Judge OKs $14.7B VW emissions settlement

Keith Laing
Detroit News Washington Bureau

Washington — A federal judge has given preliminary approval to a settlement that calls for Volkswagen to pay $14.7 billion to settle consumer lawsuits and government allegations that it rigged hundreds of thousands of cars to cheat U.S. emission standards.

Volkswagen said Tuesday that U.S. District Court Judge Charles Breyer has signed off on the deal, which calls for the German automaker to pay more than $10 billion to either buy back or repair about 475,000 2-liter diesel vehicles that were sold between 2009 and 2015 and were built with devices to trick emissions testers.

Under the agreement, Volkswagen will also compensate owners who purchased 2-liter diesels before September 2015 with payments of $5,100 to $10,000, depending on the age of their cars.

Breyer is expected to grant final approval to the settlement on Oct. 18, according to Volkswagen.

The beleaguered German automaker said its leaders and the federal regulators who had been investigating the emission cheating believe “the proposed settlement program will provide a fair, reasonable and adequate resolution for affected Volkswagen and Audi customers,” now that it has received Breyer’s initial approval.

“Under the proposed settlement, eligible customers will have two choices: (1) they can sell back their vehicle to Volkswagen or terminate their lease without an early termination penalty, or, (2) keep their vehicle and receive a free emissions modification, if approved by the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB),” the company said in a news release. “Customers who select any of these options under the settlement will also receive a cash payment from Volkswagen.”

Volkswagen said the settlement that was ratified on Tuesday includes the following diesel cars: 2013-15 Beetle; 2010-2015 Golf; 2009-15 Jetta; 2012-15 Passat; and 2010-13 and 2015 Audi A3.

The EPA accused the German automaker in September 2015 of selling diesels for years with software that activated required air pollution equipment only during emissions tests. They had been marketed as “clean diesels” for the company’s Volkswagen, Audi and Porsche brands between 2008 and 2015.

Volkswagen has admitted to programming its diesel cars to trick emissions testers into believing the engines released far less pollution than they actually do, in violation of the federal Clean Air Act. Regulators have said that in normal driving they emitted up to 40 times more smog-causing nitrogen oxide than the legal limit.

The settlement, which was reached between Volkswagen and the Environmental Protection Agency, Department of Justice and Federal Trade Commission, calls for Volkswagen to pay $2.7 billion into a federal environmental mitigation trust fund and spend another $2 billion for research on zero-emissions vehicles under the settlement.

Volkswagen said the agreement is “not an admission of liability.

“By their terms, they are not intended to apply to or affect Volkswagen’s obligations under the laws or regulations of any jurisdiction outside the United States,” the company said.

Elizabeth Cabraser, lead counsel for the consumer plaintiffs in the Volkswagen “Clean Diesel” lawsuit that led to the company’s large settlement, said Breyer’s approval “brings us a step closer toward achieving the settlements’ goals: fairly compensating consumers, undoing the cars’ environmental damage through remediation, and fixing or getting these polluting cars off the road.

“We have received overwhelmingly positive feedback from affected owners and lessees in response to this historic agreement, and believe this support will only grow as consumers learn more about the benefits of the settlement,” she said in a statement. “We look forward to finalizing this agreement so consumers can soon take advantage of its benefits.”


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Twitter: @Keith_Laing