In Volkswagen Challenge, Paxton Wants to Do It Himself

Seeking to fight scandal-plagued Volkswagen alone, Attorney General Ken Paxton is asking two Texas counties to halt their lawsuits against the automaker — a move highlighting friction between Texas and local governments pursuing tens of millions of dollars in court. 

The Republican made the request in letters sent Friday to top attorneys in Harris and Fort Bend counties, both of which beat Paxton to the punch in filing lawsuits over the company’s admitted use of software that allowed its vehicles to sidestep emissions limits.

“The alleged violations by VW harm Texans throughout the state, and a separate Harris County lawsuit undermines the ability to achieve a comprehensive and just statewide resolution of this matter on behalf of Texas,” Paxton wrote in a letter to Vince Ryan, the Harris County attorney. “The Office of the Attorney General requests that the county stand down on its claims and cooperate with the Office of the Attorney General in pursuing the state’s interests – which includes Harris County’s interests – on matters arising from VW’s wrongful conduct.”

Paxton used similar language in a letter to Fort Bend County Attorney Roy Cordes, Jr.

Paxton wrote that both counties failed to communicate with his office before filing their suits, and he knocked them for hiring outside legal help, saying the move “appears to be an unnecessary expense.” The Texas Tribune obtained unsigned copies of both letters. 

By abandoning their lawsuits, the counties would leave millions of dollars in potential winnings on the table.   

“Harris County, Texas wants a place at the table. That’s why we’re first in line and the first government in the world to sue Volkswagen,” said Terry O’Rourke, special counsel with the Harris County attorney’s office. O'Rourke had not yet seen Paxton’s letter.

"We’ll look at whatever General Paxton’s request is and evaluate it with sincerity," he added. 

In Fort Bend, Randy Morse, the assistant county attorney, said his office could not comment because it had yet to receive the letter. 

On Thursday, Paxton announced two separate lawsuits against Volkswagen Group of America, Inc. and subsidiary Audi of America, accusing the companies of violating the state's consumer protection laws and clean air standards by marketing and selling four-cylinder diesel vehicles as "clean" while knowing that the companies designed the vehicles to meet emission standards only during testing — tricking regulators and consumers alike.

Out on the road, the cars would emit up to 40 times the allowable standard for certain pollutants. That includes nitrogen oxide, a contributor to smog-forming ozone — a public health hazard that plagues some Texas regions, most notably parts of North Texas and the Houston area that have failed to meet federal standards.

About 32,000 diesel cars capable of emissions cheating have been sold in Texas, compared to about 480,000 nationwide and 11 million globally. 

Volkswagen has stopped selling the cars and apologized and says it is cooperating with all authorities investigating its practices.

The automaker was already facing hundreds of class action lawsuits — seeking billions of dollars collectively — across the U.S. With his complaints, Paxton jumped on the bandwagon of governments taking Volkswagen to court.

Harris County, with its roughly $100 million environmental lawsuit, went first in late September, and Fort Bend filed its own environmental suit on Wednesday.

Last week, the city of Dallas announced it planned to sue Volkswagen, but it reversed course on Monday, saying Paxton’s statewide suit would do the trick.

“We look forward to the state taking action in the upcoming months to require Volkswagen and Audi to bring the affected vehicles into compliance with state environmental laws and improve air quality in the Dallas-Fort Worth area, and we urge the state to do so in an expeditious manner and at no cost to affected motorists,” the city said in a statement.

In his letters, Paxton wrote that Harris and Fort Bend counties ignored “important consumer relief and meaningful injunctive relief against VW” by filing lawsuits focused solely on environmental questions. He also seemed to suggest the counties forced his hand on the Volkswagen challenge.

Paxton joined a multistate investigation of the diesel deception in September. But the counties, he wrote, forced him to abandon that effort because he had to sign onto their lawsuits. That's because under state law, when local governments file such suits, the state is required to join as a "necessary and indispensable party."

In these types of cases, the counties and state split any winnings. Harris and Fort Bend counties, however, would get no slice of the pie under the statewide suit Paxton filed this month.

In Harris County, O’Rourke wouldn't immediately comment on whether his office would follow Paxton’s ​wishes, but he said filing first made sense since the Houston area, home to the nation’s largest petrochemical complex, perpetually fails to meet federal ozone standards that the U.S. Environmental Protection Agency tightened this month. What’s more, he said, Harris County frequently sues environmental polluters before the state takes action. 

“In the history of pollution litigation in Texas, Harris County has always led,” he said. 

The Volkswagen squabble extends a broader battle between the state and Harris County over environmental enforcement that surfaced during the 2015 legislative session.

In June, Gov. Greg Abbott signed a bill into law that set a five-year statute of limitations and capped payouts at about $2 million when counties sue companies that have fouled local water or air. 

The bill — pushed by Rep. Charlie Geren, R-Fort Worth, and Sen. Kelly Hancock, R-North Richland Hills, as an economic booster  — largely targeted Harris County’s team of environmental litigators, which lawmakers called overzealous.

Though the bill took effect Sept. 1, it will not affect the county Volkswagen lawsuits, O’Rourke said. Mindful of the new law, lawyers in both counties say they are not seeking penalties for violations that happened after Aug. 31.