The State of Texas has launched a lawsuit against the Volkswagen Group of America and Audi of America over the marketing of their diesel vehicles.
The case, filed in Travis County in the southern US state, claims the companies violated state Deceptive Trade practices.
The news comes after Volkswagen's US chief said he was aware of an emissions problem on diesel VWs in 2014 but did not know until last month about the "defeat device" that makes the cars appear less polluting.
Michael Horn, president and chief executive of Volkswagen Group of America, told a US Congress panel that he only understood the existence of the cheating software on the cars "a couple days" before 3 September, when the company admitted it existed.
Mr Horn said that although he found out that the emissions of VW diesel cars did not meet US regulations in early 2014, "I was not then told nor did I have any reason to suspect or to believe that our vehicles included such a device."
"At that point of time, I had no understanding what a defeat device was. And I had no indication whatsoever that a defeat device could have been in our cars."
Instead, he said, he only learned of the software, which masks actual emissions in regulator inspections, "around the September 3rd meeting. A couple of days before."
Mr Horn is the first executive of the German carmaker to appear before Congress to explain the scandal, which threatens Volkswagen with billions of dollars in fines in the United States and possibly criminal charges.
The company was blasted by politicians as the hearing of the House Energy Committee's subcommittee on oversight and investigations opened.
"Trust helped build Volkswagen because we believed the company put customers first," said committee chair Tim Murphy.
He said the company needs to answer: "What happened, who was involved, why were these actions taken?... Was it done to deliberately deceive government regulators?"
"VW has betrayed a nation... It's time to clean it up or get off the road," said Representative Fred Upton.
Earlier, Mr Horn apologised to Congress and said Volkswagen takes "full responsibility" for an emissions cheating scandal.
He said it was "deeply troubling" that the company installed a "defeat device" on several diesel models for years to hide from regulators the cars' actual gas emissions when in use.
"On behalf of our company, and my colleagues in Germany, I would like to offer a sincere apology for Volkswagen's use of a software programme that served to defeat the regular emissions testing regime," he said.
His comments were included in the testimony prepared for the Capitol Hill hearing today.
"These events are deeply troubling. We have broken the trust of our customers, dealerships, and employees, as well as the public and regulators," Mr Horn said.
The House Committee on Energy and Commerce Subcommittee on Oversight and Investigations hearing will also include testimony from the Environmental Protection Agency, which sets the emissions standards for cars in the US.
Mr Horn also announced that VW had withdrawn its application for EPA certification of its new 2016 four-cylinder diesel cars because they also included a software device governing emissions that needed to be disclosed and assessed.
He added that Volkswagen was working with regulators "to continue the certification process."
"We are determined to make things right," he stated.
Meanwhile, German prosecutors have raided Volkswagen's headquarters and other offices today as part of their investigation into the car maker's rigging of diesel emissions tests.
German prosecutors said they were targeting documents and data storage devices that might help with their inquiries.
Volkswagen said it was supporting the investigation and had handed over a "comprehensive" range of documents.