Daimler reaches deal to settle US diesel emissions claims

Associated Press

Berlin – Daimler AG, the maker of Mercedes-Benz cars, says it has reached agreements in principle to settle U.S. claims over emissions from its diesel vehicles for over $2.2 billion.

The Stuttgart, Germany-based automaker said late Thursday that the agreements with various U.S. authorities concern civil and environmental claims involving about 250,000 diesel cars and vans.

The company said the civil cases related to a a consumer class action lawsuit pending before the U.S. District Court for the District of New Jersey.

Daimler AG said in a statement that the settlement with governments will result in costs of about $1.5 billion, while the civil settlement will bring a one-off charge of about $700 million. It estimated that “further expenses of a mid three-digit-million” euros would be required to fulfill requirements of the settlements.

The deal with the U.S. governments apparently will settle probes by the Justice Department, Environmental Protection Agency, Customs and Border Protection and the California attorney general and Air Resources Board.

The government agreement will be detailed in consent decrees, which will be filed with a U.S. District Court in the coming weeks, Daimler’s statement said.

The EPA deferred comment to the Justice Department, where a message was left Thursday. The California Air Resources Board said it can’t give more details until the consent decrees are filed in mid-September.

“With the proposed settlements, the company takes an important step toward legal certainty with respect to various diesel proceedings in the United States,” Daimler’s statement said.

Daimler said its board of management and the supervisory boards of Daimler AG and Mercedes-Benz AG approved the proposed settlements, but noted that they are subject to final approval by the authorities and courts.

Last month, Daimler disclosed that it had set aside money to pay for its diesel emissions troubles. The company’s pollution practices are under investigation in the U.S. and Germany, and civil lawsuits claim the vehicles emitted more pollutants than advertised.

The company was asked by the U.S. Justice Department in April of 2016 to conduct an internal probe into its exhaust emissions certification process. The request came shortly after the U.S. government discovered that Volkswagen had been cheating on diesel emissions tests for years. The company programmed its vehicles to turn on pollution controls during lab tests but turn them off while on real roads.

Steve Berman, a Seattle attorney who sued Daimler over Mercedes diesel pollution, said in 2016 his firm hired a company to test Mercedes diesels on real roads, finding that they spewed out too much nitrogen oxide almost all the time. Berman accused Mercedes of having software called a “defeat device” that was similar to VWs.

Volkswagen had to pay $2.8 billion to settle a criminal case in the U.S. due to the cheating.