An attorney for victims of Volkswagen AG’s emissions scandal is asking a federal judge in Detroit to reject the government’s plea deal for the international automaker because it lacks any court-ordered restitution for victims and does not charge Volkswagen Group of America with a crime.
Birmingham attorney Craig Hilborn filed an objection last week to VW’s plea agreement, under which the automaker is expected to plead guilty to three felony criminal counts and pay $2.8 billion in criminal fines for what regulators call a 10-year conspiracy to rig hundreds of thousands of diesel cars to cheat U.S. emission standards.
The case is scheduled for Friday before U.S. District Judge Sean Cox.
In an objection filed Friday in Detroit, Hilborn wrote the government entered into a plea agreement with air bag manufacturer Takata Corp. just last week that provided for a $25 million fine, mandatory restitution of $975 million and the appointment of a special master to administer the restitution.
But in the VW case, the government claims the administration of restitution would be “impracticable” or too complex, Hilborn said.
“These positions, taken weeks apart in the same court, are irreconcilable,” wrote Hilborn in his filing.
Hilborn is asking Cox reject the plea or defer a decision on it until he can hear from victims in the case and their attorneys.
The victims believe the plea agreement is not in the public interest, the filing says, because it fails to “vindicate important public policies, such as general and specific deterrence, as well as protection of the general public” from corporations perpetrating “serious criminal acts upon an unsuspecting populace.”
Hilborn said there about 3,200 victims in the case that could be entitled to restitution who opted out of the settlement.
“These are people who did not accept Volkswagen’s offer and under the Crime Victims Rights Act, they are entitled the restitution,” he said.
The automaker has a full list of the victims in the case, Hilborn said, through its participation in the multi-district litigation in California, where more than 450 class-action lawsuits have been consolidated in a federal court.
Late Monday, prosecutors filed a response to Hilborn’s objection, saying two civil settlements in the litigation case in California provide a method for consumer restitution.
Jennifer L. Blackwell, senior trial attorney with the Environment and Natural Resources Division of the U.S. Department of Justice, said in her filing that although some victims have opted out of the civil settlements and are pursuing individual civil remedies, they cannot use the crime victims act to be advantaged over others who elected to stay in the settlement class.
“This is an extraordinary case. After months of extensive negotiations in the MDL under the oversight of former FBI Director Robert S. Mueller III, two class-action settlements were reached that provide more than full restitution to all current and former owners of the affected Volkswagen vehicles,” Blackwell wrote.
The German-based Volkswagen AG is the parent company of Volkswagen Group of America, which is the North American headquarters of the company.
Charged with conspiring to defraud the United States, violating the Clean Air Act and obstructing justice for its behavior in the emissions scandal, Volkswagen is accused of conspiring to enrich itself by deceiving U.S. regulators to get the necessary certificates to sell VW and Porsche cars in the United States knowing those vehicles did not meet U.S. emission standards.
The automaker has admitted to programming its diesel cars to trick emissions testers into believing the engines released far less pollution into the air than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.
Six current and former VW executives have been indicted in criminal cases.
Last month, a former high-ranking Volkswagen AG executive was arraigned on criminal charges in connection with the scandal.
Oliver Schmidt, 48, a German national, is charged in a superseding indictment with conspiracy to defraud the United States, violating the Clean Air Act and aiding and abetting wire fraud. Schmidt was once responsible for the company’s compliance with U.S. emissions regulations.
He is a former general manager of the Engineering and Environmental Office for VW of America. Schmidt faces up to 20 years in prison on the wire fraud charges.