Tuesday, September 22, 2015
headshot of markus dubber

Volkswagen diesel auto sales are shutting down around the world, like dominos, as the scandal of their falsified U.S. emissions data grows. About 11M cars globally are affected. VW Canada has halted sales, and regulators in country after country are scrutinizing the German automaker’s vehicles. We asked Prof. Markus Dubber, a criminal law professor, to weigh in on the growing VW scandal:


What are the possible outcomes and will anyone go to jail for this?

That depends on whether and, if so, how various jurisdictions decide to address this issue. In the US, VW may face regulatory and criminal sanctions, not to mention civil liability resulting from law suits brought by consumers, including class actions. Sanctions may be brought under state (and in particular California) law or federal law, or both. Remember that this is not framed as a traffic safety issue, but as an environmental issue, pursued by the Environmental Protection Agency, not the Highway Safety Administration. Beyond administrative fines, which under the Clean Air Act can run into the billions, the corporation and its officers may also face criminal penalties. Depending on the nature of the charge, these penalties may include imprisonment.

But will any of this really happen?

It’s too early to tell how this will play out. Regulators are investigating beyond the U.S. now that VW has reported that 11 million cars, far beyond the initial class of 500000 vehicles in the U.S. have the engine that contains the device designed to mask emissions during testing.  The potential for severe financial, and even personal carceral, sanctions is considerable and can’t be dismissed out of hand, given the alleged scope, seriousness, and wrongfulness of the conduct. This, after all, is presented as a case of a wilfull and systematic manipulation of the production process of a large number of vehicles, rather than as a case of oversight resulting from the failure to exercise proper supervision. While the harm to individuals, notably drivers, in the VW case pales in comparison to that suffered by those in vehicle safety cases, such as the Toyota self-acceleration case or the recently settled GM ignition switch case, it can be argued that the class of potential victims is far larger: the “breathing public,” as one environmental activist put it. It doesn’t help VW, or its executives, that the cover up may be worse than the initial offense, insofar as VW officials are alleged to have denied that the discrepancies between test results were attributable to their vehicles, rather than testing error. The initial fraud would thus have been compounded by false statements to regulatory officials, giving rise to further criminal liability.

What about international repercussion, beyond the US market?

This case raises interesting questions about the interplay between administrative and criminal law, between state (or provincial) and federal  law, and between domestic and international, even global, law, as well as about questions of criminal liability in a corporate context. Focusing on the latter issue, US--and Canadian—criminal law, along with common law jurisdictions in general, recognize corporate criminal liability. German law emphatically does not, on the ground that criminal liability is, must be, and can only be, personal. From a common law perspective, the interesting question is whether the US Department of Justice will use this opportunity to make good on its recently announced commitment to ferret out and prosecute not only corporate criminal liability, but also personal criminal liability of executives. By contrast, from the German perspective, this case is unusual—and troubling—because it raises the possibility of the criminal prosecution of a corporation, never mind of corporate executives.

What can VW and its executives do at this point?

After apparently having denied any wrongdoing for months, VW has turned to admitting fault and apologizing, even dramatically expanding the scope of the scandal beyond the relatively small US market to the global market. This is smart insofar as it may help minimize the damage to its bottom line. Insofar as criminal liability, for the corporation or individuals, or both, is on the table, of course, the corporation and individual officials may also want to exercise caution so as not to admit criminal liability along the way.