The Alliance for Automotive Innovation filed an amicus brief Monday in support of Volkswagen's petition to a U.S. court to reconsider a ruling that would allow state and local governments to regulate modifications to emission-control systems once a vehicle is sold.
The action comes after VW asked the 9th U.S. Circuit Court of Appeals in July to reconsider its ruling, which determined the Clean Air Act does not preempt state and local authorities from enforcing anti-tampering laws against manufacturers' post-sale updates to emission-control systems.
In the filing, the Alliance echoed the German automaker's position that permitting state and local governments "to apply their own prohibition on tampering to post-sale, model-wide changes" to vehicles would scrap regulatory certainty and create chaos.
The Washington auto lobbying group represents most major automakers, including Volkswagen, in the U.S.
The Alliance said manufacturers routinely update the software design and calibration of their engines and emission-control systems, providing benefits for consumers and the environment by resolving problems and thereby improving a vehicle's overall performance, reliability, driveability, safety and emissions control. The group argues that it would be complicated for different regulators to determine and agree whether a post-sale modification is unlawful tampering or an improvement to design and function.
The Clean Air Act "avoids this uncertainty by giving a single agency, EPA, the responsibility to collect testing data from manufacturers on post-sale emissions and to supervise post-sale, model-wide changes to emission systems," the alliance said in the brief.
The 3-0 ruling in June would allow Florida's Hillsborough and Utah's Salt Lake counties to seek potentially billions in penalties from VW for violation of their laws prohibiting tampering with emission-control systems. The court ruled VW must face anti-tampering claims by the two counties over fixes made to its diesel vehicles after they were sold.
"We are mindful that our conclusion may result in staggering liability for Volkswagen," the judges said in the ruling. "But this result is due to conduct that could not have been anticipated by Congress: Volkswagen's intentional tampering with post-sale vehicles to increase air pollution."
The panel argued Volkswagen "installed defeat devices in new cars for the purpose of evading compliance with federally mandated emission standards and, subsequently, updated the software in those cars so the defeat devices would do a better job of avoiding and preventing compliance."
The ruling, if upheld, would allow all 50 states and thousands of local governments to regulate emissions software updates and other modifications after a vehicle is sold and could undermine the EPA's ability to exclusively regulate automakers' emissions compliance.
VW said the decision could force automakers "either to avoid maintaining or improving the emission control systems of in-use vehicles ... or pass on the substantial increased compliance costs to consumers," according to a court document filed July 30.
"The panel's decision contravenes the [Clean Air Act's] text, structure and history and will lead to the very regulatory chaos Congress sought to avoid in enacting that law," the automaker argued.
Volkswagen admitted in 2015 to cheating U.S. emissions tests on diesel engines by installing illegal software. The automaker settled U.S. criminal and civil actions for more than $20 billion, but it did not obtain liability protections from state and local governments, the court said.
The diesel emissions scandal has cost the German automaker about €31 billion ($35 billion) in fines, penalties and vehicle buyback costs worldwide since 2015.
