WASHINGTON—Volkswagen AG and a German auto supplier on Tuesday asked the U.S. Supreme Court to reverse a lower-court ruling that said two counties could seek financial penalties over excess diesel emissions that could total billions of dollars. The German automaker’s U.S. unit and Robert Bosch LLC asked the U.S. high court to reverse a unanimous ruling by the U.S. Court of Appeals for the Ninth Circuit that said Utah’s Salt Lake County and Florida’s Hillsborough County could seek “staggering” damages over updates made to polluting diesel vehicles after they were sold. Volkswagen Group of America told the high court the appeals court “decision threatens to throw one of America’s largest industries into regulatory chaos, to the detriment of manufacturers, dealers, consumers, and the environment.” On Tuesday, the Ohio Supreme Court heard oral arguments in the state’s lawsuit against Volkswagen over emissions damages from 14,000 Ohio-registered cars. VW said in court …