Three U.S. states plan lawsuits over Volkswagen diesel pollution

By David Shepardson

WASHINGTON (Reuters) – Three U.S. states plan to unveil new lawsuits against Volkswagen AG <VOWG_p.DE> on Tuesday tied to the automaker’s sale of diesel vehicles with emissions-cheating software, even after they announced settlements with the German automaker in June.

Maryland Attorney General Brian E. Frosh said in a news release that he would disclose details of the Volkswagen suit on Tuesday that accuses VW of violating state environmental laws and defrauding regulators.

New York state and Massachusetts are filing separate lawsuits related to the same issue, according to a source. Frosh said the states are seeking civil penalties, injunctive relief and other penalties.

New York state said last month it had reached a “partial settlement” with the automaker – joined by 43 other states including Maryland and Massachusetts – worth a total of $603 million. Volkswagen said that settlement was to resolve existing and potential state consumer protection claims.

The suits are the latest sign the automaker’s legal troubles stemming from the massive diesel emissions scandal are far from over. VW also faces an ongoing Justice Department criminal investigation.

Last month, the German automaker announced a settlement with federal and state regulators and lawyers for 475,000 owners of 2.0 liter polluting diesel cars worth up to $15.3 billion – including the $603 million state settlement.

A spokesman for New York Attorney General Eric T. Schneiderman declined to comment Monday or confirm the state is filing a lawsuit.

“These partial settlements announced today exact a stiff price from Volkswagen for its deception of consumers and the environmental damage it has caused in New York and across the country,” Schneiderman said last month, noting the state’s ongoing investigation.

Volkswagen faces a July 26 hearing before a federal judge seeking preliminary approval for its $14.7 billion settlement with federal regulators and owners, and it still must address claims from 85,000 owners of larger 3.0 liter vehicles and its dealers.

Last week, California’s chief air regulator rejected a proposed recall plan from Volkswagen to fix 3.0-liter diesels in the state equipped with devices designed to evade emissions tests.

The California Air Resources Board said it will not have enough data at least until December to make a determination on whether a 3.0-liter fix would work for all vehicles. If no fix is possible, the company may have to buy back the vehicles, which could add billions to the cost of its buy-backs.

VW is also in talks with its 650 dealers, who have been prevented from selling nearly 12,000 new diesel cars after regulators barred the sale of new polluting diesel vehicles last year.

VW spokeswoman Jeannine Ginivan said the company is in regular talks with dealers “as we work to make things right. We cannot comment further on ongoing discussions.”

VW is holding meetings with its dealers – including sessions this week in Nevada, Florida and Texas, dealers said. So far, only a small number of U.S. VW dealers have sued the automaker.

(Reporting by David Shepardson; Editing by Paul Simao and Andrew Hay)