to four Bosch employees, “Specht discussed emissions measurements from vehicles using the ‘akustikfunktion’ in connection with U.S. emission compliance.” The names of the Bosch people remain sealed.

E-mail request 

In March 2007, an unidentified Bosch employee e-mailed VW requesting that it remove the description of the function from fuel pump specification sheets provided in the U.S., according to the complaint. Shortly after the exchange, VW developers confirmed to Bosch that the akustikfunktion wouldn’t be listed in the U.S. documentation, according to the filing.

The consumers allege that Bosch misled U.S. regulators as they provided specific information “about how Volkswagen’s vehicles functioned and unambiguously stated that the vehicles met emissions standards.” Employees at Bosch’s North American unit “frequently communicated with U.S. regulators and actively worked to ensure the class vehicles were approved.”

Bosch’s North American unit also “regularly communicated to its colleagues and clients in Germany about ways to deflect and diffuse questions from U.S. regulators,” particularly the California Air Resources Board, according to the unsealed complaint.