June 1, 2017 / 4:10 PM / 2 months ago

U.S. judge lets investor diesel lawsuit against Daimler proceed

FILE PHOTO: The Mercedes star logo of an E Coupe is pictured before the annual news conference of Daimler AG in Stuttgart, Germany, February 2, 2017.Michaela Rehle/File Photo

WASHINGTON (Reuters) - A federal judge in California will allow a U.S. investor class action lawsuit against Daimler AG (DAIGn.DE) and several senior executives to proceed over allegations the company did not disclose excess emissions.

The German automaker faces ongoing investigations by U.S. and German authorities into excess diesel emissions. Last month, German prosecutors searched Daimler's offices as part of an investigation into diesel pollution.

U.S. District Judge S. James Otero in a ruling filed late Wednesday rejected requests by Daimler to dismiss the lawsuit, filed in 2016 by municipal pension funds and other investors. He said he would allow the suit to proceed against Daimler and senior executives Dieter Zetsche, Bodo Uebber and Thomas Weber.

"We consider these class action suits to lack merit. We will defend ourselves by all legal means," Daimler spokesman Han Tjan said on Thursday.

In April, Daimler said investigations by authorities of diesel emissions and auxiliary emission control devices could lead to significant penalties and recalls.

Last month, Daimler said it had dropped plans to seek U.S. approval to sell 2017 Mercedes-Benz U.S. diesel models but had not decided whether to exit the American passenger diesel market.

There has been growing scrutiny of diesel vehicles in the United States since Volkswagen AG (VOWG_p.DE) admitted in September 2015 to installing secret software on 580,000 U.S. vehicles that allowed them to emit up to 40 times legally allowable emissions while meeting standards when tested by regulators.

VW was sentenced in April after pleading guilty in the emissions scandal. In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers, and offered to buy back about 500,000 polluting U.S. vehicles.

In January, another U.S. judge ruled Volkswagen and former Chief Executive Martin Winterkorn must defend a similar investor lawsuit in California over the company's diesel emissions cheating scandal.

Mercedes-Benz USA said in May diesel vehicles in the United States in 2016 accounted for less than 1 percent of U.S. sales.

Daimler won approval in late April to sell U.S. diesel Sprinter commercial vans after months of talks with regulators.

Last month, the U.S. government filed a civil lawsuit accusing Fiat Chrysler Automobiles NV (FCHA.MI) of illegally using software to bypass emission controls in 104,000 diesel vehicles sold since 2014.

Reporting by David Shepardson; Editing by Steve Orlofsky

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