VW Challenges U.S. Court on Diesel Cheating Penalties, Jurisdiction

Volkswagen AG says it remains fully committed to settling U.S. claims against it for rigging nearly 600,000 of its diesels to evade emission standards. But the company tells a federal court the penalties sought against it are too high.

VW also is challenging a lawsuit filed in January by the U.S. Dept. of Justice, The New York Times reports. The company argues the department’s complaint fails to allege facts strong enough to warrant any penalties, according to the newspaper.

The Times says VW questions the court’s jurisdiction too. The company argues that the cheater cars were sold through independent dealers, not by VW itself. It further claims the statute of limitations shields it from any punishment for its conduct before 2010.

But VW dismisses the combative tone of its filings this weeks as a routine part of the legal process and has “no bearing” on the company’s commitment to resolve the government’s claims.

U.S. District Judge Charles Breyer, who is overseeing the case from his court in San Francisco, said earlier this week the two sides had made “substantial progress” in reaching a deal by his June 21 deadline. Breyer also reiterates that any agreement must go beyond paying regulatory fines and either repairing or buying back the cheater vehicles.

Breyer insists that a settlement include compensation for owners, remediation for the environmental damage done and VW-funded clean-air research, Bloomberg News reports. The news service says VW could pay as much as $10 billion to resolve civil claims. VW has set aside €7 billion ($7.8 billion) to cover the worldwide costs of recalling 11 million cheater diesels.