UPDATE: Feds File Lawsuit Against Volkswagen For Approximately $40 Billion

(UPDATE: Updates the story throughout, including penalty figures. Volkswagen comment.)

The Justice Department on Monday filed a multi-billion dollar lawsuit against Volkswagen for illegally selling emissions-cheating cars in the U.S. from 2009 until last year and said the automaker withheld information about its 3-liter diesel engine’s “defeat device” after investigators uncovered the scandal.

The lawsuit, filed in eastern Michigan court, seeks more than $40 billion in damages from the automaker.

In announcing the lawsuit, officials from the Environmental Protection Agency signaled that regulators and officials may be at a standstill with Volkswagen regarding how it intends to fix its cars in the U.S.

“So far, recall discussions with the company have not produced an acceptable way forward. These discussions will continue in parallel with the federal court action,” Cynthia Giles, assistant administrator for enforcement and compliance assurance at EPA, said in a statement.

The lawsuit details how Volkswagen allegedly installed software to alter its cars emissions during tests beginning in 2009 and denied claims by regulators that its cars illegally polluted. In the complaint, attorneys wrote that Volkswagen deceived investigators after September 2015 — when Volkswagen admitted its 2-liter diesel cars cheated emissions tests — regarding an investigation into Volkswagen’s 3-liter diesel cars for the same “defeat device.”

From the Department of Justice lawsuit:

The United States’ efforts to learn the truth about the emission exceedances and other irregularities related to the 3.0L Subject Vehicles, including whether VW had committed the violations of federal law alleged herein, were impeded and obstructed by material omissions and misleading information provided by VW entities including at least Volkswagen AG and Audi AG.

In the lawsuit, U.S. environmental officials asked for up to $37,500 for each of Volkwagen’s 580,000 illegally polluting cars, and an additional $37,500 per car for “tampering.” The lawsuit also seeks up to $3,750 for each “defeat device” and up to $37,500 per day for Volkswagen’s violation beginning in 2009. All told, the penalties could top $40 billion.

Last month, California Air Resources Board and EPA officials said they would be postponing its review of Volkswagen’s fix for its polluting cars because of additional information provided by the automaker. EPA officials were slated to rule on Volkswagen’s fix in late December, before pushing that date back to later this month. It’s unclear from the EPA’s statement Monday if Volkswagen’s fix is still being considered by regulators.

A spokesman for Volkswagen issued the following statement after filing the lawsuit:

Today, the United States Department of Justice, on behalf of the U.S. Environmental Protection Agency (EPA) filed a civil lawsuit against Volkswagen, Audi and Porsche in the United States District Court for the Eastern District of Michigan. The claims in the Complaint pertain to the 2.0L and 3.0L TDI engine equipped vehicles that have been the subject of EPA investigations and allege violations of the same provisions of the Clean Air Act as were noted in the EPA’s September 18 and November 2 Notices of Violation.

Volkswagen will continue to work cooperatively with the EPA on developing remedies to bring the TDI vehicles into full compliance with regulations as soon as possible. In addition, we are working with Kenneth Feinberg to develop an independent, fair and swift process for resolving private consumer claims relating to these issues. We will continue to cooperate with all government agencies investigating these matters.