Stanford Professors Sue Volkswagen, Allege Emissions "Defeat Device" May Have Come From Silicon Valley

September 25, 2015
NBC Bay Area

Two Stanford professors filed a lawsuit in federal court Friday, alleging that the automaker intentionally manipulated its vehicles’ emissions systems by installing so-called “defeat devices” designed to evade mandatory emissions testing. The suit also raises suspicions about a Volkswagen lab in the Bay Area and its possible connection to a scandal that has left some skeptical about the company's ability to regain public trust.

The lawsuit comes just days after the German automaker was accused of cheating on U.S. vehicle emissions tests. The crisis has threatened the automaker’s leadership and resulted in the resignation of its CEO Martin Winterkorn. On Friday, Volkswagen appointed Mattheas Muller, head of its Porsche brand, as the new CEO of the automobile company.

Although Volkswagon did not immediately respond to news of the lawsuit, which was first reported by NBC Bay Area, Winterkorn apologized — twice — after news of emissions discrepancies broke. The company has agreed to set aside $7.3 billion to cover the fallout.

Matthew Smith and Bernadette Meyler, the Stanford professors who sued Volkswagen, purchased 2013 VW Passat TDIs specifically because they were advertised as being a "clean," environmentally-friendly vehicle that provided excellent mileage. Both say they would not have purchased the model had it not been for Volkswagen's representations regarding their clean emissions characteristics.

"They were angry..they feel betrayed..because they spent a lot of time trying to figure out what car to get," said Nancy Fineman, an attorney for the Burlingame firm of Cotchett, Pitre and McCarthy that filed the lawsuit.

The group behind the lawsuit is investigating whether the "defeat devices" were developed at Volkswagen's Electronic Research Laboratory in Belmont, California.The 157,000 square feet lab represents the entire Volkswagen Group in applied research and development.

"We right now have a very strong suspicion that data that holds the keys as to how far back Volkswagen knew that these vehicles weren't meeting EPA standards may lie right in the heart of Belmont," attorney Frank Pitre said. Pitre emphasized they don't have any evidence the lab helped develop the devices Volkswagen admits installing.

The ERL lab issued a statment saying it is not involved in "the development or creation of parts or systems related to vehicle emissions."

Winterkorn personally visited the lab's then Palo Alto location in January 2010, touting his company’s expansion efforts. "We want to take Volkswagen to the top of the industry by 2018," Winterkorn told reporters.“We aim to be the most eco-friendly automaker in the world ... "For Volkswagen, ‘green mobility’ means setting new ecological standards in automobile manufacturing in order to put the cleanest, most economical and at the same time most fascinating cars on the road."

NBC Bay Area toured the company's Belmont facility in early 2012, and talked to students from Stanford University who were interning there. Volkswagen and ERL has also partnered with Stanford and sponsored its solar car and autonomous driving projects.

The 59-page suit alleges violation of warranty, violation of the California Consumers Legal Remedies Act, common law fraud and warranty breaches.

Volkswagen is also facing lawsuits in San Diego and Los Angeles over emissions testing tampering. One of them is seeking class-action status for all residents of California who bought or leased diesel Volkswagens or diesel Audi A3s between 2009 and 2015. Dozens of lawsuits have been filed since regulators revealed the automaker used software to cheat emissions standards.

“VW’s scheme to deceive the public is a by-product of a corporate culture of arrogance — thinking they’re too smart to get caught lying about their ability to produce fuel efficient, clean vehicles without sacrificing performance,” said Frank Pitre, an attorney for Smith and Meyler..

The increased emissions increase pollution into the environment and cause health risks, the lawsuit alleges.

The lawsuit describes how Volkswagen engaged in a marketing campaign to promote their cars to “appeal to worries about climate change,” touting the fuel economy, power and “green” credentials of its diesel vehicles. "This ain't your daddy's diesel," Volkswagen boldly declared in an ad campaign on its website. Sales increased as a result of its environmental friendliness, because car buyers who bought their cars believed they were helping the environment while still enjoying great gas mileage, the lawsuit says.

But Volkswagen’s claims were false, the lawsuit says. An investigation by the California Air Resources Board prompted the automaker to admit that it has, since model year 2009, manipulated software to avoid emissions standards... (To read the entire article, please click HERE)