Volkswagen's crimes against the environment as a result of its diesel emissions scandal are well known and well documented. They've now largely been adjudicated in the U.S., with the automaker pleading guilty to three felony charges in 2017 and agreeing to settlements with federal and state officials — and its customers and dealers — that reached into the tens of billions of dollars.
Yet a case now before the U.S. Supreme Court would expose Volkswagen and German auto supplier Robert Bosch to untold additional damages on behalf of local governments across the U.S. In our opinion, the circumstances of this case amount to a destabilizing second bite at the apple, and it should be overturned by the court.
After a federal judge in 2018 ruled that only the federal government can pursue claims under the Clean Air Act, the 9th U.S. Circuit Court of Appeals decided that Florida's Hillsborough County and Utah's Salt Lake County could seek to hold the companies liable under local laws and regulations barring tampering with vehicle emissions controls. If they are successful, other units of local government nationwide are likely to follow, seeking a payday.
Last week, the high court asked the Biden administration to weigh in on whether the German automaker and supplier should face the potential additional liability from local units of government.
For manufacturers of consumer products from automobiles to toys, the effects of this case are potentially fatal: the difference between surviving one shark bite or being consumed by thousands of piranhas. If the lower court's decision is allowed to stand, it will reduce the ability of regulators to bring scofflaws such as VW and Bosch to justice through binding settlements because those settlements would not be binding on lower government entities.
Let us be clear: We have zero sympathy for VW and Bosch over their illicit actions that led to the 2015 scandal. But we also feel that justice was done and the necessary punishments were meted out.
For the sake of this industry and other manufacturers, it is imperative that the Supreme Court accepts the case from the 9th Circuit and overturns an overly broad and potentially crippling ruling.