Despite settlements having already been reached, additional fines from two counties in the states of Florida and Utah were permissible, the US Court of Appeals said in its decision.
Although the German car manufacturer has already been held accountable for violations of the nationwide “Clean Air Act” related to the production of diesel cars with manipulated exhaust technology, regional authorities in the US are allowed to impose further sanctions.
The decision could open the door to further large fines for the carmaker.
The judges said they were aware that their decision could lead to “unexpected (and enormous) liability” for Volkswagen.
In a statement, Volkswagen said that the court’s line was in conflict with other US jurisdictions. The company announced it would defend itself vigorously and, if necessary, take the case to the US Supreme Court.
In September 2015, Volkswagen admitted to manipulating results in diesel emissions tests on a large scale.
Dubbed Dieselgate, the practices employed by Volkswagen led to a crisis in confidence for the entire automobile industry, especially since similar workarounds were soon found at other companies.
The company has already paid for the scandal with legal costs of more than €30 billion ($33 billion) – most of which went to penalties and compensation in the US.